The creative destruction of the Fortune 1000
In 2011 Forbes predicted that over 70% of Fortune 1000 companies will lose their rank within a decade because they fail to be entrepreneurial. Despite these companies trying really hard to keep up with the changing environment, the average age of the top ranked companies is decreasing at a tremendous speed.
The interchange among the corporate heavy league owes to a mechanism called creative destruction – an organic and dynamic process where new ways of working replace the outdated ones through product and process innovation. It is like natural selection for businesses where only the fittest survive, healing the ecosystem and bringing economic growth.
What can we learn from Fortune 1000 failing?
In a recent survey only 20 percent of chief strategy officers in big companies believed they are well prepared for industry disruption. In another survey, 57 percent of executives said that large companies make things harder on themselves by being resistant to change.
We believe the secret to surviving the Armageddon brought by startups is to adopt three key elements of the mindset differentiating them from corporates.
- What bends cannot break
Embrace flexibility to unlock the value that is hidden within your corporate culture or crushed between the monoliths of business processes. Culture change that encourages trial and error, and learning from it, mobilises talent that is already there. Managers should act as enablers, not inspectors, to help teams reach their goals. For added oomph, consider going agile.
- Ecosystem over industry
The best of the best build platforms not products and use the networks around them to find best matches for their business. Corporations can benefit from adding a platform approach to their core service or product. For example, BMW is creating an ‘urban mobility’ ecosystem by partnering with car rentals, charging stations, parking aids, mobile lifestyle apps and more. Take advantage of the innovation happening across domains and while you’re at it, use your company’s expertise in the field to make yourself a critical part of the solution customers need.
- Collaborate like there’s no tomorrow
Because if you don’t, there might not be one. You do not need to face the disruption alone – tap the collective minds of the brightest teams out there to create synergies and benefit from access to other industries, platforms and knowledge. Find allies among customers and providers, create partnerships above and beyond your imagination, and you will be well prepared for whatever is coming up next.
With a new breed of highly flexible and extremely fast moving businesses popping up across the globe, the need to learn from and take on their techniques and processes is starting to define the strategies of big corporations. We believe that startups will continue to spark innovation big players can learn from, and we love to build the connections that help facilitate this process.
Will adopting new tools create super-corporations with almost unlimited resources that wipe contenders off the scene or will startups find new, ingenious solutions to fight back? Time will tell, but until then we’re excited to see what is the next big thing that will stir up the status quo of the Fortune 1000.