In Part 1 of this series, we looked at some of the differences in how large, global firms and venture-funded companies operate and why. We identified that larger firms are more often “sure-footed” in their approach because of the resources and organizational energy required for initiatives. In contrast, smaller firms bent on “changing the world” are motivated and driven to “build the ship while sailing it.” They are in a race to create high value with the smallest amount of time and money required. The “try and adapt” methodology is deeply rooted in their DNA.
In Part 1, we also introduced the idea that there is no “best way” to operate in all instances. Sometimes larger companies need to act like small companies, and vice-versa.
Ken Blanchard and Paul Hersey first demonstrated that the most successful leaders flex their leadership style. In Management of Organizational Behavior, they described how these leaders adapt their approach based on the demands of the task to be accomplished and the individual or group that is being led. This idea spawned one of the most widely taught management courses in history – Situational Leadership.
Environmental shifts demand action
Leaders in multi-nationals must be prepared to firmly grab the rudder when unanticipated sea changes occur. Whether it’s a competitive offering, a shift in government regulations, or a pandemic, sometimes the world shows up at your doorstep and demands action.
And in those instances, leadership doesn’t have the luxury of time to create a committee to develop recommendations. Leaders must rely on judgment and values to act with conviction with much less certainty than that to which they are accustomed.
The impact of regulation
Medical products start-ups are no strangers to the idea that they need to be flexible in how they approach tasks. When developing an engineering prototype for evaluation and feedback, early-stage companies will operate in classic start-up mode. This involves many late nights, (frequently) lots of pizza, and shoestring budgets to get something put together quickly.
Unlike most tech companies, however, medical products firms are regulated by the FDA and other global agencies. As such, they are required to meet highly specific criteria in some areas such as the development, application, and documentation of a quality system. Meeting these regulations demands that even start-ups sometimes operate with a “do it right the first time” mindset. So these firms are already aware that some challenges require that they shift to a “dot the I’s and cross the t’s” mode.
“Tall, grande or venti”
I have been fortunate to work on disruptive medical products in large and small companies. Since they are fundamentally serving the same customers, it’s no surprise that these companies generally need to accomplish the same things to be successful. Value must be delivered in each case. The difference is in how they accomplish these things.
One of the phrases that I became fond of using in start-ups is “There are three ways to accomplish this task. The $1,000, $10,000 and $100,000 versions. We’re interested in the $1,000 version.”
The main differences among these approaches are cost (obviously), time and certainty. One level of expertise is learning how to accomplish the same thing in different ways. But the difference-making, mastery level is reached when leaders recognize when the situation calls for the fast approach or the more certain approach. And this requires mindfulness, judgment and the confidence to go against the grain of “how we do things around here.”
What’s important now?
Over this two-part series, we’ve come full circle. We started out by discussing how multi-nationals and start-ups tend to operate differently. But then we looked at the drivers of that behavior. And we recognized that it’s not about mindlessly following rules, norms or platitudes. Rather, it’s about mindfully recognizing what the situation calls for, having the wherewithal to know how to operate differently, and having the courage to act in the interests of the customer and the business.
In my next post, we’ll apply this lens to the situation facing start-ups as they plan for commercial success. Well look at how and why following the familiar and/or accepted path can get them in trouble. And we’ll discuss how to operate in a way that gives them a better chance to reach their goals.