It should come as no surprise that the cultural environment that characterized a nascent United States of America is a healthy corporate culture for surviving transformative market change.  Individualism, diversity, lack of historical status, risk taking and perception of freedom from bounds were all vital parts of what made a young America so successful and of how corporations can survive market transformations. 

 

Time and success tend to mute individualism, drive out diversity, create status and entitlement, reduce risk taking and limit perceptions of what is possible.  These changes are as true in a nation as they are in a corporation.   The very factors that grow with success become, over time, the limitations to success in a changing world. 

 

Those changing worlds create new opportunities and those new opportunities are often much more easily seized by young entrepreneurial companies than by larger, more accomplished incumbents.  Why?  Because those entrepreneurial startups are, by definition, more individualistic and risky.  Starting from zero means the upside seems limitless.  Between them, a group of startups provides for diversity, and the harsh realities of startup life tend to weed out status and entitlement.   Add in a strong founding (and often rule breaking) CEO, a culture that begs for forgiveness rather than asks for permission, a clear vision of the mission ahead and the stark realities of life without a safety net create ingredients for rapid growth in nascent markets.

 

Far too often, larger incumbents focus on the technological aspects, the unproven market, and the challenges to scaling and assume that thoughtfully and methodically addressing those will lead to success.  They tend to ignore the cultural issues and struggle with the leadership dictates of a single-minded focus on entrepreneurial success.

 

The last several decades have seen the emergence of some large and dominant players who have intentionally sought to retain their immigrant culture.  Companies like Cisco and Google, and to a lesser extent Microsoft, IBM and Apple have institutionalized diversity, lack of status, risk-taking and a mindset of immigrant and emigrant (back out to the start-up world) status.  They have made it clear that internal efforts must always compete with the external startup world and that the internal can and will be replaced by the external.   They have created spaces for risk taking, embraced newcomers (immigrants) and especially what we call “round-trippers” (former employees who left to create new startups and then sold them back to the parent, thereby temporarily “coming home”).

 

These are not necessarily “easy” cultures, as they tend toward market paranoia, toward “what have you done for me lately,” toward high levels of internal competition and the type of work ethic that typifies a startup more than a large corporation.   But they compensate by celebrating individualism, allowing for greater flexibility of work styles, maintaining the possibility of rapid advancement and acknowledging that some will want to pursue richer pastures outside the corporation.

 

Understanding these cultural aspects, and being willing to adopt some or all of them, is often the single most difficult challenge faced by a market incumbent – and being under the stresses of market change and a risk to dominance makes adopting such change all the more challenging.  Often the best path is to create an entirely new division or corporation within the umbrella of the parent, but enabled to adopt the culture necessitated by rapid change and growth.