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Incumbent, large and complex firms sometimes struggle to maintain their drive to win! They are at risk in falling into the trap that they rather "play the game not to lose versus to win"! Recently, this came to light for me when I had an opportunity to speak to a senior group of industry executives – including executives from small and start-up organizations as well as leaders from large, successful incumbents. It was striking to me how different these two groups felt about the future. For the entrepreneurs the future was all about possibilities, opportunities, change and how to find ways to win. The others however had a very different view of the world. They were concerned about changes, expense burdens, regulations, competitive threats and overall just worried about challenges and about how not to lose. It was clear to me that the one group was hungry – had a real drive to win – and the other afraid and defensive.
Obviously, entrepreneurs are "hungry" to succeed and established firms want to protect their success. However, given the pace of change and the dramatic developments in technology, incumbent firms, I believe, have to increasingly focus on fostering a culture of "being hungry". In thinking about what established firms may want to do to encourage this cultural shift, I thought about a couple of better practices I have observed over the years:
• Encourage self-created change. Hungry companies have an unwavering focus on creating change. In fact, they are comfortable in change. Their focus on internal, self-created change allows them to better adapt to external, non-self-created changes. This starts at the individual level, by pushing team members to constantly challenge their thinking, continuously learn and expose them to new responsibilities and roles.
• Reward imagination. Successful change agents also understand how to reward their best people. Reward systems emphasize behaviors such as out of the box thinking, imagining the unexpected or new idea generation. These companies are also not afraid to challenge existing reward structures by creating equity and partnership models around specific ideas or business opportunities.
• Push scenario thinking. Companies with a hungry culture embrace scenario-based planning. These companies continuously assess the effectiveness of their strategies through a scenario lens. This lens constantly gets updated with likely and unlikely positive as well as negative events (or scenarios) to determine the impact on a key strategy. Scenario planning can foster creativity and imagination across the organization.
• Get comfortable with controlled failures. While there is a lot of literature around celebrating failures, hungry companies have perfected this by establishing a process which allows for controlled failures. They are able to make different bets without betting the viability of the institution – they are able to fail within their risk appetite so to speak.
• Eliminate complacency. Lastly, hungry companies take nothing for granted. They ruthlessly focus on weeding out complacency. They do this both on a structural and personal level. Nobody rests on their laurels. There is an institutional mindset that even if everything is going really well now that this does not mean that suddenly something can go horribly wrong.
Of course, these points are easily said but difficult to execute. Competing priorities, legacy systems and structures or entrenched cultural aspects make it even harder to pivot to a "hungry and drive to win" mindset. However, I think this will be imperative for established firms competing in a "continuously disrupting environment". Another Austrian, Arnold Schwarzenegger, which I like to quote: "For me life is continuously being hungry. The meaning of life is not simply to exist to survive, but to move ahead, to go up, to achieve, to conquer!"