"Live fast and die young" isn't a motto that most companies would adopt. Yet it's increasingly one they abide. The average tenure of an S&P 500 company is shrinking fast, for example, from 33 years in 1964 to 24 by 2016, to 12 forecasted for 2027.
There are many reasons, but to summarize: companies increasingly can't adapt to an accelerating pace of change. That includes technological change and—importantly—the disruptive competitors that exploit it.
As one of those disruptors, we're a long way from a (hopefully one day) S&P 500 listing. But it's never too early to worry about slowness-induced mortality. For this reason, we're hypersensitive to signs of creeping organizational sclerosis as we grow.
One of these signs is a decrease in solving problems with an early startup's speed, creativity, and resourcefulness. This post will describe symptoms of the disease, identify key contributors, and outline some potential solutions.
Innovation can suffer from success
In the early days of a startup, you have little to lose. Your attitude is, "let's figure it out." You think differently and have a fresh approach to the market. You're open to trying everything and seeing what sticks.
As you gain traction and grow, things start to change. You find product-market fit and expand your user base, creating new risks from experiments as they can now negatively affect more customers. You amass capital, allowing you to throw more resources at challenges and opportunities, but reducing the pressure to be scrappy. You add more people, and with them come more processes, review stages, and approval requirements. You have more precedents, resulting in more habitual behavior and less novel thinking. You have more to lose, so become more conservative.
All of this can undermine problem-solving. How do you know if it's happening? Some symptoms include:
- Teams grow too large for the problems they're solving. Projects involve two or three times the people yet move more slowly and often produce solutions that seem less creative and impactful than those from smaller teams.
- It takes an excessive number of meetings, reviews, and approvals to move projects forward and get things into the market. There's too much feedback, often conflicting, leading to paralysis.
- People start looking down on hacking solutions for the short-term, even when warranted. Instead, they increasingly seek to create long-term solutions. They do so even when the future for those solutions is uncertain, things will likely change, and a short-term hack is the better approach.
- There's a growing desire and effort to mimic big-company tools and processes even when they're not a good fit, don't solve pressing organizational problems, and don't reflect the culture.
- People increasingly suggest extending timelines or deferring deliverables when encountering unexpected barriers rather than looking for creative solutions to overcome them and achieve desired results within the original timelines.
How to maintain ingenuity with growth
At BenchSci, speed and advancement are two of our core values. So we're hypersensitive to symptoms of diminished problem-solving speed and creativity. Based on research and our team's collective experience, here's how to avoid it:
1. Hire resourceful talent
In the early days of a startup, most if not all team members are resourceful. Those who aren't typically won't join or get quickly weeded out. However, as you scale, you need to expand beyond this pool, including by adding people with experience in larger companies. It's critical when doing so not to sacrifice resourcefulness. For example, during the interview process, ask candidates to describe times when they've solved problems creatively. Also, ask questions to probe their ability to overcome unexpected obstacles.
2. Encourage boldness and experimentation
For people to solve problems creatively, they need to feel safe. That includes feeling safe to propose solutions that others might consider outlandish, and feeling safe to fail. Describing all the ways to create psychological safety is beyond this post's scope (here's an article if you're interested). But there are some basic things you can do. For example: "Reward boldness," says my colleague Mark Kostove, Enterprise Sales Executive at BenchSci and a veteran of many startups. "Create systems and a culture that rewards people who try and fail versus resist and freeze. Celebrate failures and share learnings."
3. Redefine problems
People often seek to create solutions that are "outside the box." But what's the process for getting there? A critical first step, according to cognitive scientist and author Art Markman, is to restate problems. That's because problem statements cue related memories that people use to develop solutions. For example, if you frame a marketing problem as "what advertising campaign will help us increase market share," people will only propose advertising solutions, as the problem statement will cue advertising-related memories. But if you changed the problem statement to "what's the best investment we can make to increase market share," they would suggest a broader array of options cued by the concept of investing to grow business. "Most of us have been looking in the wrong place for our creative insights," writes Markman. "We ask people to 'think outside the box,' but we should be asking people to find more descriptions of the box and see what that causes us to remember."
4. Add resource constraints
One counterintuitive finding from research into creative problem solving is that constraints are good for creativity. "[W]hen there are no constraints on the creative process, complacency sets in, and people follow what psychologists call the path-of-least-resistance—they go for the most intuitive idea that comes to mind rather than investing in the development of better ideas," writes innovation researcher Oguz Acar and colleagues. Constraints come in many forms, including limiting inputs like people, time, funding, and materials. Google, for example, reportedly limits the size of engineering teams on projects, and Jeff Bezos won't attend meetings with more people than two pizzas can feed.
5. Accept MVPs
Finally, MVPs shouldn't end when you find product-market fit. Particularly when you're uncertain about the impact of a solution to a problem, consider an MVP to test it. And don't just limit them to your product. Think about all the places where you can use them, from product to marketing. Also, don't think that once you're successful, MVPs are beneath you. Organizations that learn fastest will always win in the end.
Hopefully, by implementing such approaches, we—and you—can beat the odds on corporate longevity. In the process, we can also keep our problem-solving skills sharp and flex our creative muscles.
Thanks to Mark Kostove, Matan Berson, and Hassan Muhammad for their contributions to this post.
