Commentary on an HBR article about Start-ups & Entrepreneurship
A friend posted this article on LinkedIn.com. Due to character limitations for comments, I decided to post my response here. Below is a link to the article referenced: https://hbr.org/2019/07/building-a-startup-that-will-last
The article is interesting, but the emphasis on “second and third acts” assumes that the start-up will successfully navigate the first act. Even with addressing what the author views as key points this is still a very big assumption. The reasons for Longevity and Success are far more complex and multi-dimensional, but it does place a spotlight on some of the more important areas of focus.
Long-term success requires several things: The right combination of having a unique goal that has the potential to make a big impact (think “No software” from Salesforce.com); Innovative ideas to achieve that goal; A diverse team to build the product (a mix of visionaries, insightful “translators,” technical experts, designers, planners, adept doers, etc.); Very good sales / business development / marketing to describe a better way of doing things and converting that to new business; and ultimately a management team focused on sustainable and scalable growth.
The point made about the need to, “Articulate a value framework oriented toward societal impact, not just financial achievement” seems a bit superficial and too tactical in nature.
First, there are unintended consequences to most new technologies. Social Media is a recent example, but Genetic Editing and AI are two areas that are likely to provide more examples over the next decade. Not every societal impact will be positive, and having a negative impact could very well lead to the untimely demise of that company.
Second, the two ideas (societal impact and financial achievement) are not mutually exclusive. When I owned my consulting company we had a goal of funding $1M worth of medical research that would find a cure for Arthritis. We allocated half of our net profits for this goal. Every employee was on-board with this because there was a tangible example of why it mattered (my daughter). We invested $500K, helped launch a few careers for some brilliant MD/Ph.Ds and at least one national protocol came out of their research.
Mission and Vision are so important to a company, yet so many companies fail to view this as anything more than a marketing effort. Those companies fail to realize that this is as much to motivate and inspire their employees, as it is to grab the attention of a prospective customer. These should be both inspirational and aspirational, such as the “BHAG” (Big Hairy Audacious Goals) that Collins and Porras wrote about 25 years ago.
Regarding Endurance and the assertion that “…the best businesses are intrinsically aligned with the long-term interests of society,” my take is slightly different. The best businesses are always looking for trends and opportunities in an ever-changing global competitive landscape – as opposed to looking to their competitors and trying to ride on their coattails. Companies with a culture of fostering innovation as a way to learn and grow (Amazon and Google are two great examples) are able to find that intersection of “good business” and “positive societal impact.” It is much more complex than a simple one-dimensional outlook.
But, it was a good article to help reframe ideas and assumptions around growth.
2 thoughts on “Commentary on an HBR article about Start-ups & Entrepreneurship”
July 27, 2019 at 2:12 pm
Great read. The triple bottom line and corporate social responsibility are hitting headlines harder every second, it seems. As we move forward, I’m certain we’ll see more focus on eliminating waste in the value chain, disposing of waste properly, utilizing design thinking as a starting construct to create products that are safe and environmentally friendly from the beginning, and sourcing quality “ingredients” from proper channels. I think the more interesting question is what this will all continue to evolve into ..to practice CSR in an increasingly intangible, platform-driven corporate environment.
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July 29, 2019 at 11:52 am
@BizBlurb – Thanks for the feedback and comments.
One interesting change that I have noticed is that Business Ecosystems are beginning to change (or evolve) to focus on partnerships where core beliefs, aspirations, and goals are more closely aligned – often tied to some concept of a “greater good.” Trust, communication, true partnership and mutually beneficial relationships (which include profitability) are more important than ever. In effect, that is somewhat of the platform-driven corporate environment that you mention.
There is a good book related to this topic that I have been reading the past week titled, “They will be Giants” by Robert Kim Wilson. I did some work with Kim about 10 years ago and was very impressed with him. This book addresses “Purpose-Driven Business Ecosystems” from the perspective of entrepreneurs, but the “ecopartners” approach he describes could apply to any business of any size. One of the things that I like best about this approach is that it should lead to more effective strategic alliances due to the alignment of common purpose and goals.
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