TBM 45/52: Big Disrupted Enterprises vs. "The Best"

Note: As a follow up to my talk on North Star Framework and OKRs, I am doing a deep-dive on North Star Inputs and Flywheels. Sign up! It’s free.

I have been thinking a great deal about the difference between rapidly growing digital-product first companies and large, disrupted enterprises. And the humans involved.

“Transforming” an organization is an order of magnitude more difficult than operating with the wind at your back. Most turnaround stories involve promising companies saddled with some bad apples and decisions. Nudging/coaxing a company from one way of doing business to another, is a whole other ballgame. Under ideal conditions, progress will be steady and safe (albeit slow). Under real world circumstances, investor patience is fickle, and the gravitational pull of the status quo is inexorable.

Even for skilled, inspirational, and experienced leaders, the odds aren’t great.

Compare these companies to digital-product first success stories. Younger. On their first, second, or third act. Still experiencing tailwinds. Built from the ground up to enable independent teams. Decoupled architectures. Aligned incentives (equity, etc.) Not required to turn a profit, or milking their decade-old cash-cow while they “try stuff”. People lined up for a shot at the name-brand gig, despite the short tenures. No real disruption to speak of. The competition may be fierce, but often it is a “a rising tide lifts all boats” situation.

We tend to put the digital-product first success stories (and their practices) on a pedestal. But how much of that is an abundance of fortune and riches? Are they healthy places to work? Truly psychologically safe? Do they do great work? A friend of mine has had a bad run of famous tech companies. From her perspective, “the money is good, but these companies eat people up, and believe they are the absolute best at everything they do. There’s no humility, and no perspective.” I’m not sure I share those views, but I can see it. I always try to imagine what they’ll look like in ten years.

We ALSO tend to make fun of the lumbering disrupted companies. But how much of that is the sheer inertia of past success—profitable, printing money—and the unique challenges of trying to shift course?

Imagine three leaders at big disrupted enterprises (BDEs).

• Leader 1: Let’s bring in an army of consultants, and do whatever the other Fortune ### companies are doing. We can’t hire Google engineers. We don’t have the right people. We have to show profits. Let’s be pragmatic!

• Leader 2: Newly joined. We need to operate exactly like BigTech. Quick, let's do OKRs. Quick let's set up empowered teams. At my last job at BigTech we just gave people audacious goals and got out of the way. Hurry, hire these experienced PMs. We need new blood! We need a culture of accountability like at [former employer].

• Leader 3: Let’s fund this change effort incrementally based on outcomes. Here’s what we’ll try. It can’t be surface level. Here’s how we will measure our progress. It’s holistic and empowering. We have the right people. I might tap consultants, but I’m not going to outsource this to them. I’m going to fire bad apples immediately. It can’t be just “tech”, it will shape the whole business. Yes, we can learn something from Silicon Valley in terms of how to structure and empower teams, but we need to uphold our strong cultural values. We need a longer term focus than most of these startups. And oh, it will take a chunk out of profits for the next couple years, and then really start paying off.

Leader 1 is playing it safe. No one ever got fired for hiring McKinsey. Leader 2 thinks BigTech is a panacea, and lacks contextual awareness. Leader 3 is humble, but is going to stake their whole career on this move.

Sure, Leader 3 sounds amazing. But it is very, very hard. I recommend Jon Smart’s book Sooner Safer Happier: Antipatterns and Patterns for Business Agility for a sense of what this might look like.

I’m not exactly sure where I’m going with all this, but I’m tired of people putting Silicon Valley on a pedestal. There’s a lot to learn from Silicon Valley AND a lot to avoid. Somewhere between “it’ll never work here” and “blindly copy X” is reality. I’m also tired of people making fun of the BigCos. The Leader 3s of the world are out there doing hard work, under challenging odds.

We need more empathy. Less blame and shame. And more appreciation for the hard work people are doing … especially in government, healthcare, and at disrupted mission-driven companies.