Big business can still innovate — by adding startup leaders to the C-suite

Startups love hiring big business leaders into advisory and C-suite roles.

These hires solve a common issue: as startups grow and look to compete with incumbents, they need some corporate talent to see them over the line. 

But big, established businesses have a different common issue. They’re too big, too established, and being outcompeted by the very companies that are hiring their talent. 

Right now, it’s the hare and the tortoise — but slow and steady isn’t winning the race this time. 

Established businesses need to take a page out of the startup playbook and hire for the C-suite from their competitors – the startups. 

Larger, more established businesses are often embarrassingly slow to change. They’re overly bureaucratic, addicted to legacy systems, and unable to compete in the race for new, critical opportunities.  

For example, bureaucratic silos at IBM led to budget fights and leaders focusing on protecting mainframe revenue instead of aggressively pivoting to cloud computing. Competition raced ahead.

Large businesses are far too slow to innovate. Stuck in an “if it ain’t broke, don’t fix it” mentality, they aren’t chasing new products, markets, and technologies fast enough to stay competitive. 

This was the case for Kodak, which clung to the once-lucrative film business for far too long. Failing to embrace the digital camera space, which cannibalised film sales, the company eventually filed for bankruptcy in 2012.

Now, the proliferation of AI in the corporate world — and its ability to facilitate breakneck innovation with small teams — must be a wake-up call for big business.

So, what’s the solution? Big businesses need to hire boldly. They must put their faith in tech entrepreneurs and bring them into the C-suite. 

Startup leaders can conquer the groupthink that currently infects the boardrooms of most established businesses, where executives are often hired from the same industry and from other large, incumbent businesses.

These leaders can act like disruptors, bringing in new ideas and a culture of experimentation. They’re also not afraid to fail — because they recognise this is a key step towards innovation.

Startup leaders are also far more tuned in to shifting consumer trends. They reflexively look pan-sector, pan-market to identify trends and opportunities — and will act decisively to seize them.

Big businesses hold the customer data and assume it gives them the clearest view of emerging trends. This is wrong. Their data is biased towards the status quo, and where trends can be identified, they’re micro-trends taking place within the strict confines of the existing business and its products or services.

For this, instinct is far more important — and startup leaders tend to have the strongest market instincts.

Startup leaders are also adept at breaking down departmental silos to build agile, cross-functional teams.  

For example, a startup leader is used to working in a tight team directly with engineers, marketers, and customer support to build and scale new products at speed. At large businesses, the same process is compartmentalised, full of barriers, and indirect.

Some will question whether startup leaders can handle the big corporate machine. But the truth is, that’s where many of the best ones started. Most corporate leaders have worked only in corporates. Startup leaders have almost always done both.

Others might wonder if entrepreneurs will want to give up their startup freedom. It’s a great point — and the answer is to give them freedom. Let them have an outsized impact, give them the budget they need. They’ll move on quickly and leave an innovation playbook — that’s fine.

I’m an entrepreneur and investor — I build and back startups. I love seeing them disrupt industries. But there’s no reason industries can’t be disrupted by the incumbents too. The competitiveness would benefit everyone.

But to get there, we need to see big businesses leaning on the expertise of their startup competitors.