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How Lean Start-ups Can Avoid Big Company Disease

by Daryl Powell & Eva Rognskog
April 21, 2021

How Lean Start-ups Can Avoid Big Company Disease

by Daryl Powell & Eva Rognskog
April 21, 2021 | Comments (0)

As organizations grow, they tend to become fat, slow, and inflexible. This is the natural result of organizing activities for repeatable results – and has been given the name Big Company Disease (BCD). SATPOS, a lean start-up in Norway specializing in positioning, sensing and monitoring solutions for the ocean is learning to remain agile by observing the effects of BCD on its larger counterparts.

Ten years ago, as a small tech startup, SATPOS found itself fighting larger, established companies for a place in the then dominant oil and gas adventure, specifically Consciously avoiding "big company disease" has helped SATPOS maintain its start-up spirit.the geophysical exploration market. Though SATPOS was able to offer technology that had the potential to change the current market standards, the company was too small to win the market. Thereafter, given turbulent market conditions and massive decline, SATPOS turned to exploring other opportunities for its technology in the ocean-space.

With a vision for greater equality in the ocean exploration market, in 2019, the company was able to draw on its earlier learning and resultant technical knowledge to develop a new platform that allows a greater number of people to benefit from understanding and learning about the ocean - by applying low-cost, low-power ocean monitoring equipment. In doing so, they also discovered the ocean's green gold: seaweed.

Today, SATPOS is at the forefront of technological developments in the global seaweed industry, where from its offices in Horten, Norway, it is helping to lead the next green industrial adventure. However, in a period of growth – such as the one faced by SATPOS – there are a number of lessons that await scaling start-ups.

The founders and leaders of Toyota Motor Co. understood early on that as enterprises grow larger, they tend to grow less responsive to external change, as inefficiencies resulting from rapid growth and reorganization constrain internal adaptation. They called this Big Company Disease (BCD) – characterized by four primary symptoms:

  1. Defending processes over customers
  2. Defending silos over teamwork
  3. Putting down talented people
  4. Confusing heritage and legacy technologies

We believe that understanding BCD is of fundamental importance for start-ups and other small companies currently "scaling up" – as its unfortunate consequences can be disastrous. SATPOS has been vigilant about avoiding BCD in order to maintain organizational agility during a period of rapid growth.

Avoid Defending Processes Over Customers

When organizations get set in their ways, executives typically make decisions primarily to make their lives easier. Even though customers' tastes and requirements evolve (and continue to do so), firms develop new products based on executive pressures rather than customer needs. This ultimately results in the firm losing its customers.

At SATPOS, the process is the customer. SATPOS is a small, exciting growth company specializing in developing sensors and monitoring systems for valuable data capture in challenging ocean environments. With only seven employees today, SATPOS engages in the co-creation of real-time ocean data management solutions with its customers to understand more about the world's harshest ocean environments.

For example, its R&D engineers are committed to spending time on the customer's gemba, to understand the entire value chain for seaweed harvesting – from farm to fork. Understanding customer pain points is crucial for developing the next generation of solutions for the customer's contemporary problems. As a result, SATPOS has been able to develop a low-cost Seaweed Farm Management system that enables farmers – anywhere in the world – to increase profits and reduce risks by monitoring and controlling the farm remotely.

Resist Defending Silos Over Teamwork

Specializing work into functional silos is essential for developing the deep technical knowledge required for learning complicated things. However, silos quickly develop their own cultures and begin to compete for both turf and resources with the other specialties – neglecting the fact that the value customers receive results from cross-functional collaboration, learning, and improvement. At SATPOS, employees and managers embrace the learning that comes from understanding the systems nature of the company's business processes, always putting quality first. Being a small team, they have the freedom and capability to identify alternative ways of doing things, avoiding those that that slow us down and adopting new ones that enrich our progress.

We see failure as a key to learning. The secret, however, is to fail fast and learn faster.As a close-knit team of learners, we operate in a safe environment that accepts failure as a means of learning. For example, the team was recently experimenting with new ways to reduce the power consumption of the sensors and communication system. During trials they discovered a bug that prevented data from being transferred to the control system, which was ultimately caused by an error that was created when copying software code. As such, the team were able to reflect over the re-use of software code in new applications and identify possible risks in doing so.

Never Put Down Talented People

Young talented people tend to challenge the status quo by looking for better ways of doing things. They resent absurd policies and feel that competence should be valued over compliance. As a result, they may be seen as "troublemakers" that reject "company standards," and middle-managers (often afraid of being replaced) will reprimand them "to protect the organization from new blood and new thinking". SATPOS applauds young talent, as they are the driving force to lift our eyes from the established truths and challenge the way we think about innovation. Though the average employee age of SATPOS is approximately 25-30, we often look to older, more experienced, industrial mentors for guidance and support.

In practice, this often translates as learning what not to do – learning from the past failures of our mentors and sensei. After all, failure is the raw material of learning. Combining our mentors' solid experiences (both good and bad) with young new talent is a win-win situation that makes SATPOS able to move fast while being firmly grounded in experience. We keep pushing boundaries and inviting new blood into our team, which is essential for innovating, moving, and ultimately learning faster. 

Don't Confuse Heritage and Legacy Technologies

Some products and technologies are heritage – they have worked perfectly in the past, and they will do for years to come. However, some technologies become antiquated, prevent progress, and should otherwise be abandoned to move the business forward. Knowing which is never easy and needs constant challenge and reflection to figure out and avoid company-threatening mistakes. Product planning is critical at this stage - What should the company keep? What should be rejected? What should be improved?

In Norway, we have lived by the sea for generations. We have world-leading expertise in the maritime industry and operations in demanding conditions. We have a huge coastline and even larger sea areas. SATPOS is built for the future, not for the past. Nevertheless, we still hold on to our solid expertise and heritage from the oil and gas sector, for example how to build durable technology for harsh ocean environments. This experience has helped us understand what to do in new developments, and again, maybe more importantly, what not to do. It has given us a solid fundament for building the future. We are not afraid of failure. We see failure as a key to learning. The secret, however, is to fail fast and learn faster.  


What to do Next

Make 2021 the year that you FINALLY succeed at executing your strategy. Enroll in the workshop, Hoshin Kanri Remotely--Aligning and Executing on Your Organizational Objectives, which will show you a proven way to create and achieve your company’s annual objectives. The next class is taught by Laura Mottola and starts on May 21. Learn more and register.

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