How to move fast: Innovation at speed and scale


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Leading start-ups innovate, go to market, and scale quickly with limited resources. What can large companies learn from the start-up playbook?
In this episode of the Inside the Strategy Room podcast, McKinsey partners Stacey Haas and Brian Quinn, along with senior external adviser Julie Baskin, lead us through conversations they have had with leading entrepreneurs about the lessons larger consumer companies can take from how digital natives and start-ups innovate quickly. (For more conversations on the strategy issues that matter, subscribe to the series on iTunes.)Stacey Haas: Innovation is critical to driving growth but remains an opportunity for many large consumer companies. Today we’re talking about how large companies can take plays from start-ups’ playbooks to make them more competitive in a changing world. We’re going to hear from entrepreneurs about the techniques they’ve used to go to market and scale quickly with limited resources. We will see how larger companies can try to emulate some of that behavior to innovate more quickly. We will also discuss how large companies can leverage what they already do very well and apply it to new growth initiatives.We’ll share conversations we had with the people behind the meal-kit company Plated, the performance dress-shirt company Mizzen+Main, the jewelry company BaubleBar, as well as Uber. The leaders of these companies told us stories that may at first sound like start-up adventures that don’t translate to more established companies, but we believe there are valuable lessons in their experiences.First though, we’ll join a conversation I had recently with my colleagues who specialize in strategy and innovation. Brian Quinn is a partner in our Chicago office, and Julie Bashkin is a senior adviser based out of New York. We met in Chicago to discuss the key questions our clients tend to ask us most frequently about how large companies can drive growth through innovation.

Julie Bashkin: I’m noticing this issue with clients where they’re having a “head slap” moment. Five years ago, they were thinking, “Start-ups? Who? We don’t care about them.” And now they’re calling it the “bee swarm” or sometimes they call them “ankle biters,” where one start-up is not a threat, but many of them combined are threats. And they seem to have come out of nowhere, and they seem to be moving fast with no resources. And they seem not to be weighed down by the baggage of their own success, like our big clients are.

Brian Quinn: I think it’s been something of a painful lesson for most incumbents to see just how much growth start-ups have been able to take. If you look back over a five- or seven-year window, despite the top 25 manufacturing roughly 50 to 40 percent of the overall category sales volume, they’ve driven somewhere between two to five percent of the growth. All of the growth has generally been ceded to start-ups. The first thing is there is something we actually have to learn about what are they doing and what are the ways that they’re playing that actually enable them to have that kind of success.

The biggest thing that makes most start-ups move really quickly is urgency. They are running on the amount of capital and the amount of funding they have at any given moment. And if they cannot get to a next milestone, whether that is actually getting to enough sales to start self-sustaining the enterprise or get to a next milestone with a venture funder, they’re done. And that level of urgency, that degree of fuel to move quickly, just doesn’t exist inside most large organizations that I’ve worked with.

Haas: Before we go on to hear from the start-ups we talked to, I want to pick up on Brian’s point about start-ups facing urgency with few resources. Those conditions necessitate moving quickly to go to market and scale. Start-ups have to be creative and scrappy about how to do this. The story we’ll hear first, from Daniella Yacobovsky, the CEO and cofounder of the jewelry company BaubleBar, illustrates this well. Daniella worked in investment banking and private equity before starting BaubleBar in 2011, selling on-trend fashion jewelry through pop-up stores and other methods. Today BaubleBar has multiple brands that are sold through large retailers as well as directly online. Speaking at our Digital Consumer conference in New York recently, Daniella describes how she and her partner elevated the creativity and scrappiness we’re talking about to an art form when they were figuring out channels for selling their jewelry.

Daniella Yacobovsky: When we first started in 2011, we were gifting every fashion blogger there was for free. And they were posting about it for free, because no one would’ve ever thought to have asked us for money. We were like, “Ha, we don’t have any. Joke’s on you!” We got a lot of really strong organic placements, a lot of strong organic support. When you don’t have money, it’s just guerrilla warfare. Amy and I would be everywhere with bags of jewelry just putting it on people. Like, “I think you’d like this necklace.” And we were just throwing it at people. We would do whatever it took to get on our jewelry on the right people.

And I think that our team was really great about thinking through our social strategy. And how are we connecting with our community in a way that feels really organic and authentic? I’m not going to say that it was necessarily planned that way, because I don’t think anybody necessarily planned it that way. We were a really tiny team. It wasn’t possible for our social content to go through multiple layers of approval and discussion. And is that the voice? And is that the tone? And do we feel comfortable with that? And we also were not a target for legal anything at the time. I mean, we were ten people sitting in a room just like, throwing around jokes. But we were moving really quickly. And if we thought something was funny, we put it up on social. And if we thought something was aesthetically beautiful and in line with our visual, we put it up on social. And we saw how people reacted and we just kind of went from there.

Haas: Next we’ll hear from Uber’s general manager, Beth Huddleston. Beth joined Uber’s Dallas location and then took on a global role. You might think Uber would be a very different story from BaubleBar, but the emphasis on making decisions quickly and constantly trying new things are common threads for these, and really all start-ups. Moving quickly for Uber meant making decisions at the local level. At first this meant the brand wasn’t unified across markets, but their rapid growth quickly overcame this.

Beth Huddleston: The way we were organized enabled us to innovate really quickly. We pushed decision making down to the most local level possible, meaning we had city teams setting prices, negotiating deals with sports teams, and doing all kinds of things that in a much more grown-up organization would rightly be centralized. I think that enabled us to get from here to there.

What it also created was a situation in which we didn’t have one resident brand voice. We didn’t have one consistent customer experience. It created what I call a brand vacuum that then got filled with what was kind of the six-months-ago crisis that was, frankly, a huge gift for us. Because it’s enabled us to evolve and to see where we needed to grow up. Because we’re a little bit too big to be quite as risk seeking as we once were. A lot of it’s been really internal HR processes; things that would not naturally seem as though they would translate directly into customer experience, but we started treating our people better, we started caring for them in a different way. And by our people, we also mean our drivers. So that population and culture of caring and of looking after people, I think, was a pretty significant change from where we were before and has become a very different customer experience for the millions of drivers that are on our platform.

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Here is a direct link to the complete article.

Stacey Haas is a partner in McKinsey’s Detroit office, and Brian Quinn is a partner in the Chicago office. Julie Baskin is a senior external adviser to McKinsey.


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