Larger businesses, on the other hand, can often fall foul of the ‘sunk cost fallacy’. This particular logical error means that the more you’ve invested in a particular thing – in terms of either time or money – the more unwilling you are to abandon it and move on. It’s the thing that convinces your brain that because you’ve put so much into it, leaving it behind would be a waste.
This fallacy frequently leads large businesses to stick with complex, unwieldy legacy IT tools, simply because they’ve spent so much money on them. In actual fact, however, moving to newer cloud-based SaaS tools can actually end up saving your business money. Not only are they often cheaper in the long run than the cost of maintaining legacy systems, the man-hours that can be saved with more intuitive and fully-featured tools add up quickly. According to a 2017 Forrester Research survey, cost reduction was a top factor for over half of organisations that are currently in the process of migrating to the cloud.
“Of course, stay true to your business and your clients,” advises Reader. “But don’t get stuck in the ‘this is how we do it’ mindset. A common word in the startup lexicon is ‘pivot’ – in other words, look at what isn’t working or isn’t serving your business best, and adjust accordingly. Listen to what your staff and clients are telling you. Inaccuracies and inefficiencies all impact the customer experience negatively, so take advantage of feedback, new ideas and advancing technology to improve your service and systems.” Thinking like a startup also necessitates a change in which metrics you use to judge success, White says. “One way of driving startup behaviour within large corporates is to emulate some of the things that startups measure. For instance, a real focus on what are called ‘traction metrics’. These are a form of ‘leading indicator’, i.e. a metric that tells you what the future might contain, rather than what the past achieved. Examples of these are user sign-up rates, engagement time, attrition rates, et cetera.” By taking these elements into consideration and tactically borrowing from the startup playbook, larger companies can re-integrate the energy and passion of a startup back into their business, which can fuel future growth and innovation. Becoming a large enterprise doesn’t mean that you need to become boring, predictable and risk-averse. Remember, when it comes to your company, it’s not the size the counts; it’s how you use it. Take our survey for your chance to win £100 Amazon vouchers