There’s an offbeat theory that middle-aged men tend to wear the same clothes, cut their hair the same way and listen to the same music they did the last time they felt cool. Oblivious to the latest trends, a lot of people remain wedded to a style they associate with the most exciting time of their lives. And frankly, why shouldn’t they?
However, when middle-aged companies start doing the same thing, the consequences can be more severe. Even the world’s most successful brands can get stuck in the same old patterns of thinking, long after the caravan has moved on. This is pertinent to the Arabian Gulf region right now, where a number of traditional industries ripe for disruption have been dominated by the same companies since the 1970s and 1980s.
So what is the solution to this corporate conundrum? How can medium and large companies reignite the spark of entrepreneurialism that they had when they were younger?
For one thing, the answer is not for a CEO to throw on a hoodie and start running their business out of a garage. After all, not even Facebook is likely to be the next Facebook. Rather than imitating others, a few timeless rules can help more mature firms to remain competitive in what some might consider to be a young company’s game:
1. Play to your strengths
How did Apple restore its reputation as one of the most innovative brands in the world? By excelling at something people already associated with it: stylish and intuitive design. The path to sustainable reinvention often begins where you already have access to the deepest reserves of skills, knowledge and expertise.
Entrepreneurialism without execution is worthless, too. In fact, many established companies’ greatest strength over smaller rivals is a proven ability to scale up a good idea or promising innovation by manufacturing it reliably, marketing it effectively and distributing it efficiently. Established companies are also generally more equipped to harness the power of big data to drive innovation and to test their technical and commercial hypotheses before rolling them out to market.
2. Team up with high-calibre partners
One of the greatest assets of any established company is the equity built into its brand. Among other things, it means other firms are far more open to collaborating on research and development than they would be with a lesser-known entity.
For example, the golf brand Callaway unveiled its latest piece of state-of-the-art equipment in January this year. There is nothing unusual about that, except that its technical partner on the XR16 driver was not another sports company. It was the aerospace giant Boeing, whose aviation engineers – more familiar with runways than fairways – had helped to improve the aerodynamics of the clubhead.
3. Seek out new and different perspectives
All organisations can benefit from new and more diverse voices in the boardroom and management. This should include women and young people, who are often more in tune with emerging technology and consumer trends. This is particularly important in a region with the demographics of the GCC, where the average age is 27. That is why the appointment last month of a Minister of State for Youth Affairs and establishment of a UAE Youth National Council was such a timely step forward for our government.
It is critical that younger and more junior employees also feel that proposing new ideas is not just accepted, but is actively encouraged. In a start-up consisting of fewer than five people, this can be as simple as raising a new idea across a desk. For a medium-sized or large company, with hundreds or thousands of employees, achieving the same outcome requires dedicated policies and a management culture – set at the top – that is conducive to entrepreneurialism and rewards it.
4. Find the right ecosystem
In January, General Electric announced it was moving its global headquarters to Boston. Why there? According to the company, it wanted to place itself in the middle of the city’s 55 colleges and universities, including Harvard, MIT and Northeastern University. Boston and the state of Massachusetts are also building a new innovation centre, where GE employees and local researchers will collaborate.
The key to any successful innovation ecosystem is this kind of synergy between the public, private and academic sectors. That’s why one of the chief competitive advantages of the new Sharjah Entrepreneurship Centre at the American University of Sharjah, known as Sheraa, is the access it offers to Sharjah University City, its 15 educational institutions and 20,000-person diverse student population, and the local public and private sectors.
5. Invest in people
The next time you read about an obscure tech start-up that has been acquired for some obscene valuation, think about what the buyer is really paying for. Increasingly, it is not just the product or the underlying technology. Rather, companies making acquisitions today will often have more interest in the engineering talent behind the products than they do in the technology itself. They believe that the right talent can help to fuel their own entrepreneurial ambitions and are prepared to pay top dollar to bring it in-house.
It is often said that the classic start-up philosophy is to “move fast and break things.” That’s an exciting proposition, but it is not the only way to do business. For more established firms, the goal should be to foster an entrepreneurial culture that is consistent with the organisation you are today, but that allows you to evolve into the company you want to be in the future. In other words, to age gracefully, while remaining young at heart.
Badr Jafar is the chief executive of Crescent Enterprises and a member of the UN secretary general’s high level panel on humanitarian financing.
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