Big companies grow more slowly than successful startups. Yet, they have far more capital, people, and technology than their younger rivals. Some big companies have overcome the dysfunction that results from their superior resource endowments and adapted the traits that spur startups’ faster growth. What should your company do about it?
To begin to address this question, I offer a short case example to illustrate some of the underlying causes and challenges in big firms that lead to slow growth. Next, I offer three entrepreneurial actions, each of which can support your growth strategy in the face of these big company challenges.
The Case of Big Blue
IBM needs to get its startupness back. Big Blue is a $105 billion (2012 revenue) company but its revenues are shrinking at a 3 percent rate while demand for its products and services—as measured by corporate IT budgets—are rising at 4.1 percent in 2013 to $3.8 trillion.
The reasons why IBM is shrinking in a growing market are complex...
Professor of Management
Peter Cohan teaches strategy to undergraduate and MBA students including courses such as Strategic Problem Solving and Strategic Decision Making. Since May 2002, Cohan has served as an Executive in Residence at Babson, advising teams in their consulting work with companies through Management Consulting Field Experience (MCFE) programs. He created and led the Hong Kong/Singapore Start-up Strategy Offshore Elective for MBA students and the Israel Start-up Strategy Offshore Elective for undergraduates. He also has served as a visiting professor at Barcelona's EADA.