Since the Great Recession in 2008, startups have become a major force in society. Today’s entrepreneurial culture — with lower financial barriers to launching a business and people’s increasing desire for flexibility, freedom, and purpose in their work — has bred a whole generation of young companies that have quickly scaled and revolutionized a wide range of industries. A number of those companies, like Airbnb and Uber, have achieved explosive growth and evolved into bonafide conglomerates in recent years. Meanwhile, older organizations looking to remain relevant and thrive are striving to figure out the practices that allow these startups to excel — and how their corporations can adopt them in order to catch up.
At the helm of this paradigm shift is Eric Ries, author of The Lean Startup and leader of the movement of the same name. The Lean Startup ideology focuses primarily on how startups can apply practices from Japanese manufacturing methodologies to be more efficient with both human capital and creativity.
In his latest book, The Startup Way, Ries has bridged the gap of these learnings from the startup realm into the larger world of big business, helping large companies innovate, acquire and retain talent, and increase revenue. With insights on the practices of historic powerhouses like GE and Toyota, as well as more recent disruptors like Twilio and Facebook, The Startup Wayprovides management practices for organizations of all sizes. Here are some of his top tips for established companies looking to leverage startup practices to evolve and grow their businesses.
Cultivating your workforce should start with accountability, not new hires.
Many business leaders think success happens solely by hiring superstar employees from high-profile companies. Ries warns that the cultivation of strong teams is not this simple. “If you’re unhappy with the innovation results you’re getting, the natural thing people do is go top-down by simply replacing people,” Ries explains. “They try to hire a hot-shot entrepreneur or acquire a startup or put up some sort of motivational posters — which is nonsense. It’s backwards.”
Ries outlines four layers of priorities that companies must tackle to ensure they’re growing and maintaining a talented and reliable workforce:
1. Accountability
First, companies need to keep current employees accountable through clearly defined goals and rewards systems. To construct these, organizations must take inventory of their resources, including general budget and opportunities to promote current staff, to determine what is possible logistically. With clearly outlined responsibilities and incentives, employees will be more motivated to contribute to the organization’s short- and long-term goals.
2. Process
From there, companies can build informed processes that determine how they handle decisions and work day-to-day. In order for an employee to contribute to a company-wide goal, they must understand how the broader organization operates and how their particular role may contribute. For example, if the aforementioned employee’s goal is to increase sales leads by 10% and the employee feels motivated by the offer of a $10,000 bonus upon its completion, they will only be successful if they understand the correct stakeholders and processes that might interact with this goal.
3. Culture
New hires won’t fix a company’s problems if the company doesn’t foster an environment conducive to retaining them long-term, Ries argues. He says workplaces that focus on an open exchange of ideas and learning opportunities are best positioned to draw in and keep talented individuals. These people want to work somewhere where they can have influence and grow personally.
“If you want to attract the best of the best, they have to believe that they’re going to have a significant impact with their own ideas in the company,” he explains. Ries also encourages companies to focus on investing in ongoing education for employees. Employers who encourage workers to learn new skills and be collaborative will not only satisfy the employees’ desire for professional growth, but will also enhance the existing talent within the company.
4. People
A benefit to taking the steps above is that you may expose hidden talent within your organization by empowering employees to join teams and take on the tasks best aligned with their strengths. This is common practice at growing startups, where roles and duties can change quickly. Employees often wear lots of hats out of necessity in order to tackle different business needs, often driven by whatever skills they’re good at.
When employees know how to be successful within an organization and are provided with opportunities to highlight their strengths, they can take on work that provides the most organizational value. As such, Ries believes companies should focus on unlocking talent of current employees before looking externally.
“What I have seen is remarkable,” Ries says. “When you change the structures around people, you discover talent in your midst that you didn’t even know you had.”
One way to expose this talent is to continually encourage employees to develop new skills, and ensure that your culture values continued education and personal growth. “Companies need to get serious about cross-training and cross-functional collaboration and not just talk about it,” Ries adds.
Entrepreneurial experiments drive personal development and company-wide innovation.
In a small, growing organization, it’s often easy for employees to get their ideas in front of company leadership and put them to the test. For larger companies, though, there’s a much longer pipeline from idea to testing — which can lead to missing out on products that could grow the business.
Ries says in his initial talks with organizations, he seeks to understand how they enable employees to propose and test ideas for new products and features, if they even have formal processes in place for doing so.
He strongly advises that large companies develop frameworks that empower individual contributors to vocalize and potentially test their ideas in a real-world context. This leads to personal growth, but is also essential for driving innovation and remaining competitive in today’s business landscape.
To do this, companies can create streamlined processes that allow employees to run experiments that impact P&L to a degree. These experiments can provide valuable insights on a project before more widely scaling, while simultaneously mitigating larger strategy or financial risks.
They also create highly effective environments for training employees in general management skills. For example, an employee could expose a new onsite feature to a small percentage of visitors to understand its efficacy. From this minimal but genuine exposure, the employee will have concrete data to determine whether or not the feature should be further invested in or scaled broadly.
“The companies that are able to do this will harness creativity, test out people’s good ideas, and allow people to grow quickly into leadership opportunities if merited,” Ries says. “They will kick the butts of old-fashioned companies.”

Courtesy of the General Assembly by Christina Troitino, remainder of article at https://theindex.generalassemb.ly/eric-ries-on-5-lessons-companies-can-learn-from-startups-b9ef651e74f3