Creating Networks is The New Competency

By Scott Kirsner |  October 16, 2013

Case on What’s Happening at Big Companies Right Now

“Most large companies recognize that they can’t just play defense. They can’t just be protecting the status quo. But as companies get larger, it is harder to innovate. Figuring out ways to create a network around your company is important. It’s why there are 85 companies that are part of the MIT Media Lab. More companies are creating venture capital funds — even 7-11. Companies are investing in venture firms, and supporting initiatives like Startup Weekend. They want to be connected to the startup community, see ideas a little bit earlier, see opportunities for partnership and acquisition. The world is changing rapidly. Most smart people don’t work for them. The traditional command-and-control, build-it-within model has broken down. Today requires a more of a networked approach, and more collaboration. Otherwise, you run the risk of being left behind.”

“It’s a little like creating an API to plug into your company. How do you create ways to get a sense of what’s happening out there that might be relevant, and let people know that you want to build some connections?”

Being Big

“At AOL, it was challenging. At the peak of AOL, we had 10,000 employees, and after the merger with Time Warner, we had about 80,000. No question it gets harder. We shifted from being an attacker to a defender. At the core is how to create an innovative and entrepreneurial culture within your company, and more importantly, an ecosystem around your company.”

  • GE is “doing interesting things in the maker space, hosting events, and they had a booth at South by Southwest.” One example of a maker-oriented initiative is GE Garages, which offers training and access to high-end fabrication tools.
  • Sprint is “working with Startup Weekend, and shifting from being a relatively traditional, incumbent telecom company to being more of a platform for innovation, and a partner with entrepreneurs. I think that’s the new skill set for large companies.”
  • American Express has partnered with Facebook and Twitter to allow people to socially share information about what they’re buying and access discounts, and it has invested in next-gen payment technologies like Revolution Money. “They rebranded the Revolution Money platform, now called Serve, and it will generate over $1 billion in revenues this year.”
  • Google acquired a startup that was building an operating system for mobile phones, which eventually became Android. Case also mentioned Google Glass and the company’s self-driving car experiments.
  • Amazon “has been pretty good at scaling their core business while figuring out how to invest in new things, like LivingSocial, which we’re an investor in. They’ve acquired and protected Zappos as an independent brand.”
  • Yahoo, under new CEO Marissa Mayer, has started acquiring companies like Tumblr, a micro-blogging site. “They’ve said, ‘We’re open for business. We want to acquire or partner with great entrepreneurs with great ideas.”

Are You Changing the World, or Just Protecting What You’ve Got?

Entrepreneurs, Case says, “have this attacker, ‘we can change the world’ mentality. The people running large companies have more of a manage/operate/execute mindset. Of course they want to grow and innovate, but they mostly don’t want to lose what they’ve got. They want to figure out ways to protect what’s there and add to it. Entrepreneurs have nothing, so there’s nothing to protect. For them, it’s all about seizing opportunity.”

How Not to Squash Innovators

We discussed the idea that in many companies, the vast majority of employees are focused on operations. Perhaps one percent are real innovators, and they often find themselves battling the other 99 percent for attention, resources, or access to customers. How do you overcome that kind of resistance? Case says that you can’t do it without support from the top. “If the CEO is signaling that all he or she cares about is making the numbers this quarter, that will be the mindset. But if they say, ‘Yes, we need to make the numbers this quarter, but we need to be positioned for where the puck is going,’ people will be trying to embrace that idea.”

How do you create urgency within a big company that doesn’t take market, technology, or customer shifts seriously enough? Often, it takes a crisis, Case says. “Crisis is a terrible thing to waste. You don’t want to find yourself in crisis, but [you can] use the crisis to force more radical reinvention of the company.”