The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth

by Eric Ries

A growth board, then, has these same three responsibilities: To be the single point of corporate accountability for an internal startup.

To act as the single clearinghouse for information about the startup for the rest of the corporation.

To provide metered funding to startup teams.

I recommend: The startup is allowed to spend its growth-board money on whatever it wants, without micromanagement.

However, the ironclad rule of the growth board has to be: The money is yours, but you cannot get a penny more if you do not show validated learning.

Small Group, Right People:

Frequent Meetings:

Action Oriented:

Fact Based:

No Attendance, No Vote:

CONTINUOUS TRANSFORMATION REQUIRES A RIGOROUS APPROACH

RIGOROUS TRANSFORMATION IS ENTREPRENEURSHIP

The most difficult kind of cross-functional collaboration: enlisting functional leaders in the creation of new and competing functions, thereby breaking down old functional silos and requiring old enemies to make common cause.

A UNIFIED THEORY OF ENTREPRENEURSHIP Here’s a grandiose way of talking about all of these ideas together. Today, most organizations (no matter their size) do some amount of the following activities: Build entirely new products and seek new sources of growth. Build new “internal products” such as IT systems and HR policies. Do corporate development: buying other companies and startups, spinouts, corporate venture, tech licensing/tech transfer. Do corporate restructuring or transformation, such as building a corporate team (like FastWorks) to introduce a new way of working.

These details are not essential. What matters is that the organization does the following: Assigns responsibility for the entrepreneurship function to somebody (too many orgs have nobody). Gives these people real operating responsibility instead of designating them merely as futurists or instigators (as too many “chief innovation officers” are). Builds a career path and a specialized performance development process for entrepreneurial talent (producing a common standard that can be used across the pillars, no matter which function or division is affected). Facilitates cross-training of entrepreneurs across the pillars. (This is why VCs who have had real-world operating experience as founders are so highly prized, though I should note the many VCs who have succeeded despite not having it. What matters is the mindset, not the résumé.) Offers training, mentorship, support, coaching, and best practices designed to foster excellence in entrepreneurship across the organization. Somewhat counterintuitively, takes responsibility for educating the non-entrepreneurs in the organization, who, though not necessarily acting as drivers of change, will still need to adopt a more entrepreneurial way of working. Gives entrepreneurship a seat at the table when the other functions—especially gatekeeper functions—are setting company policy. This is incredibly important for finance, legal, HR, and IT in particular.

This is the true promise of the Startup Way: a management system that contains within it the seeds of its own evolution by providing an opportunity for every employee to become an entrepreneur.

But the most important use of the Startup Way isn’t to create better and more profitable companies. It’s to serve as a system for building a more inclusive and innovative society.

One recurring theme of this book has been the importance of seeing entrepreneurship as a tool for developing business ecosystems.

IT’S ABOUT POLICY, NOT POLITICS

If you want more people to become entrepreneurs, you need to think about what they were doing five minutes before they founded their company.

As a citizen of the world, I am very confident that the entrepreneurial ecosystem will flourish. The democratization of startup knowledge and the low-cost tools to experiment at scale that we discussed in Chapter 1 practically guarantee it.