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What corporate IT can learn from startups

Former Hailo and Betfair CTO Rorie Devine shares his experience of working with startups and what IT leaders can learn from them

I’ve just finished a six-month assignment as a TeamCXO.com interim CTO for a startup based at TechHub in London. Spending time surrounded by so many startups made me reflect on what larger, perhaps more “corporate” IT teams can learn from startups.

In my fairly chequered career, I have led teams numbering from one (me) to more than 1,000, so I’ve seen both sides of the coin. So, what are the top three lessons that larger, more established teams can learn from the sort of startups that are in TechHub at the moment?

Lesson one: Choose your attitude

When you walk into TechHub, you can feel the energy and optimism. It’s almost tangible and there’s no reason why any company should feel any differently.

Everyone in your company is a volunteer and chooses to be there. They should attack each day with passion and commitment, and if you’re one of the leaders, it is incumbent on you to be a role model with a great attitude and approach.

I’ve been in some workplaces where such a negative culture has developed that it’s almost painful to be there – you feel the very lifeblood being sucked out of you.

If your team is a bit like that, then you need to sort it out quickly. Be a role model for good, positive behaviours; encourage, support and promote the positive people in the team and remove the “energy sinks”. Your mental health depends on it.

The collective sum of your attitudes and behaviours will also go a long way to shape and create your company culture. Nothing will have a bigger effect on company or team performance than your culture, and a good one will go a long way to ensuring success.

Lesson two: Measure > test > measure

One of the things you notice about good startups is their use of, and focus on, metrics and analytics to measure the customer impact of what they do. There is very little decision-making by “hippo” (highest-paid person’s opinion) or gut feeling.

Good startups focus relentlessly on key metrics and measure > test > measure. They genuinely care about core business performance indicators and work on them obsessively every working minute.

They are also refreshingly free of preconceived ideas and A/B test their ideas whenever they can. They really only care about company results - not status, hierarchy, politics or anything else not aligned with company success.

Lesson three: Be mammals, not dinosaurs

One of the biggest structural reasons why established teams slow down is a sheer inescapable function of their size. At the risk of going a bit mathematical, if n is the number of people in a team, then the number of directional communication channels or relationships that need to be managed grows at (n x n) – n.

For example, two people = two communication channels, three people = six, four people = 12, and so on; 10 people = 90.

To be agile and survive, big companies need to organise themselves as a collection of small, independent, self-organising teams doing the right thing at the right time.

Any links between delivery teams must be avoided. They will only create constraints that slow down or even prevent business impact. The old approach of creating horizontal, shared services teams to maximise efficiency is very short-sighted in this age of unprecedented business disruption. All that this will achieve is that business profitability will be on a shallower controlled descent into obsolescence. 

Each (small) team needs to be set up with all the resources to deliver its goals. A team functions best when it has simple, common goals.

Of course, it’s not a one-way street. As startups mature into bigger, more established companies, they will acquire deeper insight and experience of their customers, create up-sell and cross-sell opportunities, gain access to new tools and approaches, not be so financially constrained, and create a bigger, more diversified talent pool to draw on. 

It goes without saying that “corporate” doesn’t have to mean “worse”.

I was recently at the headquarters of one of the Silicon Valley giants in California and, despite the company having more than 10,000 employees, everyone I met there thought, acted and behaved like they were still in a startup. That is one of the reasons why they will survive and thrive. It can be done.

Rorie Devine

Rorie Devine is an interim CTO and growth hacker with TeamCXO.com. He was previously CTO at Hailo, Yell and Betfair.

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