View from Europe: can multinationals display start-up spirit?

Start-ups are very fashionable these days. And it seems that every self-respecting multinational corporation (MNC) needs to display ‘start-up spirit’, which is why most top managers are busy with their own ‘in-house start-up culture’. Frankly, this is utter tosh.

Understandable as the idea might be (start-ups are faster and nimbler), the belief that MNCs somehow morph into larger versions of start-ups is nothing but a pipe-dream. It is in the DNA of multinationals to preserve their standing and market position. Everything is geared towards risk mitigation, stability and the avoidance of surprises; experiments are just not their thing.

Instead of trying things out, they have multi-stage planning processes, intricate coordination matrices and forever growing controlling and auditing departments. It is this approach to running the company that extinguishes any whiff of start-up spirit. Apart from that, start-ups are chaotic, volatile and have a high likelihood of perishing along the way – the last things that MNC culture condones.

Let’s face it, if you are a CEO of a large corporation who wants to see detailed project plans, and hiring is a multi-stage process including assessment centres and the like, the chances are that you are pathologically incapable of anything resembling the anarchy of a start-up.  

Start-ups are about trying things out; firms who know what they are doing are about optimising production, scaling things up and establishing processes that work without fail every single time. 'Start-up spirit' is also a lack of standardised processes. If you are serious about start-up spirit, a first step might be pruning back the elaborate compliance, governance and risk-management architecture, which in all likelihood has grown cancer-like over the past years.

I am not saying it isn’t a good idea to think about potential risks or to stay compliant – but it is indisputable that we have gone a bit overboard with all of that.

And let’s face it – being an MNC isn’t such a bad thing. Start-ups crave nothing more than becoming established players. No one wants to remain in hand-to-mouth limbo forever. True start-up spirit lies in trusting your staff and letting them take decisions – even at the risk that some of these will be wrong and will cost you money. But if they can try out ideas without putting their career on the line if things go wrong, you will get a flood of new ideas. And that is what you really want, instead of chasing the next corporate fad.

Martin G Kaspar is head of business development at a German mittelstand company within the automotive industry. E-mail: martin.georg.kaspar@gmail.com