We’ve all read many articles eulogizing the benefits of self-employment & disavowing the corporate ladder.
We are told that the mega-corporations with their greasy poles, cubicle etiquette, and sexist dress codes are dinosaurs. Close to extinction. Soon to be relics of a bygone era. Here’s the thing… the dinosaurs keep going. They keep doing their thing. They keep making their stuff. They keep listening to their consumers. They keep figuring out smart ways to make money. And some of the good ones are even starting to get a bit smarter about flexible working policies, process innovation, and better governance of their environmental impact.
But.
Scale is no longer the massive barrier to entry that it once was.
But.
Large-scale corporations are still massive money-making machines with lots of vested interests.
Which means they are not going to be scared off by a few entrepreneurs. Nor are they going to give up their profit margins and corporate bonuses without a fight.
Which means they are not going anywhere soon.
And that's a good thing, especially if you are just starting out in your own business career. Here's why.
- Use Big Business to get trained in the basics: By necessity, Corporate is good at this stuff. Understand the difference between a P&L, Balance Sheet, Cashflow statement; Dig into cost drivers in your supply chain; Build efficient brand architectures; Create effective governance mechanisms. OK, so that last one might not sound essential to your new super-sexy start-up, but robust governance will keep you on track & out of jail. Great governance doesn't need to be the overblown bureaucracy typical of most corporates, but look behind the curtain of bureaucracy at the intent & mechanics of the governance, & take the necessary learning.
- Know your enemy: It’s likely that you will find yourself competing on the front lines of consumerism with these corporate giants as you set out on your entrepreneurial journey. Having the inside track on how they operate, their margin expectations, cost structure, and strategic priorities is a huge competitive advantage. Understand, from their perspective, why it is that your excellent business model just won't work. Face the fact it is highly unlikely that they simply haven't considered the model you have “invented”. It is far more like that they have considered it (or something quite similar), and realized that it is margin dilutive to their core business. Fear not. Compared to your competitor, your income & margins are 100% incremental. Your frame of reference is entirely advantaged vs your competitor. Take the opportunity to understand their frame of reference, and plan to compete accordingly.
- Know what good (and bad) looks like: Corporate organizations are brilliant at some aspects of business & lag behind in other areas. Getting up close & personal and making an unbiased assessment of what is good, bad & downright ugly will help you make choices in your own business endeavors. Don't you like HR policies? Great. Make it your mission to do things differently. Impressed by the innovation strategy? Learn how they built it. Go deep to really understand. Then do better. They will always have deeper pockets than you. To compete, do better.
- Know when to get out: Money can be addictive & seductive. Corporations know this & pay salaries & bonuses accordingly. Throw in health care & a few other benefits & it is hard to walk away from a life of financial uncertainty. And that is ok. Entrepreneurship is hard, & risky & not a pathway guaranteed paved with gold. It is not for everyone. But for those who are certain of their entrepreneurial future, a life in corporate business is hard and risky in other ways. Do not get seduced by financial security. Spend & invest wisely during your corporate career, then remember to get out while your entrepreneurial spirit can still be nurtured and flourish.
- Don’t become them. Many entrepreneurs plan an exit strategy that involves selling their business to the very corporations they have fought to win against in the marketplace. This makes sense. Big corporations struggle to make intrapreneurship succeed; acquisition is a win-win. Sell. Move on. You are invested in your business. You want to nurture it during this tricky transition to new parents. To stay is to become trapped by the organizational constraints of corporate life. You became an entrepreneur to escape this. Now you are successful, sell, move on, build a new endeavor or mentor others as they build theirs. Do not fall into the trap of becoming part of the machinery once more.
So, to recap, having experienced life from inside the corporation can be a big advantage when you compete from the outside.
- Learn the basics of business, they are good at this stuff.
- Get deep inside the enemy’s head.
- Learn what good (and bad) looks like. Make a plan to avoid the bad, & do better than the good.
- The financial security of corporate life is seductive. Do not get trapped in a high-rolling lifestyle & know when you have learned enough to get out. Then go!
- When the exit strategy comes. Sell. Move on. Create a new (or retire early!). Do not stay. The corporation will neither understand nor value you. Do not try to become them.