29/05/2016 9:22 AM AEST | Updated 15/07/2016 12:53 PM AEST

What Small Business Can Teach The Big End Of Town About Disruption

Don't fear innovation and change, drive them

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Big business can learn from the ways small business innovate and drive industry disruption.

They may not have massive budgets or a dedicated marketing team, but small businesses are leaving big business in their wake when it comes to creating disruptive technologies and driving innovation.

This trend is so pronounced that big companies are now realising the importance of fostering a small biz culture by creating purpose-based innovation teams designed to bring a new way of thinking to the boardroom table.

Business resilience expert and founder/CEO of the Resilience Institute Stuart Taylor said that in recent times, entrepreneurs and startups have been the ones driving change and innovation, challenging the status quo -- and most big businesses aren't yet equipped to follow their lead.

The institute recently completed a three-year study of more than 16,000 people and 250 organisations that revealed only 51 percent of Australian organisations considered their company to be agile and ready to adapt to change.

Resilience Institute
Business resilience and leadership expert Stuart Taylor advises corporations on the best ways to handle industry disruption.

Taylor said the study also found that large business tended to have alarmingly low levels of staff morale -- 36 percent of those surveyed said they were at a high level of worry and distress while 81 percent said they were working at peak intensity and full capacity.

"This is not an environment for agility, entrepreneurship and innovation. It's a culture of keeping your head down," Taylor told The Huffington Post Australia.

"Organisations need to be more responsive, attuned and creative in planning for multiple directions and scenarios to the best of their insight, but also make sure they are working hard on nurturing and recruiting leaders who have agility, welcome change and see change as an opportunity. Some small businesses do this incredibly well."

Here are four ways big business can follow the lead of smaller business and change their mindset to see disruption as an opportunity, not a crisis.

Make sure everyone knows your purpose

Taylor said bigger firms really need to be conscious that their employees know what the company is trying to achieve on a broader scale -- the 'why'.

"Small business are in a situation where they are generally in close contact with everyone in that organisation, and it's usual that the owner started the business for a reason, the 'why'," he said.

"In bigger business, that reason may not be as apparent to everyone who works there.

"You need to know that what you're doing is contributing to something; if you can buy into that, you want to stick around and be part of it. If not, it's hard to be engaged and be able to respond to challenges and potential disruption.

"There are definite health and well being aspects to be considered too."

Some larger businesses tend to want to ignore change, rather than embrace it, Taylor says.

Be agile

Agility is key, particularly when it's your industry that's being disrupted, Taylor said.

Bigger organisations can get preoccupied with having a long-term plan, but those plans usually don't allow for a quick response to change or disruption.

"You need to have purpose and a horizon, yes, but you need to understand key scenarios that could unfold. You need to make sure you have leaders and staff with agility and a willingness to embrace that change, and do that quickly," he said.

"When I look at small business, there is much more agility and willingness to duck and weave and adapt."

Taylor said a lot of big companies feared change because the bigger the business, the harder it was to achieve.

"It's like the analogy of the enormous ship wanting to change direction -- it's not easy to do and it takes time," he said.

"There can be so much infrastructure invested in a current product, service or culture, and to shift that can be a large exercise. In small business, it's less the case. There are also less decision makers in play in small business, so there are more opportunities to make decisions quickly and be responsive."

Stimulate a creative culture

Taylor said big business can learn from the way small business tends to be more collaborative and foster a culture of creativity.

He that while not all small businesses operated that way, they seemed to enjoy stronger communication and a minimal fear-based culture.

"Complaining, protesting and resisting rarely achieves anything other than breeding negativity and pessimism," he said.

"Unfortunately, a lot of the work we do is around trying to encourage leaders and staff in larger organisations to move away from a fear-based culture and one that is driven by 'I don't want to speak up in case I say the wrong thing' or 'what if I experiment with a new offering and it turns pear-shaped and I don't make my numbers?'.

"If a leadership structure is in place that punishes those situations, then creativity is enormously stifled. That then also has an impact on the individual's happiness, engagement, performance and wellbeing."

Steve Debenport
Large and small businesses both need confident, strong leadership in times of industry disruption.

Be a compassionate leader

Taylor said strong leadership was fundamental for the success of both big and small businesses, but a more flexible approach with regards to staffing and HR issues may give smaller businesses the edge.

He said small business owners tend to be more engaged with the individuals who work for them, and thus have a greater understanding and appreciation of what drives and motivates them.

Small business tend to use a leadership style that's not necessarily a friendship, but one that respects the individual and offers them flexibility when it's needed, he said.

"I think that kind of leadership is seen more often in smaller business. Sometimes it requires tough conversations and tough love, but it's a leadership style that is sometimes missing in bigger corporates where there can be avoidance of conflict.

"If you haven't got a good leadership framework and culture in place, it's not going to be conducive when dealing with disruption."

He said while industry disruption can impact on small and big business, both can minimise the effects by also encouraging their staff to be resilient.

"A big part of dealing with disruption is to make sure you're investing in your people and fostering resilience, so it's not only leaders who are agile to change," he said.

"You see it a lot in big organisations, particularly in government, where even a whisper of change causes paralysis."

A strong, resilient team working collaboratively will see disruption as a challenge, and an opportunity to improve, he said.