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Picture this: a century-old company, rooted in tradition, sitting comfortably on a pile of golden eggs. Across the street, a hungry start-up, all nimble and new, is blazing through the marketplace with ideas that might just change the world. What’s a legacy company to do? Innovation isn’t just knocking at the door—it’s barging in, uninvited. Welcome to the age of disruption, where standing still isn’t an option.
Legacy companies face a pressing question: How do we keep up? While the young guns are built for speed, fueled by cutting-edge tech and top-tier talent, established companies are often stuck tinkering with incremental innovations. Sure, tweaking the old product might keep the wheels turning, but will it change the game?
The short answer? Probably not.
Most legacy companies find themselves in the golden goose dilemma: they’ve got a cash cow (excuse the mixed metaphor) that’s still bringing in big bucks, so why mess with it? The problem, of course, is that clinging to the past doesn’t protect you from the future. When bold start-ups are revolutionizing industries, sticking to incremental innovations is like rearranging the deck chairs on the Titanic.
In this brave new world, companies that want to survive need to disrupt themselves—before someone else does.
Enter the perfect solution: partnerships. Instead of going it alone, why not team up with start-ups that are already taking moon shots? Start-ups have the big ideas, cutting-edge tech, and the hunger to take risks. What they don’t have are the resources, scale, and infrastructure that legacy companies enjoy.
Take Coca-Cola, for example. Rather than trying to disrupt the beverage market on their own, they invested in Keurig Green Mountain, recognizing the potential for disruptive single-serve cold beverage pods. It wasn’t Coke’s wheelhouse, but Keurig had the innovation chops to make it happen. Together, they created a whole new category.
Partnerships like this allow legacy companies to tap into bold ideas while minimizing the risk. Start-ups provide the spark, and established firms bring the fuel.
But what if partnering with a start-up isn’t the right fit? Enter intrapreneurship—the idea that you can foster innovation within your own ranks. Intrapreneurs are employees who think and act like entrepreneurs, given the freedom and resources to experiment with new ideas without the fear of failure.
Google is a classic example. The company’s 20% time policy allowed employees to spend one day a week on projects outside their official roles. From this freedom came some of Google’s most innovative products, including Gmail and Google Maps.
By encouraging employees to take risks, legacy companies can foster a culture of innovation from within. It’s about creating an environment where big, bold ideas are celebrated—not punished.
Of course, none of this is easy. One of the biggest hurdles for legacy companies isn’t the lack of ideas—it’s the corporate culture. In many large firms, innovation is seen as risky, unpredictable, and expensive. And when your whole company is designed to minimize risk, that’s a tough mindset to change.
But change it must. Legacy companies need to reward risk-taking, empower employees to think outside the box, and ensure that innovation is more than just a side project—it needs to be a priority.
Here’s another approach that established companies have been using for years: setting up independent companies or R&D units to disrupt their own business model. It’s like hiring your future competitor before they even exist. These skunkworks units are tasked with developing technologies and business strategies that could potentially take down the parent company’s core business.
Why? Because it’s better to know how you could be disrupted before someone else figures it out for you.
Consider Lockheed Martin, one of the earliest adopters of the skunkworks concept. During WWII, Lockheed set up a secret division to develop experimental aircraft—away from the corporate bureaucracy. Today, many companies use similar strategies to incubate innovation away from the watchful eyes of risk-averse stakeholders.
This approach allows legacy firms to disrupt themselves from the inside out, developing new products and technologies that have the potential to upend their current business model. And best of all, if the experiment works, they’re the first to market.
So, what’s the takeaway here? Legacy companies can compete with the start-ups, but they need to shift their mindset. By partnering with entrepreneurs, fostering intrapreneurs, and even setting up disruptive units designed to challenge their own status quo, these firms can survive—and thrive—in a world where innovation never sleeps.
In the end, it’s not about the latest technology or the most brilliant idea. It’s about having the courage to disrupt yourself before someone else does. After all, the only thing worse than killing the golden goose is letting someone else do it for you.
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