When a big brand has “kids”, but a little time to care about them.
Big companies establish small firms to develop and test new products. The startup atmosphere is supposed to help employees to be more creative and the mother company to avoid complications if the product finds no interest in the market and the project has to be closed quickly.
Cutting your brand into pieces
These phenomena have a second variation: a big company starts to separate its existing departments from her body and turn them into small companies that then become contractors of the mother and the mother is the only customer for each of them.
What can happen next? The small company loses a connection to the main brand. Both employees and top managers are left behind any changes in branding policies, in the vision of the mother’s future and its positioning on the market.
They cannot catch up with the changes in the general target audience and re-design their product in a timely manner, if at all.
The top management is not a part of the mother’s hierarchy and fails to provide a vision for the small company’s future. The “startup” folks have no relationship to the people working directly for the brand and the main product. Thus, the once startup under the cozy mom’s umbrella turns into one of the thousands of small contractors that surround large companies, struggle for each penny, and are easily replaceable.
Losing your human capital
Since the startup employees seldom have contact with the “adult” colleagues, career paths become limited to the “child”. Despite there still can be internal job announcements sent to the startup folks too, word of mouth can meet some difficulties in reaching those, who officially work for another firm.
And the startup itself is too small to satisfy many ambitions. When the time comes, the career-oriented employees look for other jobs, leaving the “child”.
As soon as the first good ones are gone, it becomes more and more challenging to find new highly engaged people. The company ends up with employees that consider it as a temporary stop on their way to some other giant. In a year or so they depart as well.
These short stays and the secludedness from the mother’s usual business lead to the degradation of the shared feeling of responsibility for the final product.
The employees are given only a limited period of time and no power to promote their decisions. They assume that they cannot initialize any serious projects or changes. They deal only with routine things, giving up the creativity.
Last but not the least, many people, who accept offers from small companies, do so to keep their work-life balance. Thus, they often expect a nine-to-five job. Even top managers of the small companies would like to have a more relaxed tempo, since their payment is modest.
Especially, if they know, this is not a startup, and the company is protected by the mother and there is no reason to do too many extra hours.
Such a company has stable life support, but it cannot breathe, develop, and grow.
The Stevin’s Law stops working
As a result, a small firm top manager meets a big firm top manager and they can barely understand each other. A big big boss has a lot of pressure and tries to delegate it to his colleague from the smaller company, but the second one rejects to comprehend. He is not a part of the big brand, so why worry?
The communicating vessels stop working properly. One of them is sealed.
Even if the mother company manages to maintain the same pressure on the smaller firm, that is not going to work for longer. An independent contractor can accept the pressure and see it as an investment in the company’s future, but the “child” company would not. Since it cannot manage its own future freely, it is not motivated to do so as well.
A help yourself company
Altogether, the startup folks get no benefits from the mother company, but a lot of pressure. I happened to work in such a company for one and a half years. We had quite a few colleagues that left during their trial period or started to look for new jobs right after this period was over.
That created a mistrust spiral. Our customer — the mother — did not have a permanent contact person in our company. Their managers had to explain things many times to ever-changing project managers.
Every new round they got less enthusiastic. You cannot expect from an average person to repeat the same presentation in the same manner for the tenth time. More and more details that later proved to have been crucial for the product were forgotten to be handled over. Or the new manager on our side would forget them.
When I joined the company, the spiral reached its top.
We did not receive any requirements and specs anymore, not such that we could start working with, so we turned to reverse engineering. We took the old system and dismantled the processes into meaningful parts (ETL processes in our case) and then re-assembled them again for the new ecosystem.
We were very successful in it, but it was getting harder.
We made a lot of jokes about our reverse engineering and had fun. But we were not effective. Few months before I left, the mother company stopped all meetings with our project manager and did not allow her to tell us that they were not communicating any new requirements. Mushroom management.
A short afterword: a longing for belonging
We saw our colleagues from the mother company in the canteen, but they remained strangers for us. We never took part in the all-hands or celebrations that had to do with the mother company’s brand. We only knew that it was not doing good, but nobody told us how we were going to deal with it.
We were not in that big “we”. We were a contractor company, receiving a selective part of the communication going on in the mother.