Large companies can continue to innovate by bringing on leaders from startups.

      Startups often seek to recruit prominent executives from established companies for advisory and C-suite positions. These appointments address a common challenge: as startups expand and strive to compete with larger players, they require seasoned corporate talent to help them succeed.

      Conversely, large, established firms face their own persistent issue. They are often too large and entrenched, struggling to keep pace with the very startups that recruit their experts. Currently, it resembles the fable of the hare and the tortoise — but this time, the slower approach is not winning.

      Established firms should learn from the startup approach by recruiting C-suite executives from their competitors — the startups. Larger companies typically demonstrate a concerning slowness in adapting. They tend to be excessively bureaucratic, reliant on outdated systems, and unable to effectively pursue new, vital opportunities.

      For instance, IBM's bureaucratic barriers led to internal budget disputes and a focus on safeguarding mainframe revenue, hindering a proactive transition to cloud computing. As a result, competition surged ahead.

      Large corporations often lack the agility to innovate, adhering to an “if it ain’t broke, don’t fix it” mindset that prevents them from rapidly pursuing new products, markets, and technologies necessary for remaining competitive. Kodak exemplified this by clinging to its profitable film business for too long; by failing to adopt digital cameras, which ultimately took a toll on film sales, it filed for bankruptcy in 2012.

      Currently, the rise of AI in the corporate sector — with its capacity to spur rapid innovation through small teams — should serve as a wake-up call for large companies. So, what is the remedy? Major corporations should take bold steps in their hiring practices. They must trust tech entrepreneurs and invite them into the C-suite.

      Startup leaders can break through the groupthink that often pervades the boardrooms of established firms, where executives are typically sourced from the same industry or other large companies. These leaders can act as disruptors, introducing fresh ideas and a culture of experimentation, and they are not averse to failure — understanding it is a critical component of innovation.

      Additionally, startup leaders possess a keen awareness of evolving consumer trends. They instinctively search across sectors and markets to pinpoint trends and opportunities, acting swiftly to capitalize on them. Established companies may believe their extensive customer data provides the best insight into emerging trends, but this is a misconception. Their data often reflects a bias towards maintaining the status quo, and when trends can be discerned, they are usually micro-trends confined within the existing business framework.

      In such cases, intuition plays a crucial role — and startup leaders typically have the sharpest market instincts. They also excel at eliminating departmental silos to create agile, cross-functional teams.

      For example, a startup leader collaborates closely with engineers, marketers, and customer support in a tight-knit team to quickly develop and scale new products. In contrast, the same process in large businesses tends to be segmented, fraught with obstacles and indirect collaboration.

      Some may question whether startup leaders can adapt to the corporate environment, but many of the most effective ones began their careers in such settings. Most corporate executives have primarily worked within big companies, while startup leaders usually have experience in both arenas.

      Others might hesitate, wondering if entrepreneurs would be willing to forego their startup autonomy. This is a valid concern, and the solution lies in granting them freedom. Allow them to make a significant impact and provide the necessary budget. They might move on swiftly, but they will leave behind an innovation playbook — and that’s perfectly acceptable.

      As an entrepreneur and investor focused on building and supporting startups, I relish witnessing their disruptive effects on industries. However, there’s no reason that incumbents can't also drive disruption. This competitive spirit would be advantageous for everyone.

      To achieve this, we need major companies to leverage the expertise of their startup competitors.