Act Like a Startup: 5 Lessons Bigger-Company CEOs Can Learn From Entrepreneurs

Ron-Hovsepian2. Lower your center of gravity
A small startup with just 25 employees can execute ideas swiftly. Getting approval on a decision is as simple as a walk down the hall or a shout over the cubicle wall. But for larger companies, bureaucracy is almost an inevitable byproduct of growth and success. That’s why CEOs actively have to combat the chain-of-command syndrome by empowering middle managers to make strategic decisions—one of the principles of CEO Ron Hovsepian’s agile development strategy at IntraLinks, a provider of secure collaboration solutions for 99 percent of the global Fortune 1000. The agile framework emphasizes a collaborative approach to development, with small teams of developers, designers and testers working together in short-duration “sprints,” delivering fully released code at the end of that time.

“This allows us to engage our customers early in the design process and often throughout the development and test lifecycle,” he says. “That enables us to build the right product to meet customer needs and allows us to validate our direction constantly throughout the development process.”

Because developers are building software in time-boxed sprints, the company can stay nimble, pivoting with changes to market needs. Empowering these small teams encourages savvy and quick decision-making—with real accountability. “Senior leadership has to set the table. We’re still there to drive it, bring energy to it, add vision and guidance; but as you scale, you need to lower of the center of gravity so you can move quickly.”

That’s a lesson Hovsepian learned as CEO of Novell from 2005 to 2011. He was tasked with turning around a company that had once dominated its industry but whose primary product, Netware, had been declining at a 12-percent clip. “Within two years, we had slowed that decline down to 6 percent,” he recalls. “But the big learning there was that you have got to grow the other part of your business faster.”

Hovsepian invested heavily in SUSE Linux, an operating system platform that Novell had acquired in 2003. “It was a $30 million business; and within three years, we had that up to a $270 million business.” When Attachmate agreed to acquire Novell in 2010, the SUSE growth was a big part of the value proposition.

“The lesson there for me is you have to take risks in growing your company when you have a declining business. You have to be even more aggressive about your execution and risk taking.”