Why the largest hotel group in the world is competing against Internet Start-ups, and Jaguar Land Rover is bidding to buy a taxi company

Two headlines from the major financial news media today that would have been unthinkable 10 years ago:

“Jaguar Land Rover weighing up bid for London minicab company Addison Lee”

(City AM Acquisitions 29APR2019)

And 

“Marriott poised to be the first major hotel company to creating a home rental platform competing with Airbnb and others”

(Wall Street Journal Cover story 29APR2019)

You may ask:

Why would a storied luxury car company buy a minicab business? 

And 

“The largest hotel company in the world plans to rent out houses from Paris to Poughkeepsie?”

While the answer to those questions depends on who you ask (to remain relevant in the mobility and technology business, and to provide an alternative to Airbnb seem to be the most frequent answers) one trend is clear:

Large Multinationals are having to behave like Corporate Venture Capital groups to remain relevant as market preferences shift quickly and consumer behaviour morphs with technology.

Can a multinational really act like a scrappy startup?

Is there a way the infamous bureaucracy of large business, triumphed in films such as Office Space can be vanquished for companies that people want to work for?

The excellent performance culminating with a Trillion Dollar market cap milestone this week at Microsoft shows it is possible. A few years ago Microsoft was practically considered written off, another relic on the road to technological superiority. Yet today the reinvented Microsoft has a record high valuation, and is considered one of the most desired companies to work for worldwide (Hr top 100 2019).

What is the roadmap to installing entrepreneurial culture in a large organization?

There are 5 common elements to creating a culture that creates value in this spirit:

1. Acknowledge and reward long term value creation as opposed to only focusing on short term results
2. Create and reinforce a sense of purpose and meaning: not corporate jargon, a real focus people believe in and come to work for
3. Encourage risk taking and recognize failure will be more frequent than success
4. Install processes for Decision Making, Strategy, and thinking about your customers that are not solely incremental and rather promote breakthroughs
5.  Look for unlikely partnerships, alliances, and acquisitions that give your firm new capabilities to quickly test and execute on new opportunities identified in your target markets

Changes in technology, in distribution, geopolitics, and your customer base have permanently altered the way competitive advantages are created.  

The shift is the most profound since the Industrial Revolution.

The upcoming battles for value creation will be won based on the ability to hire and recruit the best talent, and then develop your people to execute on the long-term with a focus on sustainability. 

From the board through to the front lines, the way we think about and execute on Business Strategy and economics has changed globally. Now you must change the way your company works to ensure future relevance.