I don’t know anyone that thinks being nimble is a bad thing. In the business world companies are constantly praised for their ability to be nimble but more often, people lament the inability for large companies to be nimble. Being nimble means you’re adaptable, you’re more able to deal with change. You’re able to take advantage of opportunities quickly, instead of sitting by and watching others capitalize on them while you sit on the sidelines.
The quintisential nimble poster child it the start-up. Why are start-ups able to be so nimble? There’s probably a myriad of reasons, but let’s break it down simply.
The Nimble Start-Up
- Low Cost Commitments: Start-ups have low operating costs, especially fixed overhead costs. They employ fewer people, the don’t own huge corporate complexes and they don’t have armies of infrastructure people like HR, Legal and IT, that are crucial but don’t bring in any direct revenue themselves.
- Low Cost Investments: Start-ups have minimal sunk costs. They have typically been in business for only a few years, or less, and haven’t spent millions or billions of dollars into any one part of their business so changing directions doesn’t come with perceived financial losses. Along those lines, they also aren’t reliant on one piece of business that brings in billions of dollars so there are no loyalties or risk of The Innovator’s Dilemma.
- Optimistic: Finally, start-ups don’t have the psychological barriers to change because they see the upside of new opportunities not the down side of leaving something behind (they often do, but it’s still outweighed by the opportunity.)
But how do you apply these same principles to our personal lives? How do we become more nimble in our own lives so that we’re able to adjust to the big changes that come our way? Richard Florida talks and writes extensively about The Creative Class, which the lifestyle equivalent of the start-up.
The Nimble Creative Class
- Low Cost Commitments: The Creative Class tends to rent, not own. The biggest inhibitor keeping people from adjusting their lives to the new economy is that they are tied down with “stuff,” mostly their houses, but also cars and just crap they don’t need. When my wife and I made our most recent move to London, we sold everything we possibly could (psychologically, not physically) and we already know when we go back we’ll probably get rid of half of what we did keep. We own no cars and very little furniture. You have to have a little more when you have kids but much less than you think you do. We may never own a house and two cars again. Why would we? In fact I’ve fully embraced a digitally minimalist life. There are very few physical things I want anymore.
- Low Cost Investments: The Creative Class also lives closer to cities. They tend to live in major metro areas. While the cost of living is higher in big cities, you also have a lot more infrastructure provided for you. In London, we can easily live the next two years without cars because of public transit and services like Zipcar. We don’t have to pay a lot of money for entertainment because there are more than enough museums, libraries, art galleries and other attractions that are free or low cost. We don’t go to many movies and we walk a lot and go to parks. While the cost of living is huge in London comparatively, we spend much less on the other stuff we used to like entertainment and insurance.
- Optimistic: Lastly, I’m an entrepreneur at heart and that means that I’m naturally an optimistic, risk taker. I always see the up side. I’ve constantly moved and while it has been disruptive at times, it’s always turned out better in the long run. It’s hard for sure. Sometimes you just want your stuff and you want a decent washing machine, but because we’re not tied down, we know that this too shall pass.
BTW, if you haven’t read any Richard Florida, I can’t recommend him enough (Amazon links):
- The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community, and Everyday Life
- Who’s Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life
- The Flight of the Creative Class: The New Global Competition for Talent
- The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work
Lastly, I want to address what these ideas mean for your organizations. How can large organization be more nimble knowing that they’re going to have more overhead, they’re going to have to deal with The Innovator’s Dilemma of sunk costs and legacy business? Here’s a few simple ideas:
- Low Cost Commitments: You have overhead but most companies don’t need as much as they think. Why does every employee need their own desk? I don’t. If I didn’t have my own desk, I’d have much less junk (which I don’t really need). Why not adopt “team spaces” that are more like co-work spaces? You need to accommodate different people’s needs but no one needs an office with a door. They just need rooms they can go in and shut the door. With more people working from home or working remote, how many empty desks are there right now? I bet in our office of ~60 people we always have at least 10 desks that sit empty. Probably more. With everything going digital and being moved to the cloud and the trend in BYOT (Bring Your Own Tech), these all represent more cost saving.
- Low Cost Investments: Quit trying to develop everything yourself. Partner more. Do what your good at and create more partnerships that reduce your investment and can actually increase your return, not diminish it. One of the best books on this (I know so many books) is Collaborative Entrepreneurship: How Communities of Networked Firms Use Continuous Innovation to Create Economic Wealth.
- Optimistic: This one’s pretty obvious I think. Quit looking at risk with fear of loss and uncertainty. Look at it as an opportunity. If you’re doing the above two things, you’ll be set to embrace the change and take advantage of the new opportunities. I was in Boston for a VC summit 4 years ago, the day the market fell 777 points and at the opening dinner that night it was obvious who the entrepreneurs were and who the bankers were. The entrepreneurs were (cautiously) excited, the bankers were scared to death.
Don’t be a banker!
- Paul Graham on Start-up Hub Cities (ammori.org)
- How Instagram Has Stayed Nimble As They Approach 10 Million Users (techcrunch.com)
- What’s The Link Between Social Business, Occupy Wall St, And The Creative Class? (forbes.com)
- London Update: Week 1 - The Book Lives Strong in London. (tacanderson.com)
- Home is where your luggage is. (tacanderson.com)