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As I write this article I’m on the plane heading back from sunny, beautiful and delicious California.  To be more specific the bay

area, that bastion of innovation where one feels like they are surrounded by greatness and all is truly possible. On this particular trip I was working with a client on an exciting project that is centered around the supply chain and in particular delivering heightened levels of operational execution and visibility through a mix of business process automation layered in with multi-channel communication systems. Hopefully someday in the not too distant future I can elaborate more fully on this really ground-breaking work and the importance of it.

I digress…. I was talking about sunny, beautiful and delicious California. Everytime I am in this area I can’t help but be in awe of the density of truly ground-breaking, innovative, “changing-industries” companies that call this area home. A quick jaunt on 101 takes you into the realm of well known companies like Oracle, Google, SUN Microsystems (now part of Oracle), Salesforce.com, Apple and the next round of up-and-comers like Pacific BioSciences, Zynga, Azul, Workday, Xirrus, PivotLink and on and on and on. For anyone even remotely interested in business this is a living lab full of fantastic case studies and mixed with its own blend of unique Silicon-Valley drama (i.e. Apple’s lost iPhone 4G skunk-works phone). It was this kid in a candy store feeling that made me want to put “ink-to-paper” regarding this special ecosystem that exists and things that corporate supply chain practitioners and stakeholders might learn from it to improve their own operations.

Supply chains by design are complex, highly-variant, and at times unwieldy creatures that always require constant care and feeding. In a very macro sense, the supply chain with its many stakeholders, variables and complexities comes close to paralleling the operating environment of an early to mid stage technology innovator like the ones described earlier. I know, I know – I can hear it now. You hard core warehouse operations guys are going to tell me I’m full of you know what and the high-altitude of my Delta flight is getting to me. But hear me out. The innovators in silicon valley deal with:

• Complex Operating Environment – what’s our weekly burn? can we get to break-even with version X? why is our cost of acquisition per customer rising so dramatically? if we add another work hour to the 24 hour work day can our huge team of 2 deliver the new software module on time?  …. You get the picture.  Its a difficult environment to operate in and takes a special and dedicated breed.
• Hyper Competition – If you read the story on the lost iPhone (linked above) you will have gained some perspective on the competitive forces these companies deal with.  Fortune 100 companies have nothing on some of these nimble startup companies when it comes to the multi-faceted aspect of their competitive sphere.
• Visibility Challenges – Just like corporate supply chain practitioners seek comprehensive visibility, these companies have different visibility challenges but similar in scope.  In summary, lots of people wanting lots of answers at the drop of a hat.
• Numerous Stakeholders - Even though some of these companies are small, only a few employees, the extent of the stakeholder value chain can be immense.  From VC and private equity interests to patent holders and those gray-haired board of advisers – each startup has many stakeholders they must interact with.

It is amazing that in such a pressure-cooker type environment that these companies are able to produce such great technologies, businesses and industry-defining advances.  I certainly recognize that out of every 1 Google-like star there are thousands, if not tens of thousands of failures that are equally defining but in more of a failing star (i.e. black hole) type of way.  With such an environment and with all the complexities what is it that makes this area so amazing that success after success can occur?  Is it something in the water? Or better yet, maybe it is a general over-consumption of Mountain Dew and Skittles by hopped up software programmers.  Oh no, I have it…..it is a Steve Jobs conspiracy and all inhabitants of the greater bay area are cyborgs…and the Guvenator is overseeing the whole thing. (video included for your enjoyment…)

So the cyborg thing is a bit far-fetched.  The reality is that I think there are some very easily captured characteristics that are exhibited by these companies and their leadership that can be applied directly into your corporate supply chain to drive better results. I’ve prepared the below list as a small highlight of some of the characteristics that I believe are most applicable:

1. Flexibility / Adaptability - Companies in this area seem to have a unique ability to adapt to the frequent changes in their operating environment.  This adaptability doesn’t come through luck or happenstance, instead these companies make it their job to stay plugged in and cognizant of the ecosystem around them.  It is a conscious, day-in and day-out investment of time and resources.  Quite possibly the biggest difference is that startups view change as healthy, each new variable or tact is just another on the path to success.  In large corporations it too often appears that change is the enemy.

2. Communication - Naturally the communication in a small startup will be superior to that of a large corporation with hundreds or thousands of team members.  To take you way back to your corporate training – its a simple matter of fewer senders and receivers.  However, I believe the communication in a startup is superior for another reason and that reason is candor. In a startup environment the clock is always ticking, the next product launch, the next funding round, and so on.  It is in this time sensitive environment where team members learn a different approach, its called being candid.  I once saw a note somewhere in my readings which went something like this, “I’m candid with you because I care enough to be candid and I value our relationship.”  The message is simple, life is short – dispense with the niceties and corporate political BS.  High performing startups seem to have a knack for developing the type of camaraderie, common vision and straight talk that drives results.

3. Outreach to Academia – Startups, their founders, stakeholders and associated are allied and plugged in to the academic and research powerhouses in the area. They recognize that no matter their industry there are always big changes, new thoughts and new opportunities present.  I would presume that some of these startups view their involvement with academia as food for their collective startup “brain”.

4. Fail Fast Mentality – A giant characteristic in the “black magic” potion of startup success could very well be their affinity with the idea of failing fast.  This put it on the line, assimilate feedback quickly, and build it or dump it is certainly something that could have direct correlation to the environment of supply chain.  Often times, supply chain practitioners take too long in instituting changes and wait too long in cutting it loose if it doesn’t work.  In the startup environment, I know many entrepreneurs take pride in their hatchet mentality when it comes to dropping those losing ideas, products and enhancements that are not bringing the company closer to success.  This idea may be the simplest of all, if it isn’t working drop it and focus your efforts elsewhere.  Unlike fine wine and cheese, bad ideas don’t get better with time.

There are other characteristics that I could list out but these are a few of my favorite ones. Do you have some characteristics that you would like to share that you think are important?  If so please email me at douglasringram [at] gmail [dot] com.  I always love new ideas and thoughts !!!  (see above point #1)

Before I get any nasty emails let me say it is very easy for me to paint with a large brush.  Clearly, there are large corporations and supply chain functions that work well and need just a few refinements.  The main point of this article is that a well-oiled startup machine has some unique characteristics that each of us could take back to our companies and refine to help make us better.  Besides who doesn’t want to be better, and along the way maybe you’ll develop your own Google-esque success story!