Corporate Field Trip: Learning From Startups

Updated March 26, 2013, 4:13 p.m. ET

Corporate Field Trip: Learning From Startups

By RACHEL EMMA SILVERMAN

Maybe Goliath can learn a few things from David.

A handful of large companies, including PepsiCo Inc. PEP +1.40% and snack company Mondelez International Inc., MDLZ +1.37% are sending small groups of employees to work stints at technology and media startups, learning how smaller companies get things done with fewer resources, often at a quicker pace.

The hope, managers say, is that workers who spend time immersed in small, emerging firms will bring some of that scrappy spirit back to headquarters and change the way things get done.

At Mondelez, a corporation of about 110,000 employees created when it was spun off from Kraft Foods KRFT +1.20% last year, managers wanted to jump-start efforts to shift more of its marketing to mobile devices. So they chose nine mobile-technology startups to host Mondelez staff, among them inMarket, a two-year-old Los Angeles mobile-marketing firm with a staff of 20.

Scott Marcus, senior brand manager for belVita, speaks at a meeting to determine marketing strategies for Nabisco’s belVita Breakfast Biscuit at the inMarket office in Venice Beach, Calif.

The idea of the immersive program was to go beyond a typical meet-and-greet with entrepreneurs.

“We want to really understand, to feel that entrepreneurial spirit that drives every single person working at the startup,” says Ed Kaczmarek, director of innovation and emerging technology at Mondelez. “There’s no way that is ever going to come across in a two-hour meeting or over the telephone.”

For several days, Gary Osifchin, a senior marketing director at Mondelez, observed inMarket teams’ stand-up meetings, and participated in a series of “rapid ideation” drills, in which he and colleagues had to repeatedly design the entry screen for a mobile app in under 40 seconds.

“I am a horrible drawer,” says Mr. Osifchin. But the prototyping exercise and rapid-fire brainstorming sessions “forced us to think really quickly and really focus.”

Mondelez staff say they were surprised at how quickly the smaller firm built and tested prototypes of new marketing efforts. Mr. Osifchin also took note of startup-company quirks, such as the large bell that staffers rang to gather colleagues and magnums of Champagne feathered with Post-it Notes encouraging workers to meet deadlines so that the bottles could be opened.

“It was like a student-exchange program,” says Todd Dipaola, inMarket’s founder and CEO, who noted that he was taken aback by Mondelez’s extensive market research.

Still, a few days or weeks spent in stand-up meetings won’t transform a staid worker into an entrepreneurial one.

Mondelez has tapped Boston Consulting Group to help gauge whether the mobile initiative, which includes the extended field trips, changes company culture and business, if at all. Participants at all levels of the organization fill out surveys and sit for interviews to measure any behavioral or business shifts, such as faster profit growth, more rapid decision-making or new ways to market products, says Jeff Gell, a senior partner at Boston Consulting.

Of course, startup management practices don’t always work in big companies, says Vijay Govindarajan, a professor at Dartmouth’s Tuck School of Business who studies innovation. The rule-breaking mind-set of many entrepreneurs doesn’t fly when ideas need buy-in from senior executives and several levels of management, he explains.

Some other companies are taking a different approach, but with the same goal in mind. New York Times Co. recently announced a business residency, called timeSpace, that will host three media-technology companies in their main offices for a four-month period. General Electric Co.’s GE -0.52% “GE Garages,” created in partnership with four tech startups, are roaming workshops that allow GE’s own workers and visitors to tinker and noodle together on new products. GE also began a companywide venture-capital initiative earlier this year, making the firm an investor and partner in some 60 startups

Even tech firms are turning to young companies in an effort to learn something. Seeking insights about product development, 17 top executives at software firm IntuitInc. INTU +1.37% spent at least a day last fall shadowing counterparts at some 20 tech firms, including gadget maker Jawbone Inc. and Uber Technologies Inc., the maker of a taxi-hailing app.

After comparing notes, the executives found that senior managers at the startups spent a significant amount of time in product meetings, says Brad Smith, Intuit’s CEO. That observation led the company to decide its executives should spend more time in the product-development trenches, says spokeswoman Cassie Divine.

Maggie Connors, an associate brand manager at PepsiCo’s Purchase, N.Y., headquarters spent a week last summer at the San Francisco offices of Airbnb Inc., the travel rental business.

Managers wanted workers to observe how the startup, with only about 200 workers to PepsiCo’s approximately 300,000, handled brand management.

The companies’ cultural similarities—both have casual, collaborative environments, along with wacky décor in conference rooms—were striking, says Ms. Connors. But the much smaller Airbnb met marketing goals without teams of number-crunching data analysts, myriad marketing agencies and hundreds of staffers. “They are a lot scrappier in the way they approach marketing,” she says. “They are more trusting of instinct.”

“It felt almost like we were entertaining people from a foreign country. We had to learn each other’s languages,” says Vivek Wagle, a senior marketing manager at Airbnb, which was founded in 2008. “When they talked amongst themselves it was like a foreign language, with a lot of acronyms,” he adds, noting that he was unfamiliar with the term CPG for “consumer packaged goods” before the PepsiCo visit.

Mr. Wagle says that his team was particularly interested in learning how PepsiCo compiled massive data sets of market research. “Everything is market-tested to the Nth degree. It was very eye-opening,” he says.