Work to Preserve the Innovative Fervor of a Start-up after an AcquisitionNovember 12, 2009
 The major defense contractors are mostly struggling to design and produce unmanned aerial vehicles (UAVs) at a time when the Pentagon has earmarked nearly $1.5 billion for the aircraft in its 2010 budget. To tap into this demand, they are forming partnerships or outright acquiring the smaller companies that created these cheap, yet effective, aircraft, according to The Wall Street Journal. Lockheed Martin, the Pentagon's biggest contractor by sales, is working with General Atomics to supply the U.S. Navy with UAVs while Boeing acquired Insitu, a UAV manufacturer. This summer, Boeing began to build an entire UAV division that includes Insitu but decided to give the drone maker a loose leash. The Journal reported that Insitu's booth at a recent trade show in Washington, D.C., was in a separate area from Boeing's, and that Insitu executives' business cards did not even feature the Boeing logo. Keeping the new acquisition at arm's length is an attempt to preserve the innovative fervor of the start-up, according to Robert Chalfin, a lecturer at Wharton, who teaches a course on entrepreneurship through acquisition. "Boeing has it right to allow as much of the culture and environment that created the innovative products to remain." Despite best intentions, most start-ups acquired by larger companies slowly lose their innovative drive. As the two companies begin to share enterprise software, suppliers and other programs, the "start-up" can lose its edge. The dominant culture of the acquiring company can also migrate to the smaller unit and drive away critical innovators. "Many people are drawn to start-ups or small businesses because they don't have the same bureaucratic structure as larger companies," says Chalfin. "They don't have the standard work hours, the dress code and they can work on projects of their own making and at their own pace." Start-up entrepreneurs usually chafe at having to follow the pace mandated by a larger corporation and are the first to leave to set up new companies where they can get their creative juices flowing again. To avoid this brain drain, Chalfin says that companies must try to keep as much of the original environment alive as possible to encourage the creativity — as Boeing is attempting with Insitu. It is easier said than done, he adds. (Courtesy photo (RELEASED)) |
|
