TFF #42: Bringing startup culture to SMEs - without turning everything upside down

Last week I spoke to a managing director. 40 employees, industry, 30 years on the market.

He said: "I see what these AI start-ups are doing. But we are not a startup. We can't risk everything."

I understood him. And at the same time, I thought: this is exactly the misunderstanding that slows down many SMEs.

The question is not: How do I become a startup? The question is: How do I get the speed without losing stability?

Researchers call this a "Lovable" organization - one that combines psychological safety with iterative learning.

I call it: safe speed.


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Maintain stability & gain speed


The problem: culture eats transformation

Most SMEs in the DACH region operate in a classic "family culture". Loyalty counts. Hierarchies are clear. Decisions are made by the boss.

That has worked for decades.

But now something new is happening: AI is speeding everything up. Competitors that didn't exist two years ago are building in weeks what would take you months.

Eurofound data show: Only a fraction of European SMEs reach "full digital intensity". The rest are stuck in the middle - too slow for the new world, too invested for a real new start.

The real problem is not technology. It is culture.

If employees are afraid of making mistakes, they won't experiment. If the focus is on risk-taking, you react too slowly. If innovation can only come "from the top", you are wasting your team's potential.

Studies on AI literacy show: Managers with a high level of AI competence have less "AI anxiety" - and their organizations are more resilient. But this competence does not come from reading. It comes from doing.


The framework: 4 steps to safe speed

You don't have to become a startup. But you can import the best elements - in a controlled, safe environment.

Step 1: Start with "Mini-Batch Innovation"

Forget the big AI strategy. Start with a specific problem that is annoying you.

The Lean startup principle also works for non-digital companies. The trick: divide complex problems into small parts. Test each part separately. Learn quickly.

An example: Your sales team spends 5 hours a week preparing quotations. Instead of starting a 6-month digitization project, you test an AI assistant for quotation texts in one week. Does it work? Expand it. Doesn't work? Next idea.

Step 2: Create a "safe experimentation space"

Research showsPsychological safety is the most important factor for successful digital transformation in SMEs.

In concrete terms, this means defining a budget and a time frame for experiments. Make it clear that failure is allowed - as long as you learn from it. Celebrate not only successes, but also "quick failures".

A team that knows that it will not be punished for failed experiments will experiment. A team that is afraid will wait - and watch others overtake.

Step 3: Use the "Four Ds" for your tradition

Family businesses and traditional SMEs have an advantage: values that have grown over decades. These values are not an obstacle - they are a foundation.

The IMD Framework "Four Ds helps to combine tradition and innovation:

  • DistillingWhat are the core values that must remain? Quality? Customer relations? Craft ethics?

  • Diverting: How can these values come to life in new channels? (e.g. craftsmanship quality + AI-supported precision)

  • Diluting: Where can you spread risk through new business areas?

  • Dropping: What do you have to let go of because it no longer works?

Step 4: Make intrapreneurship the standard

Intrapreneurship means: employees develop entrepreneurial ideas - for the company, not against it.

Specifically: Give a small team (2-3 people) the freedom to solve an internal problem with AI tools. Budget: limited. Time frame: 4-6 weeks. Result: A working prototype or a clear "That doesn't work".

This allows you to test AI potential without jeopardizing your core business. And at the same time, you develop the culture you need for the coming years.


Practice check: The Thun transformation

The Italian-Czech family business Thun - 70 years old and originally a pure ceramics manufacturer - has followed exactly this path.

Instead of choosing between "preserving tradition" and "disrupting", they applied the Four Ds. The craft quality remained (Distilling). Production was industrialized without losing quality standards (diverting). New business areas such as digitalized logistics were added (diluting). Inefficient legacy products were discontinued (dropping).

The result: from a local manufacturer to an omnichannel group - without losing the family DNA.

The key was "reverse mentoring": younger managers contributed digital expertise, while older ones provided values and wisdom. No generational conflict - a generational partnership.


Your next steps

This week: Identify a specific problem that is costing you time. Not the biggest one - one that is manageable.

Next week: Find 1-2 employees who would like to tackle this problem with an AI tool. Give them 2 hours and permission to experiment.

In 30 days: Evaluate. What have you learned - about the problem and about your culture?


Two ways to make faster progress

For managers: The AI Kickstarter gives you the basics in compact form to start and manage AI initiatives in your company.

For intrapreneurs: The Maker sprint takes you from problem to working prototype in just a few weeks - with guidance and a clear framework.


🎬 Video: Secure speed for SMEs

Are you ready?

We are glad you asked! Schedule an appointment with us directly to begin this important first step of the innovation process - the needs analysis. We look forward to working with you to overcome the challenges and drive digital innovation in your business.

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