By Edwin Andrés Casallas Larrotta, Head of Business Development Colombia and Ecuador Wayra Hispanoamérica
In the late 1970s and 1980s the parable was made by Gazelles and elephantsThe method used by Professors Birch of the Massachusetts Institute of Technology and Belasco of the University of San Diego in their academic articles on entrepreneurship was the easiest way to express the realities of the business world at the time. Incredibly, this comparison is still valid after four decades. For now, the big company (the elephant) It is still managed by rigid, mostly hierarchical structures as well as bureaucratic processes that make it slow to change. on the other hand, the startup (the gazelle)presents an agile structure and processes that, together with their high risk tolerance, make the light light and minimize growth and scaling times. Belasco also affirms the need to keep the spirit of innovation alive in large companies, as stated in his book Teach the elephant to dance.
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In the following fable, Iñaki Ortega, for his part, expresses the reality that characterized the relationship between large and small companies for many years: “A young elephant who lived in the savannah observed with admiration the agility with which the light gazelle obstacles and even could dodge attacks by the dreaded lions. The acrobatic leaps of the gazelle resembled the steps of a ballroom dance enlivened by Chopin chords. The pachyderm decided to spend several weeks practicing twists and dance steps until one morning he eagerly suggested to the antelope that they dance together. The gazelle doubted that her friend’s five thousand pounds were only fifty too much of a difference compared to his, but the young elephant’s enthusiasm finally won her over. The two animals began to dance as if it were a waltz, and in the first round of the dance the elephant’s foot accidentally, but with the full force of its five tons, landed on the fragile pillar of the gazelle, which it was instantly killed crushed “.
In the past, companies took advantage of the benefits and sometimes ate Startups. Hence the call to elephants and gazelles to learn to dance without stepping on each other and refers to the fact that they must learn to work together to survive in a difficult and changing environment now known as the VUCA environment is (Fleeting, uncertainty, complexity and ambiguity).
At the moment, the big company (the elephant) is changing slowly. On the other hand, the startups (the Gazelle) are minimizing their growth and scaling times / Image: Depositphotos.com
A clear example of VUCA environment It was the pandemic triggered by COVID-19 (SARS-CoV-2) that reflects the volatility of the radical changes that have occurred in a very short period of time. The pandemic forced people and companies to use technology and became an accelerator of digital transformation by going back to about 5 year-months, the time that, under other conditions, digitization would have taken in Latin American companies. One of the fastest growing sectors in 2020 was the E-commerce, Latin America was the second best performing region in the world, second only to West Asia.
2021 is not far behind, as the latest PayU report shows, which highlights double-digit growth in total annual consumer spending in Latin America, outperforming other regions and making it the new world power of e-commerce.
The pandemic was a challenge for everyone, both gazelles and elephants had to adapt their business models and even their own products or services to the new reality, thus reflecting the natural adaptability of the animals, without which they would be threatened with extinction, like thousands upon thousands of corporations and small businesses around the world that failed to survive in this hostile environment where the elephant is no longer as strong and the gazelle is no longer so fragile. Just to be an order of magnitude, around 2.7 million formal businesses in Latin America closed in 2020 due to the pandemic, according to ECLAC.
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The collaboration for fragile but fast gazelles and strong but slow elephants could come from hippos, animals who, although aggressive, have proven collaborators and empathize with species other than their own, and gazelles on many occasions prior to the crocodile attacks rescue and share elephants and even warn of dangers when they want to cross the river. In this new parable, hippos represent support units as accelerators. Company builder, CVCs (Corporate venture capital) and venture capital funds, which are intended to be the communication bridge and mediation body between companies and companies Startups;; Just like Wayra, the business investment arm of Telefónica Movistar, whose main mission is to achieve that fit between Movistar and the Startupsand supports both the company’s digital transformation processes and those of its customers in the B2B and B2C portfolios.