Being A Large Enterprise Doesn’t Make You Less Creative

Large Enterprises Can Innovate Too

Recently, I’ve read a number of articles about how bigger companies tend to get less innovative as they grow – smaller startups with fewer people tend to be more innovative. Why is this? In my opinion, it has nothing to do with the size of the company – we all know that innovation doesn’t come from the corporation, it comes from the people within that company.

And the people within the large enterprise are as innovative as ever. No, the real reason why larger, and also more well-established companies seem to be less innovative it that their output of innovative products either declines or the innovation is restricted to incremental innovation on the company’s existing products. The reason for this: they tend to focus on shorter-term, revenue generating opportunities only.

Even companies like Apple, typically considered innovative, fall into this trap. I’ve reported before that something that many feel is innovative, like the Apple Watch, is all that innovative. The Apple Watch is not innovative in design (it simply looks like a smaller, square iPhone) or in functionality (it needs a connection to a phone to operate, the battery life is not particularity good, and it has no more features than a Pebble watch or a Fitbit can provide). The only thing that is innovative about it is that it is the first wearable from Apple – not sure that’s something that we can consider innovation.

So, let’s say that the large enterprise appears less innovative because its output of innovative products decreases – it has a steady flow of income from its current operations and senior management and shareholders are very happy with those results. So why innovate? Even if your employees can envision great new products and services which may (or may not) bring in new customers and revenues, why take the chance? Why dedicate resources to projects which may or may not be successful – just focus on what works – or in this case – what drives revenue?

So you have a company full of very innovative people, who are maybe allowed to provide some incremental product innovation to the current product line, but when it comes to breakthrough new products, management either ignores it (by not providing employees with an outlet for those ideas) or even worse, gives them an outlet for those ideas (by say running a nominal innovation program or even something as simple as a suggestion box) but then proceeds to do nothing with the ideas.

Eventually, these innovators within the large enterprise, when they are not nurtured and listened to, leave to head to either your competitors or to found your competition. But you say – we have to protect the bottom line – we can’t go off and develop every possible idea that our employees come up with. We aren’t Google.

I think we can safely say that Google is so profitable that they can spend money on more innovative projects which may or may not provide a near-term return. But like you say – you aren’t Google – but your people are just as, if not more, innovative. How can you balance your people’s ideas with the fact that you need those resources to run the company, and keep your senior management and shareholders happy? Even though you may have more revenues than the startup – you don’t want to risk those revenues for unproven new products.

Luckily, the days where it cost a lot to develop new product ideas into real products are behind us. With the advent of modern software development tools and frameworks in the software space and 3D printing in the hardware space, the ability to prototype new products takes a lot less time and money.

So how do you stay creative as you get bigger and bigger? Make sure that you have a healthy innovation pipeline which not only gathers and rates ideas from your employees, but also provides a facility to take those idea to prototype and eventually product. Whether you do it yourself or hire an innovation consulting firm like helloFUTURE, you can compete with Google on innovation, with a much lower impact on your operating resources.