Further to my recent post on how “EBITDA killed innovation”, I thought I would do a post on how small innovations can still occur in big companies – and sometimes that’s all it takes to make a big difference: a small innovation.
Companies are increasingly being encouraged to ‘think entrepreneurially’ – looking at how they can harness the entrepreneurial side of their workers to make a difference at the corporate level. It’s sometimes called “intrapreneurship” – but it can be very difficult to effect change within a large, multinational organisation where each decision needs to be approved by ten tiers of management. Big companies that span the globe, with tens of thousands, if not hundreds of thousands, of employees struggle to act with the agility and speed that entrepreneurship requires. An employee could have a fantastic idea, it could be supported by all of management, but bureaucracy and red tape get in the way – and the idea wilts eventually.
Some companies, such as Lockheed Martin, have tried to recreate the small team type entrepreneurial approach by having dedicated teams focused on developing revolutionary new ideas – and perhaps this separation between the bloated corporate company and the individual teams is what is needed – maybe entrepreneurship cannot be scaled across hundreds of thousands of employees.
The other issue with large companies is that in order to get large, they have probably been around a long time. And if they have been around a long time, then they have spent many years doing things a certain way, or developing processes and procedures to manage each activity. This is not an enabler when it comes to innovation – this is trying to build something new with old tools and old thinking. It’s rarely possible.
An innovative way of thinking is being employed by larger companies, who are inevitably seeing the benefits that innovation brings to smaller, agile companies – PWC for instance runs competitions where staff compete to come up with innovative new ideas and products. This relies on gamification to take the emphasis away from being ordered by a manager to create new products, and further towards a system where employees come together of their own accord to try and ‘win’ – and that win is a win for bother the employee and the company alike.
And maybe we have reached the reason why innovation fails in big companies. Because in smaller companies, innovation is usually borne out of the enthusiasm of the staff who are self-motivated to come up with ideas and new solutions. Maybe innovation cannot be summoned, ordered or demanded.
Forbes cites Tesla, Salesforce.com and Amazon.com in its top ten most innovative companies’ list.
Tesla is known as a disruptor – and its innovative approach is down to the fact that it has always operated in a different way to the rest of the industry. Whilst its competitors were chasing cheaper manufacturing methods, Tesla focused on the high-end – outperforming other manufacturers and focusing on developing better power systems. Its innovation was on where to focus, rather than purely developing new products. The innovation spectrum is wide, and companies of all sizes are trying to introduce small innovations into their operations in a bid to stay relevant, fresh and, most importantly, in business.
Some corporations are now launching ‘entrepreneur in residence’ programs – hoping that the entrepreneur will advise them on new directions and provide much-needed inspiration amongst existing staff. The bi-product of such programs is that they probably create more motivation for the staff – making it a more exciting and interesting place to work.
But we are now focusing on making the employees innovative. What about those leading the company. McKinsey reckons that aspirations are critical for a company, and have the power to be a “compelling catalyst” – so company leaders need to think about how they inspire their workforce, their clients and also the wider industry. Innovative people go to work at Google, because Google put out messaging that they are a future-thinking, anything-is-possible organisation. Innovation begets innovation.
So how can we start making those small innovations, whilst working for big companies?
Here are a few ideas I have had:
- Use the right words: Make sure that your words, whether you are a company leader or a member of staff, are encouraging opportunity. Negative handling of employee ideas will unfortunately discourage others from coming forward with opportunities.
- One eye on the future: Think about innovation as you would a sales pipeline – there are innovations to focus on now, innovations for the near future and grand ideas about the distant future. What’s around the corner, what’s coming in ten years’ time and how can you make steps now to put in place the foundations for innovation in the future?
- Make an effort to be close to innovation: Partner with innovative companies, sell to innovative clients and get close to them, choose staff who have worked for innovative companies previously – get as close as you can to innovation. There are lots of ways – think about all of your business connections across your entire organisation. Turn the innovation scale up by just 10%.
- Don’t let targets get in the way: Like my EBITDA Innovation article, targets are important but if you’re not in business in five years’ time then those targets will have been in vain. Have a target for innovation – an idea today might be your revenue tomorrow.
Here is a Ted talk I’d recommend you watch about “Where good ideas come from” and how we can harness innovation in our daily lives, and also in business: