The challenges associated with innovating in large companies have been well documented. Typically explanations of these challenges reference the need for established organisations to focus on process efficiencies rather than disruptive innovations. Startups are much more focussed on finding product market fit, and then once you have it you are driven to maximise profit and revenue. However, this catch all explanation doesn’t explain why some large companies are more successful than others at innovating. It is simply not true that companies of over 500 people have been unable to bring successful innovations to market.
When large organisations get it right, they are able to harness the values and mentalities that are ingrained so deeply in early stage companies. The genius of these larger companies is to recognise that these mindsets are not absolutes in themselves, they are variable and can be adopted when it is strategically advantageous to do so.
Autonomy vs control
Whether it’s Clayton Christensen arguing that one needs completely autonomous business units in order to explore disruptive innovations, or Elon Musk’s mantra: “Don’t worry about the methods or if they’re unsound. Just get the job done,” autonomy has long been cited as a necessity for innovation. However, in most cases the need for autonomy is seen as a binary decision. If you start your own company, you decide exactly what to do, where to work, when to work and whose advice to listen to. When you work for a large company all of the above is dictated to you. This is insane. It shouldn’t be one or the other, but a combination of both.
When companies get it right, there is enough control to set frameworks and objectives, but enough autonomy for individuals to navigate difficulties that may come up. The solution could be even more simple than this, for a percentage of an employee’s time there could be complete autonomy, and for the rest it could be much more guided. Autonomy isn’t just about strategic direction either, it could be about letting people choose what devices to use — or what tools they download to execute the job.
The question for any large organisation is where and when employees are afforded autonomy. Sadly in many cases the default is nowhere — a sure fire way to squash innovation across the business.
External Accountability vs Internal Accountability
Another area where startups are often celebrated is in the relentless accountability that follows them wherever they go. Coupled with complete autonomy is the inevitability that you will be personally accountable for whatever decisions you make. Decide to create a product that no one wants? Well, you’ll know it as soon as your money or enthusiasm runs out.
Within large corporations it may be easier to hide — again this is well documented with the sort of vanity metrics often used to judge the performance of new products or innovations. Whether it’s number of likes or simply your boss’s approval, it is much easier to achieve internal approval than it is to venture outside.
This, too, need not be an absolute. In the most successfully inventive enterprises the success of an innovation is measured by external data rather than internal rubber stamps.
Necessity vs Process
When something needs to get done, startups are often stereotyped as doing it “by any means necessary.” Whether that is staying up into the early hours coding, or by pulling in whatever favours they can, necessity almost always trumps process. This approach is naturally disconcerting to large companies that develop process to mitigate the risk of something going wrong due to someone doing something our of urgency.
Yet this sense of urgency is something that, when harnessed, can be exceptionally powerful. Often it’s the inefficiency of process within companies that startups on the outside recognise and capitalise on. Think of this in the record business or taxi market. Process is undoubtedly essential for big business, but there is no reason there can’t be competing ways to do things — letting the old way die out to be replaced by the new. Whether one likes it or not employees will always have workarounds where the process is too slow, and it’s precisely in these instances where people should be able to celebrate and publicise these. Within a workaround is often the beginnings of a much more efficient process.
Salary vs Equity
Finally, one of the most fundamental absolutes is when it comes to renumeration. In a large organisation this will likely be done with a salary, and maybe a bonus. This means that the metric for success is inevitably internal. Unless you work on commission it will be your boss deciding on your bonus for a given year, based on their perception on how well everything has gone. In a startup, you will very likely own equity in the business which will have precisely zero value if you create something that no one wants, and potentially limitless value if you create something everyone wants. On top of this, if you’re lucky, you will probably also have a salary.
For a company to be truly innovative people within the organisation must feel that it is in their interests to suggest and follow through with new ideas. Just because you have a better way of doing things doesn’t mean you’ll give it to the company, yet in a startup there is a sense of shared ownership — you will do whatever you can to ensure that the venture succeeds. This is not, again, an absolute. Whether it’s a partnership model — or something more innovative — experimenting with new ways of rewarding people who bring innovation to the company is essential if you want to work somewhere that can harness the ingenuity of its people.
Where do you want to be?
These absolutes outlined above seem intrinsically linked with the type of organisation you work for — small and nimble or slow and lumbering. But this is merely the default, through demonstrated action this can be changed. You just have to move the slider an inch in the right direction.