When it comes to being very innovative as an organization, we see more start-ups and less of big conglomerates on the scene.
The best spirit for innovation is the start up spirit. Start ups are curious and nimble. They are not afraid to embrace change or try doing different things. They can adapt faster, learn better and take quicker decisions.
Large organizations tend to be pretty much the opposite of the start ups. They are the elephants, that can’t dance. Moreover larger organizations often exist to defend their previous ideas and innovations rather than risk on new innovations. We know the story of Kodak and Nokia, just to prove this point.
Large organizations are risk averse. If something fails in larger organizations, they take a defensive position to save their failed products rather than move on to make newer ones. Large enterprises unlike start ups lack the power of creative destruction. They find it hard to cannibalize their own success.
It is the risk aversion that makes larger organizations not to bet on new ideas. Instead they prefer the path of acquisitions or being the fast follower as new concepts enter the competitive arena. The shareholders of large organizations do not want to play it risky. They want it safe -as safe as possible. They prefer linear and consistent growth against exponential growth. Often, the quantum leap innovations provide exponential growth but it demands immense risk. Therefore itis easier for smaller firms to take the plunge unlike their bigger counterparts.
The very reason whygreat innovations take place in university dorms and garages rather than big organizations is the fact that the startups are experimental by nature. Start ups are always willing to explore new learning curve till they get it right.
On the other hand large organization that keep the DNA of the start up has an upper hand on innovation. Steve Jobs himself always wanted to maintain the start up spirit of the Apple and he insisted on teams to be smaller in numbers. Speaking at the All Things Digital conference in 2010, Steve Jobs revealed a bit about Apple’s inner workings: “You know how many committees we have at Apple? Zero. We’re organized like a start-up. We’re the biggest start-up on the planet.”
You can find the similar spirit at Amazon as well as Jeff Bezos says “It’s Always Day 1 at Amazon”. This means that Amazon will always act like a startup.
Smaller organizations can often move faster on implementing innovative ideas because they have less bureaucracy. When Jack Welch was reengineering General Electric he said, “My goal is to get the small company’s soul and small company’s speed inside our big company.”
Many organizations that fosters innovation are now concerned about keeping the spirit of a start up while they may continue to grow as giants in their industry.