There is this persistent myth that large organizations cannot innovate, that they can be overthrown from their market position from one day to another by a little player. There is this illusion that innovation can only be accomplished by a small team in a garage. Michael Dell, founder of Dell Computers started his company so; he launched his concept to sell directly to customers competitively priced computers built according to the client specifications.
It is true that large companies can suffer from a few downsides when trying to innovate. They might suffer from standard operating procedure overload and cemented routines putting them on a hard track without lateral thinking. Staff specialization is another drawback stifling creativity as the employees have narrower fields of exploration and expertise.
People in large organizations also face communication issues. On one hand they experience information compartmentalization due to the virtual silos created by administrative divisions, departments, groups, or teams. As a result knowledge has problem to flow through strata of the enterprise.
On the other hand, memos, meetings, or emails coming from all parts of the company are submerging the employees with information unfortunately filtered and sanitized through several layers of formal approvals.
Although large organizations can be victims of the aforementioned traits, Apple, Google, Amazon, or IBM, to name a few, show that they can also benefit from their size to enjoy tremendous advantages when talking about innovation.
To start with, these large companies have not reached their size by luck. Over time, they have accumulated a good understanding of the market and the regulations, they have established trusted partners, they are good at what they are doing, and thanks to their long experience they have built a significant customer base.
This can be transformed into a very large network of innovative resources: the partners, the customers, and their sizable internal staff can be turned into as many sources for new ideas, as many sounding boards for new initiatives, and as many testing groups for feedbacks along the product or service development cycle. This broad audience is not only rich in terms of size, but also very valuable in terms of expertize range; a substantial key success driver to think out of the box.
Beside the advantages brought by these external and internal people, the large organizations can boost their innovative capabilities thanks to their financial resources. A sizable enterprise can indeed invest more money for creating and experimenting new products and services. They also have stronger resilience to failure. Whereas the lack of success for innovation project can bring down a small enterprise, such a failure will not affect so significantly a large company. As failures being one the key success factors to learn and innovate, these deeper financial resources can be directly correlated to innovation potential of the company.
Enhancement of the innovation capabilities
Thanks to the features available through enterprise 2.0 technologies, these large organizations can reduce some of the drawbacks related to their size, and improve some of their advantages.
Although an ideation platform is not the panacea to innovate, such a system can break the information silos stifling the communication by adding informal channels based on social media layers. An ideation platform is also proved very effective and efficient to tap into the collective wisdom of the business partners, the customer base, and the internal staff. Thanks to the web, submission of ideas and collaboration around the best ones is not limited anymore by the size of the meeting room. The number of contributors can be potentially be in the thousand range.
The size factor of large organizations can hinder their innovation capabilities because process rigidity and communication overload. On the other hand their size can be turned into an advantage if they reach out to their business partners, their clients, and the internal staff for new ideas. Their deeper financial resources also help them to invest more in innovation initiatives, and to better resist to the downfalls, should some of these initiatives fail.
Having an ideation platform can be a mean to reduce the size drawbacks, and to further leverage the related advantages.
Never miss an update by following us and subscribing to our monthly newsletter!