If you read the business press, you might believe that only start-ups can be innovative. Start-ups certainly have the advantage of agility, focus and speed. Without the burden of ongoing operations, customer relations, and Wall Street investors to manage, they can focus all of their attention on innovation.
Large companies can also be extraordinarily successful with innovation. Consider the continuous innovation from mature companies, such as Salesforce.com, 3M, Alexion Pharmaceuticals and Amazon.
Research with the Fortune 1000 shows that many large (and mid-sized) companies struggle with innovation, simply because their leaders do not embrace innovation and articulate a clear strategy for innovation.[i] I have worked for large, global corporations most of my career, and I know how difficult it can be to maintain a focus on innovation. Leaders are distracted by the demands of sales goals, developing the capabilities of their supply chain, strategic planning, hiring, motivating and leading employees, and of course, meeting the demanding expectations of Wall Street to improve quarter-over-quarter financial results and returns to shareholders.
Companies can be innovative by focusing on these steps:
Show executive Leadership. For larger companies, the first step to becoming innovative is for executives to embrace innovation, speak about it often (as often as they talk about sales, marketing, and financial goals), articulate a strategic direction for innovation, and invite employees to participate in the innovation journey.
Get out there! Many companies have a strong focus on cost cutting, internal operations, and retaining their positon in their domain. And, that is the problem. This insular thinking is a recipe for maintaining the status quo, rather than being relevant in the fast-changing business world. Consider long time thermostat maker, Honeywell, which was disrupted when Next came out with a round thermostat (which looks like Honeywell’s round, iconic thermostat) but is programmable from a cell phone. Honeywell insiders tell me that, despite all the hoopla around the internet of things, it never occurred to them that the public would want the convenience of changing their home temperature, as well as watching live streaming video from their home security cameras, through their cellphones. I have found that when engineers as well as marketers, get out and observe the customer experience, they come back with no shortage of ideas about how to improve products and services, or how to be disruptive. In addition, companies need to be constantly looking for the signals of future trends that can disrupt their markets.
Share. Don’t just acquire knowledge from customers, external experts, competitors, and think tanks and keep it to yourself, share it broadly! Many executives believe they need to hoard this knowledge, or share it with an elite few. This is a serious flaw for your company, if you want to pivot to being more innovative. Your employees and external partners have no shortage of innovative ideas. Sharing what you learn with employees will stimulate their innovation!
Invest in innovation. Companies need to invest in their innovation infrastructure – it often doesn’t cost a lot. Many executives immediately think of labs and capital equipment. Depending on your industry, that may be necessary. Also necessary is developing the new skills and innovative behaviors of your employees.
Support ideation, rapid experimentation, and knowledge management. The companies that have had long-term innovation success do all of the above. They have also learned to create trusting and transparent environments and collaborative cultures of innovation. Many Silicon Valley giants, for instance, have figured this out. They have retained the knowledge sharing and idea generation that they experienced as start-ups into their mature stage, as large corporations with ongoing operations. Their executives are serious about building collaborative cultures of innovation and minimizing hierarchy, silos and politics. Employees are still able to ask questions of the boss, directors, and even the CEO. Employees are rewarded for sharing their expertise and for building on the ideas of others, rather than destructively competing behind their backs. These companies have well regarded processes that enable employees to formally present their innovative ideas, get them reviewed by management, obtain funding, go through rapid well-defined experimentation (often with customers), collect analytics, and then stage gate their innovation to decide which ideas to move forward to commercialization and which to stop.
Mature, large companies can be innovative. In fact, they really have little choice. A strategy of the status quo is a sure recipe for being overtaken by a faster competitor or disruptor.
What has been your secret to innovation? Or, your stumbling block? Join the conversation.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults on talent management, leadership development and coaching, innovation, and other strategic initiatives. Please e-mail Victor at email@example.com or visitwww.victorhrconsultant.com. For innovation visit www.InnovationOne.US.