the
innovative LEDGER
An e-Newsletter from The Innovative Edge™ Inc.
Vol.
6, No. 5 - May 2006
* * * * * * * * * * * * * * * * * * * *
Sizing
Up Corporate Innovation
By Jeff Govendo
Last
month BusinessWeek came out with its list of “The World’s
25 Most Innovative Companies,” the result of a study it did with
the Boston Consulting Group. The list included companies from all
sectors of the economy: high tech (Apple, IBM, Microsoft), automotive
(Toyota, BMW), retail (IKEA, Target), e-commerce (Amazon, eBay), consumer
products (P&G) and others. In all, not a surprising list, as most
are highly successful companies we’ve come to admire (or at least,
have mixed feelings about).
But
here’s what jumped out at me: they’re all BIG! Except
for the innovation design firm IDEO (which, although not that large
itself, consults to many of the big companies), they are all well-established,
multi-national, revenue-in-the-billions corporations, the very
size of which, conventional wisdom used to tell us, precluded their
being nimble or flexible enough to be innovative.
How
do they do it? So many layers of management, all those reporting relationships,
so many past successes to look fondly and fall back upon…
In
reading the article, five themes emerged on how these companies have
managed to continuously innovate, in spite of their size:
1.
They take risks. Large corporations are legendary for risk-aversion.
If you can’t see the results on the bottom line at the end of
the quarter, don’t do it. But where time to market was cited
as the number one obstacle to innovation, these companies recognize
that moving forward without the certainty of a quick payoff (or a
payoff at all) is the only way to stay ahead.
2. They measure, but don’t over-measure. The course and
ultimate success of an innovation can be hard to track. Too many metrics
may cloud the picture or encourage short-term assessments where a
longer view is needed.
3. They spearhead innovation from the top downward, or center outward.
This seems to fly in the face of the popular notion that de-centralization
makes for more responsiveness and agility in a large company. But
this is not the old command & control we’re talking about.
Rather, it’s an understanding that for all parts to work quickly
and efficiently together, the impetus and guidance for innovation
initiatives must start at the highest levels of leadership, with far
more than just lip service. They lead this way because they believe.
4. They shorten or re-route reporting lines, and create places
for key players to come together and communicate directly. They
understand that diversity of background, perspective and expertise,
properly managed, results in more exciting ideas.
5. They get ideas from outside. As much as they value the expertise
of their own employees, they understand that different perspectives
can be gained from customers, suppliers, competitors and others outside
the walls. So they get out there and observe, they ask questions,
and get fresh ideas on a routine basis.
So
now that we’ve covered large corporations, what about that huge
segment of small to mid-size companies? Can they, too, engage in the
kinds of behaviors that keep them on the innovative edge? Absolutely!
There is not one activity in the list above that cannot be practiced
effectively in an organization of a couple hundred to a few thousand
employees. In fact, several on the BusinessWeek list were
that size when most of us first heard of them. Their early commitment
to these innovative practices was a major factor in their growth and
success.
No
company is too large or too small to benefit from these innovative
practices.
Where
innovation is concerned, it's leadership - not size - that matters.
