Scott Berkun

The myth of big orgs and innovation

The myths of innovation book is coming – a mere 4 weeks away – and I’ll be writing appetizers like this one until it’s out to tease, titillate and tempt you.

One great misnomer about innovation is that big organizations can’t do it. It’s a shame really, as there are many stories of great innovations done by big companies. We love the start-up stories, but there are many great invention tales connected to big, old, organizations.

In fact many of the greatest technological innovations of all time, landing on the moon (NASA), the creation of the first PC (Xerox), and the development of the Internet (DARPA) all took place inside of large organizations. Then of course there is the ENIAC (first PC), the first jet engines (RLM), and countless other inventions created by various large organizations throughout history.

Now I’m not saying innovation is easier in large companies (although occasionally it is) – I am saying that the size of an organization is rarely a deciding factor: it’s the organization’s attitude towards change that matters.

Here’s an example: If the CEO of SuperBig Inc. decides to pay $1mil to any employee who prototypes new product ideas, guess what he’ll have? Lots of hard working people willing to take risks with new ideas.

And by the same token, if the CEO of UltraLeanStartupCo Inc. yells at people for taking chances, and pays bonuses exclusively for complacent status-quo behavior, he’ll never see innovation no matter who he hires, or what books he reads.

Certainly SuperBig’s stockholders might wonder about their CEO’s sanity, but we’re talking innovation, not mental health.

One hypothesis is that innovation hinges on two things:

1. Willingness to take risks
2. Commitment to hard work

And both are hard to achieve in any sized organization. Talent, resources, and luck are irrelevant if no one is taking chances (#1) and working hard to make them pay off (#2). I certainly like talent and luck, but innovation can happen without them.

Sure, there are a thousand caveats – I concede that risk aversion is rampant in many big organizations – but the point generally stands: size is not a primary factor in the ability to find/follow new ideas – it’s the strategy and behavior of the leaders that matters much more. There are enough examples of innovations by big organizations to render size a less important variable than is commonly believed.

So instead of lamenting “my company is so big it never innovates” – a more accurate complaint is “my boss’s strategy doesn’t reward people with new ideas”.