Comments on: The myth of big orgs and innovation http://www.scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/ Management and Creative Thinking Sat, 13 Mar 2010 03:45:59 -0800 http://wordpress.org/?v=2.9.2 hourly 1 By: Michael Schulze http://www.scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/comment-page-1/#comment-124849 Michael Schulze Sat, 28 Apr 2007 18:47:45 +0000 http://scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/#comment-124849 I believe that both large and startup firms have the power to innovate. If you take large firms like GE or 3M who are known for their strong efforts towards creating an innovative climate you are definitely right. But other examples show that it is often the lack of resources of small firms that make them innovative. Finding new ways for doing things seems to be more important to small companies. Furthermore history tells us that many startups are the result of unsatisfied emplyees. SAP R3 for example coud have been an IBM product, to name only one. The boss`s strategy often doesn`t reward new ideas because he has to consider sunk costs resulting from former investments, a problem seldom found in startup firms. Therefore large firms usually innovate in much smaller steps, following a less radical path. From this point of view risk aversion is strongly related to size. Another point is entrepreneurial behaviour which is seldom tollerated in lage firms but which is in my opinion a very important lever in the innovation game. The concept of intrapreneuring which is supposed to overcome these boundaries shows that they are quite aware of this. At least some are! Companies like google may teach us that innovativeness is not a matter of size but a matter of generations in charge. My best regards, Michael I believe that both large and startup firms have the power to innovate.
If you take large firms like GE or 3M who are known for their strong efforts towards creating an innovative climate you are definitely right.
But other examples show that it is often the lack of resources of small firms that make them innovative.
Finding new ways for doing things seems to be more important to small companies.
Furthermore history tells us that many startups are the result of unsatisfied emplyees.
SAP R3 for example coud have been an IBM product, to name only one.
The boss`s strategy often doesn`t reward new ideas because he has to consider sunk costs resulting from former investments,
a problem seldom found in startup firms. Therefore large firms usually innovate in much smaller steps, following a less radical path.
From this point of view risk aversion is strongly related to size.
Another point is entrepreneurial behaviour which is seldom tollerated in lage firms but which is in my opinion
a very important lever in the innovation game. The concept of intrapreneuring which is supposed to overcome these boundaries shows
that they are quite aware of this.
At least some are! Companies like google may teach us that innovativeness is not a matter of size but a matter of generations in charge.

My best regards,
Michael

]]> By: Are you Innovative? « Messaging….. Technology…… Life….. http://www.scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/comment-page-1/#comment-119535 Are you Innovative? « Messaging….. Technology…… Life….. Fri, 20 Apr 2007 17:20:09 +0000 http://scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/#comment-119535 [...] has a post up regarding large companies and innovation….most people like to bash the large companies like MS, IBM, etc and say they can’t [...] [...] has a post up regarding large companies and innovation….most people like to bash the large companies like MS, IBM, etc and say they can’t [...]

]]> By: Scott http://www.scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/comment-page-1/#comment-118701 Scott Tue, 17 Apr 2007 18:38:02 +0000 http://scottberkun.com/blog/2007/the-myth-of-big-orgs-and-innovation/#comment-118701 John P: On the surface it seems obvious that small companies would be bigger risk takers, but the more I've thought about it the more complicated it is. A small business owner has everything at stake - if they fail, they go under. We're biased by high profile tech sector start-ups, which are in an extreme class of risk taking and opportunity. Many (possibly most) small companies don't take on the same kinds of risks. But a team manager at a big corporation has much less to lose. Even if s/he fails he's unlikely to get fired and certainly won't lose his house because the project took the biggest risk. So again, I think the rough sketch of "small companies innovate more often than big" falls apart quickly . There are way too many counter examples in both directions. John P:

On the surface it seems obvious that small companies would be bigger risk takers, but the more I’ve thought about it the more complicated it is.

A small business owner has everything at stake – if they fail, they go under.

We’re biased by high profile tech sector start-ups, which are in an extreme class of risk taking and opportunity. Many (possibly most) small companies don’t take on the same kinds of risks.

But a team manager at a big corporation has much less to lose. Even if s/he fails he’s unlikely to get fired and certainly won’t lose his house because the project took the biggest risk.

So again, I think the rough sketch of “small companies innovate more often than big” falls apart quickly . There are way too many counter examples in both directions.

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