Billed as an “innovation smackdown,” this week’s innochat addressed the thorny topic of who innovates more: big companies or startups?
“Most people believe startups have an edge, but large companies have done well too,” said Gwen Ishmael (@Gwen_Ishmael) SVP Insights & Innovation at Decision Analyst Inc. in Texas, and this week’s chat moderator.
The framing post for this week’s discussion can be found here.
Ishmael’s first question to the assembled masses was: what innovation advantages, if any, big companies have?
“It’s really more about culture than size. There are innovative companies both small and large,” said Harvey Briggs (@OBX_Harvey), Director of Disruption for OBX Thinking in Wisconsin.
My own contribution was that large companies have the resources but not always the will to direct them towards innovation. Ishmael agreed. “Having isn’t using,” she said.
“Large companies have the muscle but smaller companies have nimbleness and agility,” said Raj Datta (@rdatta) in San Fransisco.
“Big companies have a resource advantage. But money, people, etc., can also make a company complacent and stifle thinking,” said Alicia Arnold (@alicarnold) in Boston.
Andrew Marshall (@drewCM), a principal at Primed Associates in New Jersey, agreed. Routinely one of innochat’s wittier contributors, he said, “Fat, dumb and happy does not an innovation powerhouse make.”
Jacoub Bondre (@jbondre) in Toronto said, “Only large companies that have R&D baked in to their structure can have an advantage, if valued and funded sufficiently.”
“Large companies can ‘easily’ create small skunkwords to add agility. Small companies have trouble adding resources,” Briggs said.
“Larger companies innovation advantage is resilience. They can take bigger risks and withstand bigger hits,” said Shelly Lucas at Hoovers’ (@Hoovers) in Austin, Tex.
However, Eric Shaver (@ericshaver) in Boise, Idaho, pointed out, “That’s true if the board, market, etc., allow them to take the hits.”
Referring to how a large firm can leverage resources, Joe Sanchez (@sanchezjb) in Washington, D.C. said it’s “kinda like cycling. Raising a bike’s seat .5cm can have a huge impact in terms of power delivered to the pedals.”
John Lewis (@JhnWLewis) in the UK agreed. “A large company’s advantage [is] if a significant improvement is generated, its impact can be much larger than for small companies.”
“Large companies can fail and still succeed. Small companies’ failure can kill the company,” Briggs said. Being tongue in cheek, Jose Baldaia in Portugal added, “Large companies have media and distribution systems that transform small victories in to big innovations.”
But size and comfort militates against innovation. “The will to act is critical and that is where the comfort of a larger enterprise can get in its way,” Marshall said. “The challenge for big companies are calcified processes and heavy infrastructure investments that must be monetized,” said Briggs.
Brenda Young (@4byoung) in Tampa, Fla., said, “It’s the failure to execute well even though they have advantages in resources — Nokia, Kodak, Motorola come to mind.” Those firms “may have talent, but a brittle way of doing things may not allow the talent to be harnessed,” Datta agreed.
“Companies tend to skew adaptive (and incremental) over time because they hire people who are good at operations,” noted Gregg Fraley (@greggfraley) a London-Michigan bi-located individual.
Looking at the comparison between large and small, Lewis wondered, “Is it like styles of mountaineering (which I do not do!): light/fast, but exposed to risk; or heavy/slow, but more resilient?”
“It’s never too late to take mountaineering up!” I told him.
Referring to crampons, the spiked shoes worn by mountain climbers, Marshall joked, “I have a new line of inno-crampons coming soon!”
“We can do anything … but we can’t do everything,” Lewis said.
Old advertising image of pig made available by the Boston Public Library on Flickr.