Why it’s a big myth that big companies can’t innovate

Today, many will have you believe that innovation is synonymous with nimble little startups - and that established corporations are no longer able to compete.

The ‘big is bad’ narrative is powerful as it’s provocative (keeping consultants, intrapraneurs and digital ninjas in business). But the idea that big, established companies can’t see the future or come up with new ideas simply isn’t true.

Kodak constructed the first modern digital SLR camera. LoveFilm had already built LoveFilm.com before Netflix launched. Sony invented a digital Walkman well before the release of the iPod. Xerox invented the world’s first ‘windows-and-mouse’ interface for personal computers. Nokia invented the first smartphone in 1996, and built a prototype of a touch-screen, Internet-enabled phone at the end of the nineties.

What held these companies back was not their lack of creativity or ability to see the future. Instead, it was their inability to reorganise themselves around innovations. This organisational challenge has been dubbed by economists as ‘architectural innovation’ as it demands that organisations remake themselves in service of new ideas. But how many big companies want to do that?

As Joshua Gans (economist at the Rotman School of Management in Toronto and author of The Disruption Dilemma) noted in the Financial Times: “Kodak and Blockbuster weren’t caught by surprise. They knew what the future looked like. They didn’t know later than everybody else, they knew ahead of everybody else.” They knew; but they couldn’t organise around the new.

You don’t need a maverick asshole

When you say the word ‘innovator’, the mind’s eye often pictures infamous, larger-than-life Silicon Valley characters like Elon Musk, Steve Jobs or Travis Kalanick who have variously garnered reputations for being difficult, erratic and even physically aggressive (assholes, to use the technical term).

But the truth is that, to succeed in the long-term, innovators need to be diplomats and salesman, not ‘disruptive’ mavericks. This is because large organisations can very easily block new ideas simply through inertia. So, to make innovation happen requires lots of goodwill, faith, support and the winning of hearts and minds. To deliver an ‘architectural innovation’ you have to overcome asshole behaviours, not promote them.

For example, Tony Ageh, formerly of the BBC, helped to push the iPlayer project through no fewer than 84 internal meetings before it was approved. Awarded an OBE in 2015 for services to digital media, Ageh said of his battles to push iPlayer through:

“There’s no shortage of ideas at the BBC but it’s about whether that idea survives the BBC’s power testing of ideas. I am good at making ideas survive that process, which means they survive the outside world.”

It’s not about ‘failing fast’

If you’re a Head of Innovation or Customer Experience, you’ll know that failure has become fashionable. Fail fast, fail often, fail better, fail forward.

In their desire to ‘embrace failure’ (or at least sit next to it), many companies set up in-house Labs. Failure is tolerated in this scenario as it sits at the outer edges of the company’s day-to-day. The corporate Innovation Lab has therefore become a place of experimentation without vision, targets or goals. Thus, a visit to the Lab has meant a trip to ‘Fantasy Island’.

But fetishing failure is foolish. As Rob Asghar, author of Leadership Is Hell: How to Manage Well and Escape with Your Soul says:

“No one should ever set out to fail. The key, really, shouldn't be to embrace failure, but to embrace resilience and the ability to bounce back. And the goal shouldn't be to glorify mistakes and errors and catastrophes, but to cultivate the ability to adapt and learn from them.”

Let’s learn fast, not fail fast

The above examples demonstrate that the received wisdom that big companies can’t innovate is an unhelpful myth. Instead of celebrating asshole behaviours and attempting to ‘move fast and break things’ (as they no longer say at Facebook), it’s our hope that big companies focus on learning fast, rather than failing fast.