For long, innovative and new products are associated with entrepreneurs who pursue their passion and succeed. Many think that large companies get caught up in their routine operations and are not good sources of innovative solutions.
In fact, large companies have a few advantages over their start-up counterparts to create innovation. Scott Anthony published an article to “…call to arms for corporate innovators to seize the opportunities that only a big company can realize” (http://blogs.hbr.org/anthony/2012/09/how_big_companies_can_save_inn.html?awid=6166991183274468738-3271). Scott discusses three questions companies should be asking themselves to remain active in the innovation playground. In addition to asking these questions, companies should leverage the strengths that only large companies have:
1. Access to resources
Large companies have the most important resource for innovation: cash. Many entrepreneurial activities never come to fruition because of cash-flow issues. This is less of an issue in a large organization, where mature financial management is the norm.
Large companies have people, tools, facilities and partners that are difficult for start-ups to establish. In addition, international networks of large organizations enable them to quickly and effectively assess the value of their innovations, which again is a luxury for entrepreneurs.
Finally, large companies can get the attention of distribution channels much more easily than a start-up can.
2. Established brand
Think of the difference between Google introducing a social interaction medium versus a No-Name start-up doing the same. Even if Google+ is not much of a success so far, it still has attracted a number of users, who are trying it only because it is from Google. On the other hand, we have never heard of many Facebook-like tools being created by start-ups.
A large company can put its existing brand power behind a new product or service it is introducing. An established brand does not make a sloppy product successful but it certainly ensures that the new product gets some much needed air time with potential customers.
3. Talent acquisition
I recently worked with a client, which was struggling to attract talent to a new business they wanted to introduce. While the client had a viable product, they were having difficulty convincing top-talent join their ranks because the company was not known as a development company. In contrast, IBM, for example, would have no difficulty attracting the top talent for new business ideas they are working on.
4. Create and maintain momentum
Large organizations can dedicate resources to new development while start-up entrepreneurs struggle with basic needs of life. For example, an aspiring entrepreneur I know had to pause pursuing his passion in commercializing a medical device in order to focus on making some money to be able to pay his mortgage and put food on the table. By the time he secures sufficient savings to go back to his passion, he will have lost his momentum. In the worst-case scenario, he may even lose all his progress if a competitor beats him to market.
In closing, I echo Scott’s appeal to large organizations. There is tremendous opportunity to take the center-stage in innovation by learning from successful entrepreneurial practices and executing them in large organizations by leveraging above strengths.
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