I am always amazed at how most of big firms can be ineffective when it comes to innovation. During the past years, much companies seem to have created departments dedicated to innovation to cope with an aggressive competition from smaller companies. Unfortunately, most of these departments seem to end up simply doing bench marking smaller companies and acquiring them when it makes sense.
Here are 3 main reasons why start-ups are way more effective at innovation :
1) Versatile teams :
In startups, there is no place for a “that’s not part of my job” attitude. A small team means people need to wear several hats during the same day. This versatility enables people to have a wider vision about the company and hence, be more critical about what they do. To be able to wear several hats will also enable people to understand more about the whole value chain of your product/service. When people do understand perfectly about what people near them are doing, great teamwork happens and innovation too.
2) Horizontal management :
A small team means there is no space for bureaucracy. Good ideas can be exchanged and even tried in a matter of hours when it would take months in big firms. This is something I really enjoy when working in small businesses : everything moves fast and common sense is usually the main driver. I do believe that there can be only one driving wheel in a car, however, it is great to have a team who questions your work and your decisions. Countless times, I took wrong decisions and after arguing with my team, I changed my mind and took the right direction. It’s actually hard because you have to put your ego in your pocket in such times, but in a startup, it’s better to hurt your ego than crashing your business. In big firms, common sense often lose ground to politics.
3) Startups actually know the customer :
In my teams, I always try to make the engineers be as close as possible to the final users. Usually, a lot of magic happens here : great engineers will be empowered by negative and positive feedback. This is where “work” can become “mission”.
A lot of great technological ideas will come up when your engineers truly understand who are your users and what they really want. This is something rarely happens in big firms as customer feedback (if there’s any) goes through many layers in the corporation, with the deformation/filtering that it implies.
That said, being a big firm doesn’t mean you can’t behave like a startup: Apple Keeps Winning Because It Is A Giant Startup.