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Is your company too big to innovate?

Those of us who have worked for one know that innovation is easier in a startup. But does company growth always mean an end to that innovation?

There's a new term going around business circles. It's called corporate sclerosis. It means a hardening of corporate bureaucracy and a slower pace of work and resulting output. As long as we're using this unfortunate medical terminology, I guess I'll chime in and say that the first casualty of this condition is the ability to innovate. You can try, but the processes and procedures necessary to run a large company can hinder the very act of innovation.

For those of us who have worked for a startup, this is fairly frustrating. In a startup, where the entrepreneurial spirit is high, employee ideas are not only appreciated but they can be carried out fairly efficiently. In larger companies, it can be harder to get things out the door.

Is corporate sclerosis unavoidable? Even companies that thrive on innovation, like Google, have been losing employees to more "flexible" companies, like Facebook, that are still very innovative. (According to résumés posted on LinkedIn, 142 of Facebook's 1,700 employees came from Google.)

Even Google's 20 percent time (letting employees work on their own projects) is losing some of its punch. According to a New York Times piece, Google engineers say they've been encouraged to build fewer new products and focus on building improvements to existing ones, like the terrain layer on Google Maps. And that makes sense. Innovation is great but at some point you have to have the personnel there to make sure the innovations happen and to keep them running smoothly.

So the question is, can innovation exist in large companies? Or is there inevitably a point where a company outgrows its flexibility?

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

17 comments
sme1762
sme1762

I work in a public organisation that is large and heavily governed by public policy, regulation and legislation. Operations has succeeded in bringing an innovative culture that works. Operations support however has significantly been overcome by this corporate sclerosis, heavily restrained by tight budgets and an uncertain future. In another term, a holding pattern until another election. Any suggestions?

AnsuGisalas
AnsuGisalas

People like to know where they are, where they're going, who decides. Put people together in a huge 3D matrix, and this trend will only strengthen, they'll seek to dampen fluctuations in order to keep up a sense of stability. That always leads in a least-common-denominator direction. By giving thought to how they're organized, one can create a feeling of stability, thus pre-empting their need to waste energy stabilizing their surroundings. Two benefits: More energy going to work, and less blocked innovation.

nrei
nrei

I once worked for a large company that wanted employees to come up with new ideas. But they said not to be discouraged if your ideas were not immediately picked up on. They likened the company to a dinosaur in this way: if you punch it in the nose, three years later the tail wags. Innovating is one thing. But the instant gratification of seeing your ideas in production is another.

jmarkovic32
jmarkovic32

Risk is almost a necessity with a startup. However, with a large company, it's easier to settle in a comfort zone and not think about tomorrow.

seanferd
seanferd

If everyone is "innovating" and no one is finishing the darn project and making something of it, what is the point of innovation? I find the Google example to be a little strange that way. Makes Google engineers sound like a bunch of whiners who don't want to do any actual engineering, if this is why they are leaving Google. How many people can you possibly pay to come up with ideas and start projects (that mostly seem to stay in beta, anyway) without finishing execution? How is that even innovation? If you are mostly an "ideas person", I suppose it makes sense to move on. A lot. Or go entrepreneurial. These are the types that probably get bored if the innovation with which they are involved isn't "different" enough. But, oh my, there are some businesses (or whole industries) which cannot seem to innovate their way out of a wet paper bag, and must have their antiquated business models propped up by legislation and lawsuits. Those really are the ones which are too big, or too old (really, too stuck in a rut, dreaming of the good old days) to innovate. Sometimes, I suspect, being too big to innovate means being really conservative to please the board and the investors. Sometimes the corporate culture stagnates that way. And sometimes corporations never had an innovative bone in their bodies to begin with.

ganesank123
ganesank123

yes correct, we need to innovate new ideas.

santeewelding
santeewelding

See how it works for the entire of humanity without the wheels falling off.

hkliesner
hkliesner

A company that settles into a comfortable zone and fails to innovate will surely die. I work for a large company that was far too comfortable for far too long, nearly died and is now emphasizing innovation in a variety of ways - not only new products but new ways of doing business entirely. That said, we have some antiquated IT systems that slow down our ability to implement wide-scale changes, and we do a lot of small market testing before we roll things out to larger markets. A lot of concepts never make it past the beta stage. But I have hope for our company because they have recognized that they must innovate or they will be irrelevant.

Steve__Jobs
Steve__Jobs

I observe that when the innovaters become outranked and outnumbered by the fast talkers and bureaucrats, stagnation sets in. Conservatism, politics and nepotism then become tools to hide a lack of imagination, vision or ability. This is the classic peacetime vs war-footing officer corps. 25 years of working in different companies only serves to confirm this hypothesis.

nrei
nrei

Does anyone really innovate OLD ideas??

NickNielsen
NickNielsen

since Ugg discovered fire. Can't even get the wheels on, much less keep them from falling off.

sysabod
sysabod

Is what you wrote true ? I have seen or heard of what you wrote in my place, but i am not certion that those things happen in America too.

santeewelding
santeewelding

There are times -- this is one of them -- when you supersede me.

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