Why Big Companies Can't Innovate?

Maxwell Wessel explains “Why Big Companies Can’t Innovate” in his September 2012 blog post on HBR Blog Network. In fact, Wessel articulates that big companies are designed to fail at innovation. I found there were three main criteria describing why big companies fail at innovation.

I would agree with Wessel’s analysis that differing success metrics between entrepreneurs and mature corporations provide the number one reason for failed innovation attempts in big corporations. In my research, I found several examples of real companies’ examples of both failed and successful innovation attempts.

Failed Innovation Attempts at Large Corporations

Most of the failed attempts summarized below failed due to a late-to-market approach to innovation and a lack of standardized and continuous improvement methods rather than a one-time fix. In all three cases, these companies were subject to the technological revolution of the internet and the ever-expanding product offerings available online.

Successful Innovation Attempts at Large Corporations

A common theme from successfully innovated companies is a financially supported innovation plan from the top-down. These corporations prioritize innovation and value the input of their employees, empowering innovation from within.

I read an interesting article on Fast Company called “4 Innovation Strategies From Big Companies That Act Like Startups” by Soren Kaplan (http://www.fastcodesign.com/1670960/4-innovation-strategies-from-big-companies-that-act-like-startups). Like Wessel, Kaplan suggests that successful corporations think like start-ups. This parallel illustrates the paradigm shift to entrepreneurial thinking for innovative success. The four strategies highlighted by Kaplan are summarized below.

Meet & Spuds

Meet & Spuds is a unique new dining experience providing quality cuts of meat and various preparations of potatoes in a relaxed, inviting, and social atmosphere. My business team is pursuing a restaurant (Meet & Spuds) aimed at providing young, single men with only the food they want to pay for in a setting that offers a chance to eat alongside new people each visit. No vegetables or desserts or fancy side dishes will be served only meat and potatoes are offered. In this way, we hope to attract young, single male (and female) guests to dine on meat and spuds, drink some great beer or spirits, and relax watching the game.

The persona I chose to explore is 26 year old Bill White. Bill is a full-time financial analyst working in the city. Bill is single and trying to save up money to buy a new car. Bill works from 9-5 each day downtime and then heads out to grab a beer with his coworkers or get dinner before heading home for the evening. He wishes that there was a place that was quick (not fast food) that offered an appropriate price tag. Bill often sacrifices big bucks to get a steak downtown but wants to start cutting his spending. Not only do these steakhouses charge big bucks, but the closed off restaurant setting makes Bill feel self-conscious about eating on his own and wishing he had other single diners around to eat his meal with.

Bill has tried various restaurants but found that those offering great meat also offer side dishes he is not interested in and cost too much. Bill is not willing to sacrifice his culinary desires but is looking to reduce his total restaurant spending. Bill is also looking for a dining setting where he feels included and social.

Lucky for Bill, Meet & Spuds is the perfect combination of value-pricing and quality food. This restaurant offers a ‘meet’-ing place for single diners to be paired into larger parties to eat together. Bill can reduce his overall spending and gain a great, new social environment where he can get some good food, too.