Across every industry, innovation is the key to survival in today’s business world. Innovation has the potential to create and maintain a company’s competitive advantage by offering new products, services, and technologies. It can also identify new market opportunities and segments that others may have overlooked.

 

“Innovate or die” has been a common catch cry since the turn of the 21st century.

However, for large organisations, where predictability is key, being innovative is easier said than done. By their very nature, organisations rely on consistent structures and measurable processes to remain efficient whilst consistently solving the problems of their target market.

Many employees within large organisations are averse to change, and are content spending their time seeking efficiencies by leveraging existing assets and distribution channels. In addition, stakeholders prefer a predictable return on their investment rather than a risky endeavour.

Innovation is risk-taking, and the bigger the organisation, the higher the stakes.

Large organisations are more likely to make marginal improvements to old processes than replace them with newer systems. This leaves them vulnerable to competitors, who disrupt the market with new ideas, new momentum and new solutions.

So how does a large organisation harness the bright-eyed enthusiasm and hunger for success of a start-up business, whilst addressing the needs of existing customers and protecting their brand?

Kareem Tawansi, founder of Solentive Technology Group, believes that large organisations can in fact be innovative. He says it is important to understand the small business and large business mindset.

“In small businesses, a start-up can be agile and move fast until they have a customer base,” says Tawansi. “After that, things start to slow down – you can’t keep changing and making mistakes or you will lose customers. You then begin to develop processes.”

Tawansi says it is important to really understand who your customers are and what drives them, and ensure all decisions are made with these factors in mind. Referring to Everett Rogers’ Diffusion of Innovation Theory, Tawansi says there are five key categories of customers – innovators, early adopters, early majority, late majority and laggards.

In big business, employees have specialised roles, and the involvement of more people tends to slow down processes. However a higher, more consistent quality of work is maintained.

Tawansi believes for organisations keen to embrace innovation, they have two main choices.

“The best way for large organisations to innovate is to integrate start-ups within their own structure,” the CEO explains. “Give the small team a budget, some direction and a deadline and see what happens. Sandbox the start-up away from the rest of the organisation to give it a real chance to be agile.”

Separating the start-up from an established organisation prevents innovative ideas from being overshadowed by existing processes, or lost in the backlog of existing work. This means initiatives that benefit the organisation’s customers take a front seat.

“The second option,” says Tawansi, “is to outsource parts of the business to a smaller organisation that has the ability to innovate.”

Whilst there are many reasons innovation can be challenging for large organisations, the penalty for avoiding it altogether can be dire. Innovation is the task of creative, entrepreneurial individuals. Identify the innovation ‘champions’ in your organisation or outsource innovation to a smaller business to maintain your advantage in a highly competitive global market.

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