Why big companies can’t be innovative
Tech startups are innovative because they are founded by engineers, who are generally science minded people; tinkerers who like to experiment and see what works. This also characterizes the process of innovation, which is much simpler, less mysterious, and way more boring than all the ted talks and silicon valley buzz words make it out to be. It’s nothing more than: test-launch-iterate. Or guess-experiment-retry. Or whatever words that mean the same thing. Put another way: innovation happens by applying the scientific method to business stuff. That’s. Literally. It.
But if it’s that easy, why’s it so hard? And why, despite all the ted talks, all the books written by engineers at Google, the dozens of McKinsey consultants hired, the famous behavioral economist who plays golf with the CMO consulted, the inspiring guest speaker at the company conference who writes a blog on innovation (hint hint) — how can people NOT GRASP SUCH A SIMPLE THING? Why is it so hard for companies to innovate if all it boils down to is a process we learned in 6th grade??
While the process is simple and straightforward, the mindset it requires is hard. You are experimenting and testing to find out what’s right; not to confirm that you are right. That demands a high tolerance for ambiguity, an embrace of uncertainty, and an openness to being wrong. Without these serving as the psychological backdrop, innovation is just not possible. And it’s not possible at big companies for one reason: EGO.
Big egos are threatened by uncertainty, ambiguity, and unpredictability. Egos retaliate against such threats by seeking control, power, and mitigating unknowns. Egos cannot tolerate being wrong, and when they are in charge, they cultivate black hole work environments where creative people go to have their souls crushed for eternity.
Everyone has an ego to some extent. Ego isn’t a problem for big companies in the absolute sense. It’s only a problem, theoretically, if people with big egos were promoted more easily, more often, and given a disproportionate amount of power in an organization. Ruh roh.
Why Egos Reign at Big Companies
Compared to a small start up, big companies have lots of people around, doing lots of different things, making it harder to draw clear lines between the work people do and its impact on the business. High performance is harder to detect and low performance is easier to cover up.
In this absence of clarity, the visibility of your work becomes the proxy for good performance. So if you are skilled at making yourself visible, if you enjoy talking endlessly about all the visible work you’re doing, regardless of whether it makes any sense for the business, and at the expense of ya know, doing actual work, chances are you’ll be promoted. A lot.
And because promotions usually come with escalating amounts of power and control, they attract egos like moths to a flame. Highly competent people without ego are almost impossible to detect at scale when using the standard corporate hierarchy because it’s a system that’s biased toward selecting qualities that are egocentric in nature (even though they conflict with the best interests of the business).
Companies seem to be utterly incapable of finding competent people with smaller egos and giving them positions of power and leadership. But they also seem incapable of doing something seemingly more simple: giving employees adequate, protected escalation paths for exposing narcissistic, power mongering ego-maniacs. Trying to expose a narcissist or overly-controlling manager is career suicide. It requires you to subvert the power and authority of the very person who decides your performance, rewards, and whether or not you get promoted.
The disproportionate amount of power among high-ego leaders, along with the absence of meaningful ways to identify and neutralize them, create work environments which make innovation impossible. If more leaders were willing to relinquish some control by allowing a transparent feedback loop and meaningful avenues for employee recourse, it would at least help in restoring a balance of power, dramatically improving morale and chance for innovation and creativity to thrive. Getting systems like this implemented however, require a willingness of management to release a degree of power and control, which is obviously hard to do with people who get anxious and fearful at the idea of giving up power and control.
Until ego isn’t the driving force in your company, you can’t be innovative. So can we pretty please stop talking about it now? Unless of course you’d like to hire me to give a speech on it at your next conference, in which case, I think talking about this stuff is CRUCIALLY important and look forward to your call.