How large companies become as fast and innovative as start-ups
Start-ups are more innovative, faster and more flexible than large cooperations. This theory held its ground during the last years. Only very rarely also large cooperations prove that they can be young and dynamic. What is the reason therefore when it is clearly noticeable that innovative acting is inevitable to stay competitive?
Innovations in the digital segment, such as a new website or app, require from concept to launch on average 6–12 months in medium-sized enterprises and actually 12–18 months in cooperations.
Reasons for large cooperations’ sluggishness
Bureaucracy and too many management levels slow down the innovation process. Instead of having a personal talk, essays are sent per e-mail with endless cc-redirections back and forth in order to cover one’s back.
The absence of important employees due to illness brings projects to a partial standstill.
Example case for refusal of innovation
Blackberry dominated the market as smartphone pioneer until 2007. They rested on their success and enjoyed their roll. Nobody ever thought of a competitor taking their position.
Then in January 2007 the time had come. Steve Jobs (Apple) presented the first iPhone that scored with completely new functions. One could download music, surf the internet and scroll maps. Apple sold more than 1 million devices in the first three months.
At that time Blackberry was already so bureaucratic and saturated that they could not react anymore. They underestimated the iPhone and any counter-attacks were blocked internally by mutual recriminations. At that time many younger employees at Blackberry’s applied for new jobs with Apple, Samsung, LG and others.
Now, 9 years later, Apple is one of the most valuable companies in the word and Blackberry not much more than a footnote in history books.
Successful through transition of ideas
No start-up became successful by transforming the starting idea from theory into practice without further modification. Only with continuous adjustments to market, user feedback and intelligence success can set in.
At the beginning Youtube was a dating platform and Flickr started as an online role-play, Yelp was a service where friends could send each other recommendations. Suddenly users started to write experience reports about local shops and asked Yelp to make them accessible not only to their friends, but to everyone. Within a few days an infrastructure was created for it and Yelp won against all other competitors who followed the same idea.
However this worked only for start-ups, as the CEO did not have to fulfil compliance requirements, nor ask the board of directors for permission.
It is a David against Goliath scenario. The small, swift start-up against the enormous, immobile cooperation. But at the latest in 2016 this can become an antiquated point of view.
Large companies can be innovative and flexible, too.
In comparison to start-ups large cooperations have important advantages in many regards:
· Renown brand
· Large clientele
· Clear plan
· A lot of experience in the market
These advantages in combination with the following tips can allow large companies important competitive advantages.
Buying up successful young companies and integrate them in the company’s process. This is of course cost-intensive and bears a high risk, however such investment can be very promising.
Promoting an innovative culture that already starts on the bottom of the hierarchy. Adam Bryant and Andy Boynton described it in their book “Virtuoso Teams”. Innovation takes place exactly then when
a) talented employees believe they have total freedom and
b) the management believes they have total control.
Mutual respect paired with clever interaction can result into amazing achievements. However adjustments in regards to company culture always have to be regarded as long-term process.
Outsourcing of digital projects
With the help of marketing campaigns, the ‚Digital Innovation Managers‘ in companies plan which projects are realized by external service providers like Hackerbay in a timely manner (maximum duration from concept to realization: 1 month).
Important for success are always set metrics that are accepted by all partners.