November 5, 2013

How Companies Stifle Innovation

Taking a new idea from concept to marketplace within a large, established company is no small feat. As we’ve discussed in previous articles, an established company’s focus is often limited to existing business models. Conversely, smaller, leaner start-ups often focus on finding a workable business model and then matching what customers need with what their company can viably offer.

But it seems the question of how to encourage the kind of innovation found in many start-ups within the corporate ranks is still one that plagues business leaders and industry experts. In a recent Harvard Business Review article, Scott Kirsner offers 11 ways that large companies stifle innovation. His findings are based on conversations with more than twenty innovation-oriented executives at large corporations like Intel, Whirlpool, General Mills, and Publicis Groupe.

While all 11 of the answers vary in their reasoning and look at different roles and departments, what stands out most is that the majority of the answers relate to the corporate culture in some way. Whether it’s “embracing lots of people, so they feel they are part of the story,” or providing spaces to foster creativity, the theme of establishing a culture of innovation rings loud and clear.

John Kispert, CEO of Spansion, agrees. In a BusinessWeek article on building a company with innovation in its DNA, Kispert writes, “One of the most important aspects of corporate culture is encouraging employees to embrace change. The business environment is always changing, and leadership’s job is to ensure that the organization adapts and evolves to meet those changes.”

In writing for Digital Growth Insights earlier this year about what he considers to be “Three Friends and Three Enemies of Innovation,” Paul Sloane, professional speaker and expert facilitator on innovation and lateral thinking for business leaders, notes that “The second friend [of innovation] is a culture of curiosity. People should be encouraged to look for new and better ways to accomplish things, and to understand why certain products do better than others. It’s important for the staff to feel that they can challenge existing models constructively, and that they are being listened to.”

In the end, it is clear that one of the most crucial elements of innovation, particularly within a large, established organization, is a corporate culture that promotes innovation and encourages employees to embrace, rather than fear change. In the current business landscape where change is the name of the game, success largely depends on a company’s ability to be nimble and agile in order to respond quickly to the needs of its customers, as well as its ability to find innovative ways to meet those needs.