Reference no: EM133696296
Assignment:
Why Big Companies Fail to Innovate
Matthew Kiernan, based in Unionville, Ontario, is a management consultant whose views command attention. He has a PhD degree in strategic management from the University of London and was a senior partner with an international consulting firm, KPMG. Subsequently, he founded his own firm, Innovest Group International, with staff operating out of Geneva, Switzerland; London, United Kingdom; and Toronto, Canada. He was also a director of the Business Council for Sustainable Development, based in Geneva.
His book, Get Innovative or Get Dead, took aim at big corporations for their poor record on innovation. "Any five-year-old could tell you that companies must innovate to survive," he said, "so what's the problem?" According to Kiernan, it is one thing to understand something in your head but quite another thing to really feel it in your gut. This is further complicated by the difficulty of getting a big company to shift gears and turn its culture around so that innovation becomes the norm rather than a special effort. Look back at the discussion on innovation at the beginning of the chapter to re-visit its importance in our increasingly competitive world.
Kiernan called for a company to develop a style and atmosphere that favour individual risk-taking, similar to the intrapreneurial approach discussed in the I Chapter.7 That means that if a team tries something that does not work, you do not shoot it down. Encouraging innovation, which inevitably involves taking risks with the unknown, means accepting the fact that it may take two or three attempts before something useful is developed. Recently, Matthew has applied this principle to sustainable development, including the topic of carbon finance.
The 3M company is often used as a great example of a company that encourages creativity. Its policy dictates that 30 percent of annual sales come from products less than four years old. However, M3 was not always that progressive. When the now legendary Post-it notes were first developed by an employee; he had a hard time getting the company to see the potential of his idea. This ultimately triggered a major change in the company's policy. Kiernan pointed out that most companies give lip service to the necessityof innovation, but do not act in a credible way as far as their employees are concerned. If you mean business, you must take that "bright guy out of the basement, [the one] everybody knows is a genius, but whose last two enterprise efforts came to grief, and visibly promote him."
Discussion Questions
1 Why do large companies find it difficult to innovate? Is it because they are big or because they are afraid of the unknown? Explain.
2. Do smaller companies do better at innovation? Is that because most of them are private companies and not accountable to outside stakeholders? Explain.
3. Do some research on 3M and find out how this large company encourages innovation and what it means to them.