How Large Companies Can Think Big

4050_innovation_business

Although rich with funds and resources, big businesses often struggle to innovate. Here’s how corporations can behave more like the challengers.

Start-ups have innovation at their core, offering creative new products and disruptive solutions to challenge existing markets or tap into new ones. But for large organisations – often characterised by sprawling workforces, set systems and risk-averse shareholders – continuing to come up with new and original ideas to drive the business forward can seem like an impossible task.

Stefano Messori, a design strategist and corporate trainer based in Dublin, says for large organisations, innovation tends to be incremental – for instance, enhancing an existing feature of a product or service. But while this works up to a point, sooner or later they need to think about a completely new way to satisfy the customer.

“Take Gillette, for example,” says Messori. “They’ve already put five blades in the razor, so it’s not that you need six, you need to find new ways for people to shave. That requires forgetting what you’re currently doing and jumping into the unknown. That’s what’s really lacking in corporations because they become very settled in their ways.”

Focus on problems

Messori is an advocate of the design-thinking approach to innovation: finding a pain point for the customer and figuring out how to solve it. “Creative people don’t look at the product,” he explains. “They look at the way the customer behaves and what’s in their way to achieve whatever it is they’re trying to do.”

Patrick Monaghan, product director at Phorest, a CRM brand specialising in software for high-street salons and spas in the UK, Ireland, US and Finland, says his teams work in a similar way when developing new software or improving their existing systems. “If you have a development team that’s tasked with delivering what has already sold, innovation very rarely tends to happen,” he says.

Monaghan explains his developers come up with their most innovative ideas when they’re presented with problems that Phorest’s customers face in their own businesses – for instance, a high drop-off rate when clients reach the payments page – and create solutions to those.

To innovate, he says it’s important for product teams and sales teams to work closely, communicating the feedback received from customers.

Fail forward

“I think the biggest thing large companies have to embrace is failure,” says Eamonn Carey, entrepreneur and MD of innovation accelerator Techstars Connection. “I’ve seen that with a lot of companies – they’d try something and if it didn’t work immediately or give them €10m straight away, they’d just abandon it.”

For early-stage businesses using the ‘lean’ start-up model – developing new ideas quickly, testing them to see what works, making improvements, and testing again – failing is just part of the development process.

Monaghan’s teams work in two-week cycles, shipping out prototypes or newly developed features, then making incremental improvements based on the feedback. He believes it’s possibly for large enterprises to work in a similar way, but it requires them to change their mindset. “You can either have fixed time, fixed scope, or fixed team, but you can’t have all three,” he says. “You have to be realistic.”

Start at the top

For a large organisation to really foster innovation, Carey believes the influence must come from the top down. He says the most successful partnerships between large corporations and start-ups on Techstars’ programmes have come about when the former’s executive teams get involved.

 

“I think the biggest thing large companies have to embrace is failure”

Eamonn Carey, entrepreneur and MD, Techstars Connection
 

“With [US retailer] Target, the CEO took part in the programme, mentored the teams, really got an understanding of how they work. Being there and seeing how that works at the coalface, I think, led to a lot of thinking about how they could structure internal teams at Target to innovate,” says Carey. “It needs to be someone really senior communicating the direction of travel for the whole organisation.”

Carey says large corporations fall down when they pay lip service to innovation – for example, by giving creative teams a brief to develop new ideas but failing to release them from their day-to-day duties. “If senior management take this seriously and really think about it as a key pillar of what they’re doing, it can be unbelievably beneficial,” he says.

Look outside the company

Bringing a fresh perspective to a project often allows for outcomes that a large organisation hadn’t considered. Carey has seen big companies achieve great success when they partner with start-ups outside their own organisation.

“I think when [companies] engage with external start-ups, they get a much better diversity of ideas,” he says, adding this can often bring about solutions to problems they didn’t know existed but that could affect their business two or three years down the line.

Mary O’Brien, CEO and co-founder of remote GP service VideoDoc, says many of the large healthcare providers she works with in the UK and Ireland had the capacity to develop their own video consultations, but that the complex features her team built make her technology a more attractive proposition. “They’re happy to take on a platform they know is already working,” she says.

“It took us 18 months to build it, get feedback, to improve upon it. We’ve got teams constantly working on how to make improvements and updating it so it’s moving with what the market needs. I think from the perspective of corporates taking on our service, if you started to build this platform from scratch, you wouldn’t necessarily integrate or implement all of these aspects of it.”

 

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