Big companies’ dilemma

Thousand times I heard about big companies lose abilities to innovate successful, but I didn’t totally understand why these failures always happed. This article really gives me a reasonable explanation.

That’s true-- innovation is just not in big companies’ DNA. They need to give up something when they gain big success. When there is one more thing to considerate, there is less chance to achieve success. Too many things need to be considerate while a big company makes a whatever decision. It remind me about experiences in big companies, I had to wait for couple of weeks or even months for just a simple idea approved by managers, senior managers, directors, and executives. That would take some efforts to explain—they need to take so long time to make a small decision, don’t mention a brand new innovated product. To launch a new product, big company should persuade most of leaders. Once one leader hold negative attitude, it’s would be harder and more time consuming for them to make plan into real. But for a start-up company, it’s would only take a night from make a plan to take an action.

What’s more, just as the article said, the fatal reason why big companies can’t innovate is they put too much care on profit and recent customers. Big companies are already successful, so they won’t take any risk. Faced with innovated products, they always think about how to cut cost and make more profit. But a new product always won’t show high profitability at the beginning as mature products. And if big companies always focus on existing customer segment, maybe they will do a good job on customer relationship, but they will never expand customer segment in a new area.

I can’t help but wondering, how if a big company totally separates its innovation team or new product manages team and trade them just as a small start-up company? Will that big company gains the same successful as start-ups? Or at least has the same opportunities to gain success? However, I didn’t hear a successful example of that. How do you think about that?

Reference:
http://blogs.hbr.org/cs/2012/09/why_big_companies_cant_innovate.html