Innovations play a significant role in shaping the modern business world, but this is one area where big corporations fail terribly. To the amusement of small businesses, big corporations are now left to watch from afar, and can only participate by acquiring what startups have invented.
A lot of support is required for innovations to thrive, and employees should be encouraged to not fear getting things wrong. This is not the case in big businesses, where service delivery is defined in black and white, processes must be followed religiously, and any attempt to deviate from that calls for disciplinary action.
There are many reasons why big businesses look to small ones for innovation, but to sum it up, innovations run in the blood of small businesses and big ones cannot emulate that.
Take a look at the following points to learn how your startup can out-innovate big businesses.
Startups Do Things Faster
When it comes to a call for action on new ideas, startups outpace large enterprises. Startups can act quickly due to lean management, and the enthusiasm to beat all odds. Take the front desk staff who are in contact with clients on a daily basis. They can easily pick up on gaps existing in service delivery from the feedback they receive from customers, and propose action to the management. Management should act swiftly, and implement necessary changes. If the same were to happen in a big business, it might take longer as several departments must be involved to amend policies and procedures.
Large companies are known for red tape and long chains of command, all of which hamper innovation. In small businesses, employees embrace changes and implement actions much faster. For further reading, check out this article by Forbes on why startups are outpacing big businesses.
Access to Resources
Though startups have few resources compared to the big businesses, what they do have can be easily accessed and channeled to a new idea at speed. This can create an enormous impact on the firm before others replicate it. In a large company, the release of resources would require the authorization of several top executives who are not always accessible due to their busy schedules and status. By the time things get the green light, the innovative mind may be long gone, or the initial spark is no longer there. A drawn-out process works against the spirit of innovation.
Startups Have Strong Team Environments
Everyone knows each other in startups, from the gatekeeper to the top executive. They know each other by name and in person, and are a close family. This bond is the reason for strong teamwork. When a new idea comes up everybody wants to be part of it, and together they work for the mutual benefit of themselves and the business. For big businesses, teamwork is a rarer commodity that exists mostly on paper, but not in the heart and mind as people are made to believe. There’s a fierce competition which promotes individualism. People want to hold on to their innovations and be recognized for it, which is why new ideas cannot easily flourish.
We’re In This Together Culture
This is the culture in a startup, and it’s good for nurturing innovation. Everybody has a stake in the organization; if the business goes down, they’ll all go down with it, and that’s why everybody works to move the company forward. This is a healthy culture because everybody feels like they belong. They own what they do, and want to continue improving the process. The urge for improvements gives birth to innovation. Read more on how continuous improvements lead to innovation from this article by the Government of Western Australia. In big business, ‘it is everybody for himself and God for us all kind of thing’ which makes innovation a lower priority.
Support for Innovations throughout the Company
There’s a special flame created throughout the company when someone senses an innovative idea. Everybody gets excited, wants to follow the progress, and is willing lend support whenever called upon. This focus on innovation stimulates everybody’s thinking, and encourages them to get creative in turn. You can read from Business Victoria on improving innovation and how support is necessary for it to succeed.
Startups are categorical when they hire and promote. In order to join the team, or when it comes to promotion, owners of startups will dig deeper into your track record to see what you have accomplished before. Those who are innovative stand more chance than anyone else, and this pushes employees to work hard and stay creative. Bureaucracy in big businesses works against innovation, because human resources policy tends to peg promotion and hiring to experience and qualifications. This article by FastCompany best describes the need to look for potential than experience when hiring.
Attraction to Young People
Startups being a hotbed of innovation attracts young people. You can look at it as a double edged sword; on the one hand, startups attract young people and on the other where there are young people, there are innovations. Young people want others to listen to them; they want their contributions to be taken seriously and are not willing to settle for old ways of doing things. That is why they feel at home with startups. Read more on the importance of young people to your startup community as compiled by Fed.com
Startups are prepared to venture into risky projects without much coercion. Innovations are dangerous; there’s no guarantee that after investing your resources the project will succeed, but you’ve got to try it; it is called risk-reward tradeoff. Big businesses prefer proven products to new products, because of fear of failure and loss for their shareholders. Get valuable insights about risks and rewards of innovation here.
Startups Are Products of Innovation
Startups are born from innovation. Most startups come from employees of large corporations who had enough of red tape. They got tired of trying to make recommendations or improvements that fell on deaf ears. They identified a gap in the market, which forced them to stand up and channel their energy into something they felt strongly about. Their colleagues were attracted, and joined them. The startup grows faster due to the experience base, innovations and the energy and commitment of the team. After many years of hard work and exponential growth, bureaucracy infiltrates and innovation is lost - causing the cycle to begin again. Read this article by Harvard Business Review on why big businesses can’t innovate.
So if you own a startup or are thinking about starting one, now you know what to do to remain on top of innovation; keep a lean management structure, support each other, and keep a positive attitude towards risk. If you are coming from the corporate world, remember not to carry your bureaucratic habits to your growing business, because they’ll only hold you back.
If you own a startup or are in the process of starting one, let us know how you define innovation. Tell us how you intend to be innovative in the comments below.