Can Big Corporations Successfully Innovate? Yes – Here’s How
We’ve all heard the complaints about big companies vs. smaller startups. Big companies are too slow, startups are more nimble. Big companies stifle creative thinking, startups foster an open mindset. Big companies aren’t willing to take risks, startups ARE risk. There might be some truth to those broad generalizations, but I’d like to share a few lessons from companies I’ve worked with that are sparking creative thinking and that are successfully innovating.
Recently I convened a corporate innovation roundtable where innovation leaders from a half-dozen companies came together to share learnings and experiences around their internal innovation efforts. The companies they represented ranged from about $500M to multiple billions of dollars in annual revenue, were national and international in scope and came from the energy, technology, manufacturing, healthcare and services sectors. Let’s look at what we learned.
1.Culture Is Key
Perhaps no surprise, culture was the most critical component to having a successful internal innovation program. Leading companies featured a blend of top down and bottom up thinking. The tone was established and supported by the “top” and was fully embraced and energized by the “bottom.” The most senior leadership of the company saw it as their responsibility to cultivate innovative thinking and demonstrated an openness to new ideas from anywhere within the company. Employees across the company were inspired to participate and would spend time off-hours developing their ideas.
For example, Exelon, a multi-billion-dollar power generation and supply company, shared how they built a robust innovation culture in response to an increasingly competitive landscape and rapidly evolving technologies. To begin with, Exelon embarked on a listening tour to learn from companies with well-known innovation practices. Leadership then adopted these lessons and generated a plan to jump start their own innovation efforts. They gathered the right people to form their new team, put financial resources behind them, designed processes and set expectations around ideation, investigation, and implementation.
Exelon now has a holistic approach to innovation that spans the company. Corporate leaders sponsor Innovation Expos at football stadiums. Business unit leaders are incentivized via innovation-related metrics to spur their divisions’ participation in innovative efforts. Employees are stimulated through internal innovation-related communications and are excited to present their ideas at company-wide events.
2.Transparency Encourages Participation
A second lesson that emerged from our discussion was that there had to be transparent processes to manage the intake, assessment and rewarding of new ideas. Companywide communication around timelines and review criteria was obligatory. With expectations outlined, senior leaders could remain good stewards of company resources and employees could understand how their innovative ideas would be evaluated.
Molex offers a great example of this approach. Molex is a large, multinational corporation with billions of dollars in annual revenues. Earlier this year they kicked off their third Innovation Challenge, a program focused on spurring non-organic growth outside of their core businesses of connectors and cables. Brian Krause, Vice President of Global Marketing and Communications, explained their process:
“The Molex Innovation Challenge was established as a global internal idea exchange program designed to harness the experience and innovative thinking of more than 35,000 employees worldwide. Our goal each year is to identify and incubate new technologies, applications, and processes that will support the next phase of growth for Molex. There are several steps to the program in which all employees can participate: post an idea on an internal forum, encourage feedback from other employees on the concept and vote for your favorites. After submissions are complete, the ideas are further assessed by management based on their potential to capture market share, alignment with technology direction and by the likelihood of successful execution. After one or two winning teams are selected, they receive corporate recognition and the opportunity to further refine their prototypes. The Innovation Challenge has proven to be an excellent way to encourage global employee engagement and create opportunities for meaningful innovation.”
Employees are motivated by formal appreciation, a cash prize and the opportunity to do something creative outside of their day-to-day duties. With clearly defined processes, company-wide voting and strong incentives, Molex provides a pathway for the best ideas to bubble up and be primed for market entry.
3. Recognition Cements Credibility
While not all roundtable participants agreed on what rewards were appropriate to acknowledge internal innovation efforts, all concurred that some kind of recognition and resources were necessary to demonstrate that the company believed in their internal innovation mission. SMS Assist, a nationwide provider of building management services, grants employees time to work on their ideas and bring them to market. As noted above, Molex gives the winning teams both time and money to continue improving their initial prototypes. For JLL, a multi-billion-dollar international real estate services company, winners of their Da Vinci Award for innovation are identified in their corporate profiles on the company’s web site and in the media. Many employees proudly list their achievement on their LinkedIn profiles.
Publicly congratulating and rewarding innovators demonstrates each organization’s commitment to its employees, validating their efforts and showing respect for their contributions. All companies should be proud of their employees, but these are not mere cheerleading efforts. There is an expectation that winning ideas will progress through development stages and will contribute to the company’s bottom line.
4.Innovation Attracts Talent
Most companies used their internal innovation efforts as both a culture-building exercise and as a recruiting tool. Internally, innovation challenges were promoted in corporate newsletters and internal marketing campaigns. Word was spread throughout the company, as were updates on the progress of ideas from local to regional to national and in some cases to international judging stages. Winners and their ideas were featured in internal communications and the progress of their ideas from prototype to production were tracked and publicized throughout the company.
Externally, companies celebrated their winning ideas through press releases and notifications of awards ceremonies. When any of the new ideas, products, technologies or solutions were deployed into the marketplace, the companies used it as an opportunity to highlight the origins of the new idea and to share more about their internal innovation efforts with the world at large. Importantly, this approach reinforced to both current and prospective employees that the company valued and actively nourished innovation in a democratic and transparent way. Any employee could have a shot at being an innovator. This openness about innovation and the sharing of successes becomes attractive to potential new employees, helping companies outside of the world of sexy tech unicorns attract sharp, enthusiastic talent.
Most big organizations will never have a moonshot environment like Google X. And that’s OK. Most of the company leaders I’ve talked to know they need to take risks – albeit measured risks – and they will create new products, processes, services and technologies that bring value to their customers and to themselves. Companies like Exelon, Molex, SMS Assist and JLL demonstrate that successful innovation can come from internal programs, it can move the needle in terms of revenue growth and operational efficiency and it can be used to motivate and attract high-quality talent. What’s not to like about that?