How can big companies keep the sparks of innovation?
- 26 July 2013
- From the section Business
How do big companies that have been around for years or even decades continue providing products and services that are true to their brand but also ahead of the competition?
To an extent, it's inevitable that companies become less innovative as they grow, says Aberdeen Asset Management chief executive Martin Gilbert.
"As you get bigger, you know you lose that entrepreneurial spirit," he says.
This is partly a result of having more people in the decision making process, and caution about rocking the boat, according to Mr Gilbert.
He says: "You've got a board of directors now who are sort of sitting there sort of thinking, 'We can't let this maniac get loose.'"
But it's not just the board that can get in the way of different ideas and approaches.
"The bigger you get, the more interest the regulator takes in you," says Mr Gilbert.
"Everything slows down."
Jeff Immelt says the many failures he's had in his 31 years at General Electric have taught him a great deal.
"Failing quickly is actually not that bad, you know," he says.
"Failing slowly is deadly."
Mr Immelt hired The Lean Start-up author, Silicon Valley entrepreneur Eric Reis, as a consultant at GE and has adopted his notion of the "minimally viable product", which is about getting a product to the market quickly and then testing it and adapting it according to consumer feedback.
He says: "Our processes were really built on, 'We've got to be perfect from day one, blah-blah-blah.'
"That's all going to change."
Market of testers
Eric Reis's views have held sway with internet companies for many years.
The chief executive of Renren, one of China's largest social networking sites, thinks that an internet company is in a strong position to bring products to market fast, and adapt accordingly.
However, while they can experiment and tweak the product, he also warns of the importance of speed.
Mr Chen also believes innovation is central to an internet company's success.
"Inventive culture is always the secret recipe for a lot of technology companies," he says.
And to this end, he believes companies needs to have a structure that enables this.
Just as large companies can be too cumbersome and slow moving to be inventive, Mr Chen thinks large teams are also not as conducive to innovation.
"You want to break people into smaller teams and make them accountable for the particular endeavour that you engage," he says.