Innovation a Must for Big Businesses
There's an argument to be made for established companies to avoid the risk of innovation. But it's not the right one. Scott Anthony poses an interesting question: should successful businesses bother with innovation?
Scott's a sharp guy when it comes to corporate innovation, and he frames this issue well. It's fact that many established businesses ("incumbents") spend bankloads on developing new products/services and find miniscule, if any, returns. The venture capital industry emerged to provide non-incumbent firms with the capital to innovate, and many of those incumbents have swallowed up those smaller firms—essentially buying innovation.
To answer his own question, Anthony says successful firms should stay in the innovation game: they have the financial assets, the developers, the economies of scale and partnerships to do it right.
It's tough sledding, though, as discussed here.
There is no doubt that innovation remains difficult work, but companies that learn to think, and act, in the right way, can begin to reduce the waste that results from flawed innovation efforts. Who knows, maybe someday a manager will ask whether entrepreneurs should bother creating new companies given the overwhelming advantages of incumbency.
I'm with him. There's risk in everything, but the risk of losing competitive advantage shouldn't dissuade big firms from coming up with the next big ideas. And for companies with go-getter developers and innovative thinkers, pushing hard on this front is a no-brainer.
(If you're looking for a model for building a strong innovative culture, FedEx is a good starting point.)