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Why Big Companies can't innovate




Recently i read an article from Harvard Business review. Posting my thoughts on the issue.


I often wonder why many big companies, with lot of muscle power (money), fail to innovate. Even though companies come up with many good ideas, only few see light of the day and fewer meet with success. Whatever innovation happens is in processes or operational efficiencies. Even though there are exceptions such as Apple, we will have to wait and see how long Apple will be able to sustain their innovation quotient.

In the initial years of a company, the focus is more on solving a customer's problem and not on profit or quarterly margins. However, when companies become mature, focus shifts towards profitability and margins. In this process, organizational hierarchy, standards and  processes are formed. Utilization of existing resources and operational efficiency will become primary objectives as compared to a culture of innovation.

Applying a matured standards or processes to a new initiative is like asking a new born baby to run. Big enterprises need to understand their limitations while implementing innovative ideas. Impact analysis on their existing structure, practices and processes will help them understand the conflict and formulate effective road map and strategy.


Here is the link:

http://blogs.hbr.org/cs/2012/09/why_big_companies_cant_innovate.html?utm_medium=linkedin&utm_source=twitterfeed

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