What happens when you put leaders from one of the world’s top corporations together with a building full of young, energetic start-up entrepreneurs?
Well that’s exactly what happened at the Innovation Warehouse accelerator hub in London last week. Maybe you’d think the wise elders would impart business tips to the new generation?
There was certainly great interest in buying products from some start-ups by the executives. But overall for most of the small businesses, it was more about oil execs trying to extract advice on how to be innovative, from the start-ups. Are big multi-gazillion dollar companies that desperate these days?
More than once, the executives did say that innovation and fresh thinking declines in big companies, as they become more process-based and bureaucratic. One executive mentioned to me that his group’s appearance at the Innovation Warehouse was part of a two-day immersion in innovative business thinking for the seasoned businessmen and women. Another said out loud, at one point: “If any of these entrepreneurs worked in our company, they would die!”
He was referring to how a tightly structured and bureaucratic environment can suck the life out of up and coming entrepreneurs who may thrive on innovation and lateral thinking. Those are certainly the kinds of start-ups that Innovation Warehouse, a successful business accelerator, houses.
But did the young start-ups take away anything from the oil execs? One said he presented his business to them and they threw solutions at the problems he raised, but they were invariably run-of-the-mill answers that he had mostly already tried. Another entrepreneur said she felt she had had her brain sucked dry by the executives who were a little in awe of all the new approaches that existed for start-ups, whether funding techniques or technical solutions.
For this entrepreneur it was clear that although the individuals in a big company could be enterprising, the organisational structure is often a block to introducing change. What’s more, systems and process can sometimes be a convenient excuse in some parts of the organisation, to avoid change or disrupting the conventional order. The company mindset seems to be one of controlled risk, so where a risk cannot be quantified, it is deemed as too challenging to consider and there is a reverting back to the status quo hindering innovation.
One of the more senior executives even offered a different kind of answer:
“I am growing more convinced that the solution to creating increased innovation is that we have to cut a huge company into small businesses that have a certain independence. They are small so they are focused and it will be much easier to develop innovation in smaller business units. Maybe we don’t need to find a solution at the level of the large company. Perhaps smaller entities, three or four people around a table, is the solution.”
So is it inevitable that the bigger the business becomes, the less likely it will take risks and be innovative? How can businesses truly strike a balance between innovation, growth and success?