Every multinational company in the world wants to be innovative, creative and original-but sometimes the infrastructure or culture inside these organizations does not support such ambitions-the will is usually there, and all of these companies have good people, but there is just something about the nature of a company that has been in existence for decades that can sometimes unintentionally place some roadblocks in front of the level of successful innovation they wish to achieve.
Younger companies, who have not been around for decades, often find that it is to their advantage when it comes to introducing innovation quickly. They are not burdened by huge legacy technology infrastructure or tied into long term contracts with service providers. They have a certain level of flexibility and maneuverability that fosters a spirit of entrepreneurship & innovation and allows them to test, try and even fail quickly in their quest for the right blend of innovation.
In this article, we will take a look at some of the reasons why innovation might be easier at younger companies such as tech startups.
Adjusting internal processes
Traditional organizations with long established internal processes and methods of doing things are often resistant to change or find that to introduce open innovation will involve altering or even dismantling internal processes that they have already spent quite a bit of time and energy putting in place.
It is understandable that there is a reluctance to change a process that may have been working very well for them for a long period of time. But the nature of innovation is often a case of “out with the old and in with the new”-the problem is, it is just not as simple as that when internal processes are tied to lengthy contracts or legacy technology.
Older organizations sometimes find that their appetites for innovation are restricted to softer approaches in the form of system updates, rather than an overhaul or a digital transformation. It may be the case that they are in long term contracts with service providers around their infrastructure technology or the internal processes inside the organization are simply not built to handle a constant stream of innovations or a rip and replace project that will radically alter what currently exists.
The challenge of significantly disrupting or altering internal processes might simply be viewed as more hassle than it is worth at successful companies. There would be a strong need to get a range of different stakeholders around the table-these stakeholders are likely to be busy and preoccupied with current business priorities and work streams and may not have the appetite for a digital transformation project that would require them to significantly alter internal processes that they may view as working perfectly fine right now.
Room to maneuver
Younger or newer companies on the market will find that they are not bogged down by legacy or traditional infrastructure. As they are new to market, they will be building a new client base so won't have their time monopolized by a large existing number of clients- it can be hard to focus on innovation when first and foremost you have to focus on customer service and keeping clients happy so that you can sustain revenue streams. Tech startups often attract young people and millennials because they offer the platform for innovation activity and the chance to work with new technologies.
These innovative companies will also have flexibility and more room to maneuver when it comes to internal policies and procedures- the reality is likely to be that many of these policies have not yet been created or implemented. The focus is usually product innovation and go to market strategy that outlines why they are different and the reasons why what they are bringing to the market, is better and more innovative.
All of this can serve to create an environment of true originality and real innovation-they have the opportunity to focus all of their attention on being innovative. They are also in a position to make fast decisions, test something quickly, have it fail without any major consequences and take the learnings so that they can iterate again. This kind of ‘test and learn’ scenario can help make them a successful startup but may not be available to the longer established or more traditional organizations.
Instil a culture from the start
It may also be the case that new technology companies or younger companies in general find it easy to instill a culture of innovation right from the start. This can be a culture of building innovative technology and processes from the ground up and constantly tweaking them so that innovation becomes an everyday process or even a company culture.
Traditional companies or older organizations will naturally want to be innovative too but may simply find themselves with a bit more work to do when it comes to a culture of innovation--it may be the case that they have simply had a lot of success in the past from a structured or traditional approach, and now find themselves needing to change and innovate in response to an altered market and economic landscape in a post pandemic environment. Because there may not have been a need to be inventors or instill a culture of innovation in previous years, it is therefore not an easy or natural shift towards open innovation, and they may require outside assistance when it comes to creating and developing this culture. The desire will be there but the road map, insight our expertise may not be in place just yet and this will require some thoughtful planning.
It is nothing that cannot be achieved with the right level of commitment, it may just be the case that younger companies are naturally more suited to it- younger companies can pivot and change course quickly whereas traditional or long-established organizations are similar to an ocean liner, where a rapid turn or changing course requires more effort and planning.
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