Why big organizations can’t innovate

How can an organization with thousands of employees and a wealth of knowledge and expertise be less innovative than the first start-up? The causes and mechanisms that underpin this are various.

1. Adrenaline

It is no secret that large international organisations are often under enormous pressure from investors and shareholders. The stress that this generates hits the organization in waves. As a result, business unit managers may be forced to have a short-term focus. They bear an enormous pressure for daily operations. There is always a crisis to manage. There is always a new quarterly target. They are in a constant overdrive. The adrenaline rush that this produces only makes it difficult to imagine where they want to be in five years. They do not easily find the peace to sit behind their desks, put their legs on the table and think deeply. Let alone go outside and literally find space to feel and think.

2. Pile drive

A second problem is that strategies within multinationals often arise from the bottom up. During annual budget rounds, managers are asked to set innovation goals for their business unit. Because of the rush associated with these kinds of processes, there is a strong tendency to formulate this strategy in the form of, again, new figures: higher turnover, higher customer satisfaction, lower margins. A strategy department merges all plans. This creates a strategy that is not very directional and unambiguous.

3. Addiction to Consultants

A third problem is an addiction to consultants. When a vision document is needed, there is a huge tendency to outsource its production. By constantly outsourcing the core of their work, namely determining where the organization should go, multinationals maintain the idea that there is no need have an idea of this themselves.

4. Lack of Engagement

A fourth problem is that organizations often do not feel the need to immediately change direction. When you have millions of customers, great products & services and half the market share, it's easy to think you're untouchable. If you also know, as a business unit manager, that you will be taking the next career step within three years, there is a great temptation not to take ownership. Even if you know that there is a tiny hole in the bucket, you keep quiet about it. Not all the water will run out right away. It then takes a lot of courage to stick your neck out.

5. Little attention to execution

And then there is one last problem imaginable, which is called bad execution. Even if you have developed a good strategic plan, you still need a shared vision about how you want to implement it. This requires tenacity and a true belief in where you want to go. Doing so you need a clear message that you dare to share transparently with your people. It is the only way to realize a new line in your organization.

Empower your people

To develop a truly innovative long-term vision, you have to let go of your short-term focus. That sounds simple, but it isn't. It often requires a drastic change in organizational culture, which can only start at the top. For multinationals it would be best to place the responsibility for strategy development where it belongs: within the business unit. By giving managers the opportunity to develop their skills in developing innovative strategic plans apart from the daily hectic pace. By investing in the talent of your own people, you set the best foundation for strategy development. Real innovation requires authentic leadership.

Prioritize your dreams

And even then, it will take a lot of courage. Courage to leave the beaten path and to steadfast choose an organization that is truly future proof. To create a future together that you really believe in. To make the organization and the world a better place.

Therefore, you cannot manage with an extra project group or a non-binding request to everyone to contribute to innovation next to the normal workload. If you really want to work on innovation, you need a dream and the courage to prioritize the realization of this dream day by day.

Do you really want to work on innovation? Schedule a call with one of our team members right now.