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Why large organizations cannot innovate

How can an organization with thousands of employees, knowledge and expertise, be less innovative than the average start-up? The underlying causes and mechanisms resulting the lack of innovation are diverse.

Adrenaline
It’s no secret that large international organizations are often under immense pressure from investors and shareholders. The stress this creates affects the organization in waves. The result can be that business unit managers are forced to have a short-term focus. They bear enormous pressure for daily operations. There’s always a crisis to manage. There’s always a new quarterly target. They are in a constant overdrive. The adrenaline rush this creates only makes it harder to imagine where they want to be in five years. They don’t easily find the peace to sit behind their desks, put their feet up, and think deeply. Let alone go outside and literally find the space to feel and think.
Strategy stacking
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. Due to the hurry associated with these processes, there is a strong tendency to formulate this strategy in the form of, once again, new figures: higher revenue, higher customer satisfaction, lower margins. A strategy department combines all plans. This creates a strategy that is not very directive and unambiguous.
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 needs to go, multinationals perpetuate the idea that it is not necessary to have an idea of this themselves.
Lack of engagement
A fourth problem is that organizations often do not feel the need to change direction immediately. When you have millions of customers, great products & services, and half of the market share, it’s easy to think you’re untouchable. If you, as a business unit manager, also know that you will make the next career step within three years, the temptation is great not to take ownership. Even if you know there’s a small hole in the bucket, you keep silent about it. Not all the water runs out immediately. It takes a lot of courage to stick your neck out.
Little attention to execution
And then there is one last problem imaginable, called poor execution. Even if you have developed a good strategic plan, you still need a shared vision of how you want to execute it. This requires perseverance and a real belief in where you want to go. For that, you need a clear message that you dare to share transparently with your people. It’s the only way to realize a new line in your organization.
Make your people strong
To develop a truly innovative long-term vision, you need to let go of your short-term focus. That sounds simple, but it’s not. 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: with the business unit. By giving managers the opportunity to develop innovative strategic plans, separate from the daily hustle and bustle. By investing in the talent of your own people, you lay the best foundation for strategy development. Real innovation requires authentic leadership.
Prioritize your dreams
And even then, it takes a lot of courage. Courage to leave the beaten path and steadfastly choose an organization that is truly future-proof. To create a future together that you truly believe in. To make the organization and the world a better place.
That’s why you won’t make it with an extra project group or a casual request for everyone to contribute to innovation alongside normal workload. If you really want to work on innovation, you need a dream and the courage to prioritize realizing this dream day by day.

Do you want to work on innovation? Then schedule a conversation with the Bolster team now.

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