Just couple of weeks back, I commented on a New York Times article that seemed to follow the usual journalistic practice of setting up a strawman and knocking it down. In this instance, the article claimed that there existed a belief that only small corporations could innovate, but in fact, larger corporations were really better geared to do so because of their deeper pockets. Now comes a piece by Prof. Jim Heskett of Harvard Business School (Do innovation and entrepreneurship have to be incompatible with organization size) addressing the same issue. His summary of the discussions that followed are quite instructive and worth reproducing in fulll:
Many reasons were put forth to explain why there is a perceived relationship between size and stalls due to general lack of innovation. Jeff Herman suggested that it can be attributed to a diminished ability of managers to "'personally' drive innovation and competitive advantage." Gerald Nanninga placed the blame on "infestation" (parasites that successful organizations attract) and "cannibalization" (fear of damaging existing businesses). Phil Clark pointed to the "boundaries" that form when organizations grow that present the "potential for clashes and struggle." Bob Brown attributed it to "risk aversion combined with lack of vision, drive, and prescience for the market in … second generation (managers)." Leighton Carroll cited "very strong finance and legal teams" as sources of risk aversion.But other respondents concluded that it doesn't have to happen, and proposed antidotes to the phenomenon, starting with David Levine's "list" of "a strong force at the top … to drive a central vision and … give resources and energy to priority areas for innovation." Amy Sauers added findings that suggest that large firms succeed that "attempted to 'get small' (through the vehicle of) 'lean, mean, heavyweight teams.'" Another ingredient suggested by Eric Ries is that of a "built-to-learn culture (centered) around rapid iteration and customer insight." One way to address the challenge, according to Jeffrey Vetter, is to "separate out forward thinking groups from the day to day business." Dave Schnedler suggested hiring the best creative engineers, giving them "tremendous latitude," and insuring "no negative consequences" associated with failure of innovative ideas.The right kind of leadership—capable of building trust, the willingness to take risk, and establishing a culture tolerant of failure—was cited often as the most important ingredient in supporting innovation and entrepreneurship in organizations of any size. If that's the case, one has to conclude from the comments that there is a shortage of such talent. Can someone lead both a large, established organization and encourage intrapreneurial effort inside it? Or are the requirements so different that it is too much to expect one person to be able to do, as Forrest Christian suggested? Referring to the same problem, Jim Johnson invoked my colleague Michael Tushman's work on "ambidexterity" among leaders, concluding that "Most leaders are just right-handed." Richard Eckel pointed out that "Business schools … teach 'mature' organization skills, primarily because entrepreneurial and creative organizational skills are not teachable." Do you agree? If that's true, we may have to look elsewhere for the kind of leadership we seek. Perhaps it will come from a "younger culture" that is now infusing organizations with "teaming and a desire to be more cohesive (which will) actually foster more effective innovation," as Paul Davis suggested. What do you think?