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Cracking corporate innovation — why it doesn’t have to be hard

Our lives are dominated by huge corporations. They're responsible for the food you eat, the clothes you wear and the phone or computer you're reading this on.

Just an example: only 10 companies own 90% of the world's food brands — crazy, right? But even though the biggest companies are incredibly influential and have nearly limitless amounts of money, nobody is perfect. When you have to manage lots of products, people and offices, things inevitably start to slow down.

Even though corporations have easy access to talent, facilities and financial resources, it can be hard for them to innovate. It's definitely not impossible — just look at the constant technical innovation by industry giants like Google or Apple — but it takes a lot more work.

 

Painfully slow processes

One of the biggest challenges is also the most basic — it's very hard to get stuff done.

When your company consists of 20 people, that's not a problem. Let's say you run a web development agency, and you're creating a new website for a client. The Design team has to talk to Engineering, while a copywriter works to fill the pages with content. Because everyone's in the same room, it's easy to collaborate — you just walk over to their desk. The total amount of people working on the project is low, which means decisions can quickly be made without needing hundreds of meetings. Projects are often finished without much of a delay.

A small company can quickly come up with ideas, iterate on them and finish something — they’re infinitely more flexible than the large, convoluted structure of a corporate. There’s no easy way out – you can’t just make a couple of small changes and expect an organization to suddenly be twice as more efficient.

 

The Google way

The story of innovation has not changed. It has always been a small team of people who have a new idea, typically not understood by people around them and their executives.
Eric Schmidt
Chairman, Google

But some companies have a different take on things — take Google, for example. With more than 57,100 employees spread out over 70 offices in 50 countries, it's a sprawling enterprise. The way the organization is set up, however, makes it incredibly agile for a company of that size.

In its early days, Google operated as a flat organization — most employees were able to discuss projects directly with the CEO, or anyone they'd like. While this couldn’t scale to thousands of employees, the company still remains relatively flat today. Yes, there are managers, but the management chain to the top is kept short.

Like most successful innovative corporates, the company is set up as a matrix organization — ahybrid between functional (grouped by specialized function: Sales, Legal, etc) and divisional (grouped by division: Pixel phone, Google Home, etc). Workers often report to multiple bosses — a functional manager who reviews work and can help with skills, and a divisional manager who is responsible for the product or project the employee is working on.

This unique structure enables the business to efficiently use its resources, as talent and expertise can easily be shared across projects. It also allows for a free flow of information throughout the organization — both horizontally and vertically creating a real culture of innovation. Google's 8 innovation principles helps the company stay among the top innovators in the world.  At Google, employees are not asked to improve things by 10% but by 10 times - applying this notion of "10x thinking" allows employees to constantly challenge themselves and think outside of the box. A practice that has proven its worth. Google has been voted 2nd most innovative company in the world after Amazon.

Googlers are also constantly in contact with lots of their co-workers and tend to share more information more easily with each other — speeding up the decision-making process.

 

Legacy software

Great tools can be a powerful asset to your business — they have the potential to boost employee productivity and streamline processes. Unfortunately, most enterprises are providing them with the exact opposite.

Dive into any large business, and you'll see legacy software everywhere. Employees often have to deal with age-old systems, slowing down their work and causing a ton of headaches. If you're lucky, you're just stuck with using Exchange for email — less fortunate people have to deal with proprietary systems, custom designed for the company and barely updated in decades.

 

There are some valid reasons touse legacy software — banks, for example, could care less about flashy new features. For them, stability and high uptime are most important — when you're processing thousands of transactions per second, you want to avoid any kind of downtime. 

Aging IT is the biggest threat to banks today and maintaining it costs on average 3/4 of most IT budgets.
market insight

The reality is that these ancient systems hinder innovation. Most of the legacy systems are not build for future needs and don't support growth. Companies are unable to change or improve their processes because the system can not follow - making it hard to get out of the "old way of thinking". 

Today, no company can survive forcing its employees to use Word 2007 on an aging desktop computer. Instead, they should try experimenting with more modern hardware and software tools — not only your team will thank you for it, but the company profits too. 

Corporates have lots of potential — with enormous research labs, sky-high budgets and loads of talent, it's hard to argue otherwise. So start innovating. 

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