What are the two major goals of many companies? To grow sales and to grow profit. And while most companies say that being innovative is also a key goal, do they really mean it? The typical company tends to spend two percent or less of revenues on research and development. And the great majority of “new” products are usually simple line extensions or new models. At a large number of companies, innovation may not be dead — but it is certainly in a deep slumber.
With this in mind, let’s take a look at a terrific article called “Why Companies Stop Innovating” by Steve Blank for Inc. According to Blank:
“There’s been lots written about how companies need to be more innovative, but very little on what stops them from doing so. Companies looking to be innovative face a conundrum: Every policy and procedure that makes them efficient execution machines stifles innovation.”
“Facing continuous disruption from globalization, China, the Internet, the diminished power of brands, and the changing workforce, existing enterprises are establishing corporate innovation groups. These groups are adapting or adopting the practices of startups and accelerators — disruption and innovation rather than direct competition, customer development versus more product features, agility and speed versus lowest cost.”
“But paradoxically, in spite of their seemingly endless resources, innovation inside of an existing company is much harder than inside a startup. For most companies it feels like innovation can only happen by exception and heroic efforts, not by design. The question is: Why?”
Click below to see Blank’s detailed answers to this question.