3 Ways to Grow Without Losing Your Innovative Edge
June 18, 2013
Does the fear of losing your company’s innovative spirit keep you up at night? Board of Innovation co-founder Philippe De Ridder shares the secrets to reversing your transition into a sluggish corporate giant.
It isn’t exactly controversial — or incorrect — to suggest that as expansion-stage companies scale, they often run the risk of evolving into the lumbering Goliaths they used to run circles around.
Open-door policies and relaxed vacation plans disappear. Executive and managerial hierarchy forms. And previously non-existent departmental silos begin to smother the collaborative nature of the organization.
In a matter of a time, a formerly lean, innovative startup has turned into a slow-moving, unresponsive, process-obsessed corporation.
“The transition can be very difficult to manage,” says Philippe De Ridder, co-founder of Belgium-based Board of Innovation, an international consultancy that helps corporations like eBay, Proctor & Gamble, and Volkswagen think, act, and innovate more like startups. “Corporations by nature have a different DNA, and they tend to require a very different mindset. Striking the balance between adopting that DNA and maintaining your innovative core is a big challenge.”
3 Tips for Remaining Innovative and Disruptive as You Grow
Just because growing businesses are typically more beholden to investors, customers, and public scrutiny, it doesn’t mean those companies must abandon their innovative spirit to survive.
“Quite the contrary, in fact,” De Ridder explains. “For a business to be sustainable in the long-term, it must maintain its ability to innovate. It has to continue exploring disruptive business models and doing the things that have helped it expand to where it is now.”
To do that, however, De Ridder says businesses must avoid making three key mistakes and remembering these tips as they scale:
1) Resist the Urge to Punish Failure
As smaller companies grow into big corporations, De Ridder says the culture of the business changes. Individual or team failure is more scrutinized, managers and executives become more risk averse, and the experimentation that leads to innovation is discouraged.
By contrast, many startups encourage failure. Doing so tends to spark exploration and progress, both of which are key ingredients to sparking innovation.
“Punishing failure is detrimental to innovation,” De Ridder explains. “In order to innovate, you have to fail. You have to value learning and progress over being right, which requires you to almost reward failure. Some businesses we’ve worked with actually have failure parties or give out annual failure rewards. The idea is to encourage risk-taking behaviors, even if they aren’t successful.”
2) Avoid Creating Organizational Silos or Corporate Hierarchy
When a business scales and begins to build out its management team, the tendency is to develop corporate hierarchy. Unfortunately, a byproduct of that process is that decision making velocity tends to slow and idea sharing becomes more difficult.
To bypass that, De Ridder recommends expansion-stage companies maintain an open door policy as they grow and proactively host organization-wide brainstorming sessions.
“That fosters innovation organically and allows team members to feel free to share potentially innovative ideas,” De Ridder says. “If you don’t proactively create those forums or opportunities for idea sharing, and you instead construct walls that prevent communication, innovation will suffer.”
3) Don’t Implement Needless Processes and Procedures
While De Ridder acknowledges that large corporations — particularly publicly traded ones — must put specific processes in place that hold it accountable and allow it to function optimally, he says that many growing companies go overboard in that regard.
“The natural bias is to try to control everything,” De Ridder says. “And a lot of times that creates these unnecessary steps that kill a company’s innovative mindset.”
So, instead of thinking about how you can control things like expense approval, vacation time, and daily schedules, focus on promoting flexibility and encouraging everyone in the organization to act more like entrepreneurs, De Ridder suggests.
“In other words, stop trying to tightly define everything and instead give employees the freedom to think and generate ideas,” De Ridder says. “That might mean encouraging your team to take a couple of days each month to step away from their daily tasks to think about how they would grow the company. What products would they build? Which strategies would they put in place? You’d be surprised by how many good, innovative ideas can come from that.”
Inaction is the Biggest Threat to Innovation
The good news, De Ridder says, is that the process of devolving from an agile expansion-stage company into a rigid corporate giant doesn’t happen overnight.
But if you find yourself heading down the slippery slope to becoming a sluggish Goliath, De Ridder says it’s critical to do everything you can to proactively regain your innovative spirit.
“It’s much harder to change once you’ve turned into a big corporation than when you’re going through the process of scale,” De Ridder explains. “You have to do everything you can to keep your innovative spirit alive. That requires a lot of directive action to stimulate entrepreneurial thinking, but it’s worth the effort in the long run.”