4 Ways Big Companies Can Use their Size as an Innovation Advantage

Many professionals working inside larger companies live with the perception that big companies struggle with innovation.  Instead, We are entranced with the image of the fast, nimble start-up that runs circles around big companies.  We have a romance with the group of dedicated underdogs that does something that changes the world; something big companies didn’t consider.

In reality, there are many big companies that are very good at innovation.  Companies like Apple, Google and Amazon have interesting work, even after they were worth several times the GDP of Lithuania.

There are a lot of good reasons for large companies to excel at innovation and the components of innovation in which many large corporations tend to have success.

People power

Big companies have lots of people.  Lots of skilled people.  In theory these people are all competent in their jobs, understand the issues and pitfalls related to their area of expertise on behalf of the company.  This should add up to a large population of people with a variety of skills and experiences and give a company a variety of different kinds of minds to draw from for ideas.

They know their stuff (literally)

Big companies tend to be good at their technology or service.  They know their products and services really well.  They got big.  That means a some point there was some mass of people in the marketplace who voted with their wallets that their offering was worthwhile.  It was worthwhile enough that they were able to amass money and people and resources to become a large corporation with a wide reach and number of customers.

They have been around long enough to know their marketplace.  In general, growth takes time.  The number of companies that get big overnight is tiny. Google was founded in  1998.  Amazon in 1994.  Dell Computer in 1984.  Apple in 1976.  IBM in 1911.

Time is on their side

What seems like an overnight success to us may seem painfully slow to the people running the business.   In the months and years it takes to get big, most companies are spending a lot of time thinking about, living with and marketing to the people that buy from them.

They have patience to mobilize for big endeavors.  The people aren’t different, but as an institution, big companies have experienced projects, markets, suppliers and just about everything else in the universe taking longer to reach some end than they originally thought it should.

They have created new offerings before.  At some point they had to create a first product or service.  Even if they were stealing the idea from someone else, they had to go through the steps to move from the decision to do business in a particular way, through development, manufacture, sales, distribution, revenue collection and all the ingredients that go into doing business.  Larger companies have done this many times.


Big companies have systems.  They have gotten from A to B so many times that they’ve developed standard ways for getting there.  They have moved beyond ‘let’s take that hill‘ and have created norms or even algorithms for completing a project.  Corporations will frequently also have a way to measure how they did getting there.

Big Companies are also better equipped to absorb failures.  If a new product or service doesn’t perform as expected, a large enterprise can move on to the next thing.  If the McSquid Sandwich doesn’t generate expected sales, McDonald’s simply removes it from the menu.  Next idea.  If a company has five products and one tanks, the impact is very different.

Big companies can and do generate innovation.  Still, far too many executives feel like they don’t get the value they should from their people and technology.  There are good reasons for this.  We’ll explore some of them in a future post.

Leveraging the advantage

If you’re a part of a large organization, here are three more thoughts for how you can immediately begin to leverage your advantages:

  • Know your people.  Too often large companies know their people by their job descriptions.  Try building a skills database.  Figure out what your key people know.   Find out their interests. What are they good at? Tap into the full range of your people’s skills and interests.  People will be more engaged if you recognize that they have skills and interests beyond their job description.
  • Use your incredible access to customers and suppliers to your advantage.  Make sure that you’ve got the customer as a constant advisor throughout the innovation process.  Don’t be satisfied with statistics and surveys.  Experiment.  Let them see your ideas.  Let them try prototypes.  Involve them in the process.
  • Don’t be too patient. Don’t be so quick to mobilize your resources into long term projects. There are advantages in small teams trying to reach quick conclusions.  Embrace a culture that allows experimentation and encourage fearless exploration.

There are some clues in these three items about where we’re going in the next post, where we’ll take a look at how big companies can act more like startups to capture more innovation.

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