Last week I told you about a recent report from The Conference
Board that has a lot of big company CEOs concerned about competition
from smaller, more innovative and entrepreneurially-minded
companies. To refresh your memory, The Conference Board's CEO Challenge 2004 reported that 87% of
the 540 global businesses surveyed cited innovation and enabling
entrepreneurship as priorities for their companies, and 31%
considered these issues of "greatest concern.”
These CEOs understand that their big company status no longer
guarantees that they will win contracts and retain market
share based solely on their size and track record. They understand
that the greatest threat to their businesses is not coming
from the boardrooms of their largest competitors, but from
small companies born in garages, on kitchen tables, and in
tiny, rented offices.
It’s a fact that smaller companies, by need and design,
are more innovative, more flexible, more decisive, and faster
to move than their larger brethren who are entrenched in operational
processes and corporate procedures. Small companies
are typically not led by career executives for whom every
decision must be predicated by hours of meetings and mounds
of documentation. Most small companies are led by their founders;
men and women who were cut from an entrepreneurial cloth that
has yet to fade. It is when a company grows to the point that
the founder steps aside to make way for professional managers
that the company loses its innovative nature and entrepreneurial
flair.
The good news for large companies is that they have definite
advantages over small companies, especially when it comes
to resources and funding. Turning a Goliath into a raging
horde of David’s is never easy, but it can be done if
the company is willing to make changes to internal processes
and attitudes, and commit the time, money, and personnel to
make it happen.
Since size and number of years in business are no longer differentiators
in the competitive marketplace what must large companies do
to become more innovative and entrepreneurial? To begin they
must do three things: shorten the process time, cut through
the red tape, and promote innovative and entrepreneurial thinking
from the top down. If the board, the CEO, executives, managers,
supervisors, and employees are not dedicated 100% to making
the changes necessary to transform the company, the effort
will fail and the giant will lumber on.
Shorten The Process Time
At large companies everything is done by the book, i.e.
by established processes and procedures. Very little gets
done at large companies without what I call the “Multiples
of M.” Multiple Meetings to discuss the issue; Multiple
Memos to reiterate the issue; and Multiple Management approvals
required to sign off on the issue. To become more innovative
and entrepreneurial large companies must streamline the
decision-making process down to a single set of M’s:
Move on or Make it happen.
Cut Through The Red Tape
Here’s a true example from my corporate days that illustrates
how procedures and red tape get in the way of efficient
operations A fluorescent bulb in my office blew, which made
the other bulb in the fixture flicker like a strobe light
at a discotheque (causing flashbacks that we won’t
discuss). I assumed getting a new bulb would be a simple matter of calling
down to the facilities office and reporting the problem.
My assumption was wrong. I was told that I would have to
come to the facilities office, which was in another building
2 miles away, fill out a facilities request form, and take
the form back to my immediate supervisor, who was required to stick
his head in my office to confirm that the bulb was indeed
out before signing the form. I assume this was to make sure
that I was not trying to commandeer a fluorescent bulb under
false pretenses.
Once my supervisor confirmed that I really did need a new
bulb, he signed the form and I took it back to the facilities
office, foolishly thinking that they would hand me a bulb
that I could take back to my office. Oh no, that would have
been too simple. I was told that once my form was approved
by the facilities manager a maintenance worker would be
dispatched to my office and would replace the bulb for me. Great, I said. When can
I expect that to happen?
“I can have someone over there a week from Tuesday
between noon and 5pm,” the man at the facilities desk
replied. I suddenly felt like I was dealing with the cable
company. How many big company employees does it take to
change a light bulb? I lost count at four.
Encourage Innovation and Entrepreneurial Thinking
Next, you must create an environment in which innovation
and entrepreneurial thinking are encouraged and rewarded.
If your employees feel that their opinions, thoughts and
ideas don’t matter, they will not submit them to you,
but may take them elsewhere.
Again, based on my own experience, I can tell you that innovation,
especially innovation that occurs below the management level,
is often ignored, ridiculed, and in some cases, used as
an excuse to give employees the boot. The perfect example
of this was when I took an idea on how to improve an internal
system to my manager and was told, “Knox, you think
too much.” Now this was a new one on me. I had been
accused of thinking too little and of not thinking at all,
but never had I been accused of thinking too much. I do
recall my dad telling me when I was young, “Son, if
you had a brain you’d be dangerous.” I suppose
my manager was simply trying to relay the same message.
“Shut up and go to your room/cubicle like a good little
boy/company drone before you get on my nerves and get spanked/fired.”
Within a few months I decided to take my overactive brain
and put it to work for myself. After 10 years of business
success, I think I made the right decision.
To promote innovation and entrepreneurship big companies
must encourage everyone to think like innovators and entrepreneurs.
Make it a company policy that such thinking is required,
expected and rewarded. Pose these questions:
(1) How can we improve our current products and services;
(2) What new uses can you think of for current products
or services;
(3) What new products and services can you think of that
would be good additions to our current offerings or perhaps even launch
a new line;
(4) What new opportunities do you see in the market place
that might be worth pursuing?
Get Outside Help
Most large companies find it difficult to develop and implement
an innovation plan simply because they refuse to devote
the time and resources to getting it done. And since most
executives have never been entrepreneurs, they do not know
how to encourage entrepreneurial thinking among their ranks.
If your company needs help with innovation and entrepreneurship,
bring in someone from the outside to direct and manage the effort
for you.
You should never be embarrassed to ask for help, no matter
how big you are.
