How to avoid big company syndrome

If you define innovation only in product terms, you’re leaving enormous potential on the table. Define innovation for the everyman to open up companywide creativity.

Over the past few years, I’ve had the chance to work with a number of small to medium-sized companies, mostly private. Coming from a background of working mostly with much larger, publicly traded organizations, the change has been refreshing. Things happen more quickly, ideas flow more freely, and the atmosphere is in general more invigorating.

Still, I’ve detected a sentiment, a feeling – sometimes verbalized, but mostly unvoiced. As a business begins to grow beyond a startup into early maturity, and the danger of survival is replaced with success and more abundant resources, it sounds like this:

“Our entrepreneurial spirit isn’t quite what is was when we were a startup. Sometimes it’s completely MIA. More and more, we seem to need more money, people and space to innovate. But that’s not how we started. OK, so we didn’t start in the proverbial attic or garage, but we started with little of everything: money, space, labour. We had a goal and a passion for reaching it. Those limits made us more creative and resourceful than we are today. Today, the addiction to resources is blocking innovation.”

That kind of message is symptomatic of what I call big company syndrome, an innovation malaise often prevalent in large corporations. It goes something like this: Constant, company-wide innovation is no longer something requested, managed or measured at the organizational level. Therefore, the desire for personal reward and recognition drives an informal system intended to produce a promotion and bonus.

These things result in a strong program mentality: sell a program up and request more resources in the form of bodies and budget, regardless of whether it adds value. Approval is assured because it produces a favour owed and supports the boss’s own career ambitions. Objectives now become focused on meeting budget projections.

Company expenses then rise faster than sales and add further complexity. That limits organizational effectiveness, requiring even more work to execute the program, leading to yet further requests for more resources. When costs swell, senior management puts the squeeze on to stem the tide. Speed bumps get erected, usually in the form of additional project approvals. Valuable ideas get iced along with circumspect programs. Eventually, the ability to flex, react and innovate is lost.

It’s something many big companies struggle with. Compare that to a young, nimble and hungry startup, organized around customer-focused goals, projects and processes, not functions. Projects have a clear start and stop, so resources are mobilized to match the need. But at some point, the startup grows up and becomes vulnerable to big company syndrome. So how do you know if your company is heading toward big company syndrome?

There are at least a couple of ways. First, listen for early warning indicators. You can hear big company syndrome start to creep into the language people use when you pitch ideas: “I’m OK with how things are.” “I think this will make things worse.” “We’re already on another track.” “We don’t have buy-in to do this.” “That may work elsewhere, but not here.” “We tried something like this before.” “Yeah, but …”

Sound at all familiar? If so, then you need to move quickly and stop the syndrome before it spreads and takes a firm grasp. There are several signs that Big company syndrome has a toehold in your business. I call them the seven signs of innovation anemia, and you can course-correct fairly easily if you’re able to recognize them when they appear.

1. Identity crisis
Many companies struggle to identify what their innovative strength and style is. Look back at your founding roots to discover your innovation DNA. Are you a human needs-based innovator? A market-driven fast follower? A leading-edge technologist? Eliminate or radically reduce efforts and initiatives that don’t play to your natural strengths and who you are as an innovating body.

2. Inaccessible definition
If you define innovation only in product terms, you’re leaving enormous potential on the table. Define innovation for the everyman to open up companywide creativity. Try something simple, such as “innovation is the implementation of creative concepts that are both novel and useful.” It’s easy to understand, in user-friendly language, yet with two clear criteria.

3. Unfocused strategy
Can you articulate the answers to the essential questions of any strategy: Where will you play and how will you win? Like any strategy, innovation strategy is a question of focusing resources, which is something different than prioritization. It’s the ability to identify what you’re going to say no to.

4. Inconsistent method
The ability to consistently take concepts from inception to commercialization (or value delivery if non-revenue-focused) requires a consistent creative approach. As with the identity crisis issue, pick a method suited to your genetics and culture. For example, if you’re a human-centred innovator, try design thinking.

5. Weak experimentation
Remember how you started? Little in the way of resources, running simple, fast and frugal tests of early stage prototypes in an effort to prove your concept. As companies expand their ranks and founders move further from users, there’s a tendency to adopt a ‘conceive and go’ stance, forgetting the more scientific approach that brought success in the first place. The mindset can’t be “Now that I’m successful, I know what will work and I’m going to ensure it does.” It has to be “I think this may work, so let me try it out.” Never let go of the ethos of experimentation – and if it’s slipping out of your grasp, redouble your focus on rapid prototyping and testing.

6. Talent mismatch
Companies love to move high-potential managers into roles related to managing innovation. Those folks are great at plans and budgets, great at execution, great at growing lines of business. But what do you think they’re going to do when you move them into the messy and uncertain world of pursuing mysteries and creating something new? They’re going to try to plan, budget, execute and obsess over revenue realization. Remember that innovation is about rapid learning, testing and failure. Keep the convergent thinkers planning and executing, and keep the divergent thinkers in their sweet spot of ideating and experimenting. Team them when the time is right for a winning combinations.

7. Weak ideas
A strong idea answers three major questions. Is the concept a fit for our organization? Does the concept solve a problem in an innovative way? Can the concept be scaled effectively? For a portfolio of stronger ideas, reverse any of the previous six signs you believe to be present in your company.

Like any ailment, Big company syndrome is easier to prevent than to correct – and much easier to correct when it’s caught early.

Matthew E. May is an internationally recognized thought leader on strategy, innovation and lean, and is the author of five books, including Winning the Brain Game, which encapsulates more than a decade of experience in helping teams develop elegant solutions to difficult problems.

Strategy+Business, Rotman Magazine, Fast Company, 99U, and INC.