We have seen many giant companies faded away in the market.
Kodak, Nokia, Blackberry. It is interesting that those companies who created
the market or at first were so big in the market couldn’t survive at last. Why
is that?
Maxwell in his blog asked, “Why big companies can’t innovate?”
I see this question as an answer to my question. The failure to innovate in big
companies may be one of the reasons that these companies went away. However, it
is unfair to say that big companies can’t innovate. But it is a common phenomenon
that it is much harder for big companies to deliver and deal with high quality
innovation, not mention disruptive innovation. Maxwell stated reasons that
cause this phenomenon.
Big companies which have a mature business model and company
structures put “profit” as the joint basis of innovation with “solving problems”.
This adds distractions to innovation and makes this kind of innovation less influential
to the market. Operational efficiency is one way to achieve higher profit. Like
the blog says, big companies tend to set taking advantage of existing resources
as the premise of innovation. Under this premise, big companies have higher possibility
in delaying adopting newer technologies and disruptive innovations. Nokia and
Blackberry are laggards in entering smart phone market and touch-screen devices
market. The same thing happened to Kodak. Kodak invented digital camera, but
refused to go after this direction since the new direction will cause great
waste of its existing resource.
I never doubt about big companies’ ability in innovating. A big
company has better access to resources such as intelligence resource. Smart people
go to big companies for better compensations and future. Also, big companies
usually have great and right vision of their future and direction. The ideas
they build have great quality. However, once the motivation of innovation is
not pure anymore, big companies will have limitations in delivering or commercializing
an idea, just like what happened to Gerber Singles.
Besides the topic, I found the Gerber Singles a very good example
of company going after customer segment first instead of value proposition and
key activities as we talked about in the business model canvas discussion. In the
case, Gerber found the customer segment, the busy working Americans, very
attractive and the needs of this customer group haven’t been fulfilled yet. With
the target customers, Gerber started thinking what they could do to win the
market.
Reference
Maxwell Wessel, “Why Big Companies Can’t Innovate?” http://blogs.hbr.org/cs/2012/09/why_big_companies_cant_innovate.html
