The Benefits Of Innovating Inside An Established Company And What It Takes To Get Them

There is a popular myth that all the advantages of innovation accrue to startups. When people hear commentators say that innovation happens at the edges, there is an assumption that the only companies that can reach those edges are startups. This is not necessarily true.

In Driving Innovation From Within, Kaihan Krippendorff makes a compelling case for why the advantages of innovation accrue to established companies. He evaluated research from Wharton Business School on the Top 30 Innovations Of The Last Thirty Years. Krippendorf found that over 70% of these Top 30 Innovations were conceived, developed and commercialized by employees working in large companies.?

This seems to be a counterintuitive finding. But is it really that counterintuitive?

The Benefits Of Innovating In A Large Company

There are several benefits of working on innovation inside a large company. These benefits mostly accrue from the success that the company has had in the past. The job of the corporate innovator is to leverage this success and help the company navigate into the future. There may be more, but below are three key benefits of innovating inside an established company versus a startup:?

1. Brand: Startups are virtually unknown and are building up their brand reputation. Most established companies have a well known brand with a strong reputation.?
2. Resources: Most startups, particularly in the early stages, have limited resources and access to human talent. Established companies often have access to large financial resources and world class talent.??
3. Market: Startups are usually fighting to grow their market position and access to customers. Most successful companies have an established market position with access to customers.?

Having these three benefits is something that a lot of startup founders would “trade their right arm” for. Their job as a founder is to create and grow these benefits within their startup. If you are innovating in an established company, you have access to these benefits on day one.?

What It Takes To Get Them

Being in an established company does not mean that you will automatically get access to the benefits. I have worked with a lot of innovators that are isolated from the core business and have no access to these benefits. To be fair, some of these innovators isolate themselves in an innovation lab where they try to keep the rest of the business as far away from them as possible!?

I believe that this is a mistake. What is the point of being a corporate innovator if you don’t benefit from the resources inside the company? You might as well go and work on a startup.??

You have to be good at building relationships with your colleagues inside that core business. This is what it takes to get access to these benefits. The ability to work with colleagues in functions such as sales, marketing, finance, legal and human resources will unlock access to customers, the brand and funding.?

This is the paradox of being a corporate innovator:?

You have to be simultaneously good at entrepreneurship and corporate politics!?

A rare creature indeed!??