When it comes to innovation, does size matter?

For some time now in my role as a professor of innovation I have been coming across big companies who seem to think that size is a problem when it comes to this key concept.

They claim that unicorns owe their rapid growth and ability to innovate and launch new services and products to being small, agile, or in some cases because they are not subject to the same regulations as bigger, longer-established players.

Of course size is an important factor: it does affect flexibility and the ability to do certain things, and it also makes companies tend toward copying other systems, while at the same time, more rules are needed to organize their complex structures. But overall, their size also gives these companies more resources, easier access to credit, the ability to attract talent, and being able to negotiate with suppliers and clients, among other things.

In fact, until recently, big companies were seen by talent as offering more career opportunities and more money. What’s more, many big companies boast about their size: the senior management of one very large Spanish company I know likes to turn up to meetings with comments like “Of course we can do that: we’re XXX!”

But increasingly the feeling is that the unicorns are eating the dinosaurs, a clumsy metaphor, but one that expresses the fear that these small rapid companies are taking over: I hear it in just about every sector, from fintech to the car industry. And when you ask people in fintech how they did survive, they tend to smile and say that in large part their success is due to having people with the right experience that they’ve been able to sign up… from the traditional banks.

In large organizations, it has to be said that specialization and a waning vision of the company as a whole is almost inevitable. But if the problem in developing innovative structures and competing is size, then isn’t that simply accepting that all companies that are successful and grow are doomed to ossification sooner or later?

That is simply absurd: there are large companies that have show the ability to come up with new ideas and that have managed to balance muscle with innovation. In fact, some of the most innovative companies in the world are among the biggest.

The simple truth is that the idea size is an obstacle to innovation is simply an excuse. The real reason some companies fail to innovate is, for example, because they don’t have clear priorities. And sometimes it is because those priorities signal that maintaining the status quo is more important than innovation, which is often seen as dangerous or foolish, and at best should be assigned to small departments that nobody listens to.

If innovation is so important for the future, then perhaps what needs to be done is to segregate structures and create spinoffs that can innovate on the sidelines of an organization that doesn’t want to, although doing this is in itself a recognition of failure. Equally, the board needs to establish clear guidelines and priorities (that’s why they’re called managers, right?) so that those who don’t see innovation as a priority will see that there is no place for them in the company.

Let’s face it: when the alternative is isomorphism, then innovation has to be the priority, at all costs. And for as long as your company doesn’t innovate, you’ll continue to feed the fallacy: “the thing is that we’re very big and we can’t innovate.” Meaning that you’ll continue to lose your best and brightest employees, who will be seduced by the possibilities for innovation in other companies (there are few things as frustrating as being good at your job and wanting to innovate but being held back), while you are left with the dregs, the sediment that doesn’t want to risk it out there in the real world. And like the fallacy, you’ll continue being big, but for how long?

(En espa?ol, aquí)