Innovation is not a luxury anymore, its a must for the companies to be competitive and survive in the cu
ent environment. In traditional corporate structures, there are countless business controls, applied universally, that work to defeat and slow innovation. IBM’s experience shows that it is possible to create a corporate culture in which compliance and innovation co-exist, and even support one another, allowing the company to create
eakthrough innovations again and again (Meyerson, 2016).
The innovation activities differ vastly between a small and larger organization, however it's the responsibilities of the leaders to understand the nature of the business, culture, size etc to determine what works best and enforce the innovation. Firms vary on a number of structural dimensions that can influence the amount, type, and effectiveness of their Innovation. Key structural dimensions include centralization, formalization, and standardization (Schilling, 2017).
Centralization vs Decentralization: Centralization is the degree to which decision-making authority is kept at top levels of the firm, while decentralization is the degree to which decision-making authority is pushed down to lower levels of the firm. Since small firms operate in a very decentralized manner, they are considered to promote innovation.
Formalization and Standardization: These are closely related to the structural dimensions of organizations. The combination of formalization and standardization results in what is often termed a mechanistic structure.Since Mechanistic structures achieve efficiency by ensuring rigid adherence to standards and minimizing variation they are often deemed unsuitable for fostering innovation. Organic structures that are more free-flowing, and characterized by low levels of formalization and standardization, and are considered better for innovation.
These dimensions are important to understand because large firms generally have greater use of formalization and standardization which hinder innovation. Many large firms attempt to overcome some of this rigidity and inertia by decentralizing authority to promote innovation. As per Meyerson, IBM has put a great emphasis on selecting, recruiting, training, motivating and engaging the most important aspect of the innovation, and that is people. IBM has a program called University Relations, which had 400 people around the world, volunteers, working with 3 to 4 universities each, managing programs in a total of 1,600 universities. This is a primary source of IBM's university engagement and talent. Over the years, IBM's R&D efforts have evolved to become globally dispersed facilities deeply embedded in their local geographies, integrated with local universities, commercial partners, governments, and clients.
At the same time, IBM has several internal programs that they created to encourage the big bets on innovation that help facilitate their long-term goals. These are programs were set up to help keep the enterprise vital and innovators engaged and productive. These programs promote radical ideas, providing innovators the space and the resources required to explore something that has no guarantee of working but would move the needle materially for the world should it pan out. IBM Watson is one of those innovation, which has been named as the winner of the best innovation in the deep learning (IBM, 2018).
Initially, I want to use the knowledge from chapter 2 to analyze the different innovation between big firm and startup in four dimensions and analyze the suitable innovation activities of big firm and startup meanwhile.
Radical innovation versus incremental innovation. The incremental innovation is suitable for big firm because the incremental innovation requires the company to have an existing product in addition to an experience in innovation management in order to benefit from it. Large enterprises do have their own product lines and development process that is already established for each product. The process of developing the existing products is part of their development stages. (Rafiq n.d.) However, the radical innovation suitable for startup. For large enterprises, disruptive innovation means allocating resources from existing successful products in other high-risk products that may or may not achieve success in the market. In contrast, the disruptive innovation can present an opportunity for startup companies since their resources are fresh and they can allocate it toward a new product development. (Rafiq n.d.)
Competence-enhancing innovation versus competence-destroying innovation. Only big firm can start the competence-enhancing innovation, because the startup less of technology accumulation. Nevertheless, competence-destroying innovation is not the exclusive right of startup. We can think about the corporate transformation such an old case - IBM, who transfer from Hardware manufacturing to consulting in the last century (Joseph, 2012), and a recent case – Netflix, who transfer their business from offline to online and build up a Streaming media empire (n.d. 2016).
Architectural innovation versus component innovation. Also, only the big firm can start the architectural innovation, which involves change the overall design of the system means only the well established the large enterprises can do this from that they have more resources and other R & facilities (Essays, 2018).
Product innovation versus process innovation. Process innovation is hard in big firm because companies are designed to resist change and people are incentivised to keep the status quo in big firm (Sanders, XXXXXXXXXXBut the startup is better due to the organizational levels layered and the flexible structure.
In addition, when I
owsed the
ief introduction of big firm’s innovation department, I found that big company more focus on the basic science. Take IBM as an instance. IBM present research directions are focused on data science, quantum computing etc., which need a lot of fund to support. Large company scale is more valuable than ever, not only just capital, but also can collect big data to improve and support their technology. In this way, startup may should avoid the innovation related the basic science.
So, how can a startup outperform a multinational firm? We need to analyze the pros and cons first. Advantages of multinational firm is economic advantages (cost and tax), acquiring political advantages, socio-cultural advantages (easy to enlarge in new country) and adequate funds (Essays, XXXXXXXXXXBut startup can catch the niche market, which big firm ignored, and use the suitable innovation, which analyzed above, as radical innovation, component innovation and process innovation, to achieve amazing innovation. On the other hand, startup can use the its advantage – flexible. Using the tactics of “take small steps, but run fast, and iterate quickly”, encouraging the startup to try as many directions as possible with low cost, until the product or service meet the demand (刘润, XXXXXXXXXXIn addition, the global Internet can offset the advantage of multinational firm in a way.
Example 1-
During my research, I learned that it is not just the big companies that can benefit from big data. Persons just like you and I can also gain something from this emerging trend. Have you ever used Google Translate? If you replied yes, then you my friend have accessed the benefits of big data. “Google’s translate service studies millions of other pieces of translated text or speech, to determine the most accurate interpretation” (Ma
, 2017, Google section, para. 3). Yes, it is true that the typical household user of Facebook ® or other social media sites will not run algorithms of huge data sets to determine the best day of the week to advertise peanut butter, but a mom may notice that several of her peers are gaining donations through fundraising efforts and will tailor a direct message to those on her friend list. It appears social media is here to stay, use it sparingly and only present what you want the whole world to see or know about you.
References
Ma
, B XXXXXXXXXXWant to use big data? Why not start via Google, Facebook,
Amazon, (Etc.). Fo
es, Tech, #BigData. Retrieved from
https:
www.fo
es.com/sites
ernardma
2017/08/14/want-to-use-big-data-why-not- start-via-
google-facebook-amazon-etc/#25d7dba83d5d
Example 2
I echo your concern about privacy on the internet, but I will ask the hard question. Is there such a thing as privacy on the internet? I fear that Pandora’s Box has already been opened. Facial recognition software is in full use, so merely by attending a company party, you could inadvertently be in the background of a “selfie” shot and now you are online. “Advanced technologies pioneered by Facebook include image recognition – a Big Data technology which teaches machines to identify the subject or details in a picture or video, by training it with millions of other images” (Ma
, 2017, Facebook section, para. 3). What is the proper course of action? Do not go to parties? Of course not. With everything else in life you have to take the good with the bad, just be smart about it. Only “friend” those persons online that you would actually invite into your home to share a meal. Do not post that you have yoga every Tuesday at 10:00 am. The list goes on and on. Anyway, I am not on Facebook, so therefore my risk is limited.