Law of Big Numbers Kills Innovation
I just read a comment by Mike Hess in my 15inno group on LinkedIn. Mike is Vice President for Innovation Excellence at Medtronic and he is a very experienced corporate innovator worth listening to.
Mike commented on my blog post on the differences between big and small companies and this is what he wrote:
“Large companies also can become paralyzed by the law of big numbers, that is they are looking for a certain amount of growth and it is difficult to think of many “small” initiatives as the right way to reach that goal, so in the interest of focus and prioritization they will seek out several large opportunities – small companies may find an opportunity the large co discarded very attractive on a relative basis and pursue it with success.”
Mike’s comments took me down memory lane to a longer-lasting consulting assignment that I had with the corporate venture unit in a large Danish company. This corporate venture unit fought hard against the law of big numbers. Their strategy was to keep their small projects at arm’s length from the big corporation itself and to educate the executives on how to see and assess value in small projects with a radical promise.
I have a question for you. What can corporate innovation units do to avoid being sucked into the law of big numbers? The corporate venture unit could keep things at arm’s length because this is what such a unit is often built for and they took on the challenge of educating the executives. What else can be done?
It would be great to hear some insights and experiences on this.
P.S. Unfortunately, the mentioned corporate venture unit closed during the recent crisis, which made me loose some faith in this model for innovation. Check this post: Is Open Innovation Replacing Corporate Venturing?
Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation
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