|Any organization that wants to prosper through innovation faces 4 major challenges :
Newness; it is the answer to: How creativity was applied within your innovation? That’s to say, create new something (or new way to do that something) that has never been made and used before. To do this, you have to get the talent to design products/ services unconventionally or to combine what already exists and put it in a new context for a new use case.
Differentiation; when you are able to bring something totally different from what exists. A product or a service which can be seen as weird, but clients love it and use it.
Competitiveness; it is the force shown by the style of your organization. It is the ability to impose your style on the market. This can be measured through the number of firms that follow the way you do business and try to imitate your strategies, thoughts and talks.
Globality; it means to have the ability to cross the global market and attract customers worldwide. Innovation has no nation. Innovation belongs to the globe. Innovation is made by human, and it must be for human wherever they are. That is the function of globality.
So, as we see from what listed above, working innovatively has 4 functions that can not be easily achieved in a business which already grew up without innovation. Indeed, this growth may be the first barrier to innovation particularly for large companies.
When corporations reach maturity, they start losing the art of doing business, and focus on profit by producing similar solutions that should be sold at any price. That is the success definition within a mature organization as Maxwell Wessel – the Vice President of Innovation at SAP – mentioned in his article for Harvard Business Review [Ref 1].
Most often, an organization that makes a great turnover – whatever the approach that was used to achieve this turnover – does not understand the need for change. Change, is at the heart of organizational innovation. Those who see this truth and want to change, unfortunately they find themselves stuck in their old structure that does not allow any forward move and kills any creative attempt.
Therefore, large organizations which are recognized for their market leadership – especially those operating in the field of ICT – try to deal with innovation challenges by acquiring newborn start-ups and their teams, in order to help bringing change to inside.
For example, Israeïl – the first start-up nation – benefited from 5 billion dollars as the price for the sale of its start-ups to large IT enterprises (Facebook, Google, Cisco, Apple, ..) in 2013 [Ref 2].
This sales figure shows the strong trend of acquisitions of small start-ups in the global market. It tells obviously the interest of large organizations in taking advantage of start-ups’ innovations.
The reasons that may explain this fact are;
These start-ups are usually born within or after an innovation contest which is already being done to bring out new, different and competitive products and services in the global market. They are built – originally – on innovative structures. They consist of limited number of co-workers living within a networked team. That shape promotes social relationships and informal communication, which is very important for the activity of creativity.
A start-up is a flexible organization where there is no fear of failure, no routines, no heavy desktops, no hierarchy and no too much administrative stuff.
Such a structure allows people to be best risk takers, to make things from scratch and to thrive in scarcity.
Start-Up is a living framework for those who are able to think nimbly and move proactively, which is necessary for anticipating the market needs and offering attractive solutions.
Ref 1. WESSEL, M. (2012). Why Big Companies Can’t Innovate. Harvard Business Review, http://blogs.hbr.org/2012/09/why-big-companies-cant-innovate/, consulted on 25th March 2014.
Ref 2. SILICONWADI. (2014). Un service sur-mesure pour investir efficacement dans les start-ups. http://siliconwadi.fr/13546/un-service-sur-mesure-pour-investir-efficacement-dans-les-start-ups, consulted on 25th March 2014.