Enterprise Innovation – Why is It So Hard?
It’s tough to beat a big company that has a big idea. But often a large enterprise struggles with timely ideation and innovation, despite having some clear advantages over smaller organizations with fewer resources.
One reason, of course, is the sheer size of a large enterprise. It’s notoriously difficult to turn a big ship quickly, even in a blue ocean full of opportunities. Once an enterprise-level business sets a course, it configures its vast resources to reach that goal as efficiently as possible. All of this takes time and in today’s fast-paced business world, time is the enemy. In the time it takes to achieve that initial goal, markets and customer preferences can change and new opportunities arise. However, change can create significant risk and expense, because altering course can be disruptive and adversely affect people and processes.
Another challenge to rapid enterprise innovation is the complex organizational structure that goes hand-in-hand with big business. Layers of bureaucracy often lie between doers and deciders, requiring a great deal of time for ideas and communications to percolate through the organization.
Those are just two of the stumbling blocks that can trip up enterprise innovation. Others include:
- Too many decision-makers
- Decision-makers with limited availability
- Inability to choose the best project path
- A corporate culture that doesn’t value speed
- A demanding project management process that requires detailed pre-planning, inflexible technical requirements, and hard deadlines
“Do the simplest thing that will possibly work.”
That is the mantra of smaller, more nimble entrepreneurial businesses. These lean, little organizations are often staffed with a handful of experts comfortable with making fast decisions and willing to quickly abandon unpromising projects in favor of others that produce demonstrable results. They embrace a culture of rapid innovation via incremental development in which failures are instructive and used to focus efforts faster on more successful opportunities.
In contrast, large enterprise innovation typically employs traditional, linear development methodologies such as waterfall, whose model favors highly detailed RFPs, lengthy product requirement lists, and disparate development efforts focusing on various product features simultaneously. The result is that no one functional slice of the product is 100% done, so no meaningful testing and evaluation can take place until the entire project is completed. Mired in operational challenges and a lack of urgency, large enterprises often end up with undifferentiated and irrelevant products, delayed launches, high team turnover, and missed strategic goals.
Fortunately, there’s a way to avoid this.
There’s a proven approach to rapid, reliable innovation that works regardless of enterprise size — it’s called Scrum. It’s the leading framework used in modern, agile software development and it utilizes cross-functional, self-organizing teams that break their work into a series of timed iterations called sprints. The concept of sprints is to focus development teams on producing a working, tested product at the end of each iteration. The Scrum approach not only makes innovation faster and more predictable, it also encourages the development of products with real business value that’s demonstrated with every iteration.
In our next post, we’ll take a deeper dive into the agile methodology behind Scrum and how agile can help large enterprises consistently create significant returns on new product development.