After doing over 100 innovation projects with large organizations we know that size matters. Perhaps not in the way you think it does. Let’s dig into the problem of oversizing efforts in innovation projects and how to avoid it.
Both privately and professionally, we possess more square meters with fewer people per dwelling and own more stuff that we choose from an almost exponentially growing number of products and services. People will even cut back on necessities to preserve luxury. We are truly shaped by habits and expectations, which we mirror from other people and organizations thus making the digitally created abundance harder to handle than the industrial scarcity of the 20th century.
We don’t have inbuilt mechanisms to step down consumption, even in the best interest of our own physical health.Carol Worthman, Emory University
If we can’t regulate consumption in our private lives, how are we supposed to do it professionally with almost everything readily available?
This tendency of believing in big is linked to the human and organizational bias of overestimating the value of big things. Throughout history, trusting big things and consolidating families, cities and organizations made sense when we faced famine, wars, and natural catastrophes. Today, large organizations are trying to cope with globalization and digitalization by pouring what seems to be disproportionate amounts of resources into fewer large innovation projects. What is meant as an attempt to de-risk concept development and product launches have the exact opposite effect, thus making many large organizations behave like giant forks in a world of soup.
Unfortunately, organizations approach innovation and digitalization like they are drinking from a fire hose – they think getting a lot fast is the way. Fast is good, everything fast is not.
Clearly, R&D spending depends on industry and lifecycle stage of the organizations but it does not correlate with innovation and business performance. Today, lead times are longer, complexity is higher and resources are more concentrated than ever so new design principles are needed.
At Sputnik5 we believe in SMALL to be a core design principle as the smart inbuilt organizational mechanism for getting the right things done fast in innovation. By small, we mean that large organizations should:
- provide dynamic access to and increase the granularity of resources, i.e. smaller chunks of money, time and (a broader set of) data/tools for more employees
- distribute decision making to small and agile teams to avoid organizational drag
- spend as much time in the before and after phases of an innovation project as during to make sure that the right problem is solved and there are a place and resources for the output in the roadmap (and a contingency plan)
- maintain a prioritized backlog of small problems, possibilities, and processes
Strategically staying small does not mean resizing the overall company and not leveraging corporate resources but it does mean creating a more ambidextrous set up where at least 10% of all projects are a small but high risk and the rest are low risk. An often-copied strategy is long-term planning for the future but that often leads to option-blindness in a wild chase for minimizing risk.
Small is good. Not enough is just right. Think about how you can get as much as possible from as little as possible when doing your next project or designing innovation activities. The next big thing in innovation is a lot of small things.