Innovation Isn’t Tied to Size, but to Operating Rules

Studies and performance metrics have repeatedly confirmed that innovation is seldom proprietary to a given type of entity or dependent on a single context. The key for every firm — regardless of size — is to figure out how to consistently create value in a demanding, ever-changing market notes Nilofer Merchant.

One can find plenty of people who disregard bigger enterprises, stating they are not the future. Plenty of people espouse the theory that big companies can’t innovate.

This argument is both old and wrong. Joseph Schumpeter, the noted economist, said — in 1909 — that small companies were more inventive than large ones. But then, in 1942, Schumpeter reversed himself and argued that big companies had more ability and incentive to invest in new products. Today, there’s a similar bias; people assume that small companies are creative and big firms are slow and bureaucratic. A look at any performance measure shows that innovation can come from either size, and that both arguments are oversimplifications.

The key for every firm — regardless of size — is to figure out how to consistently create value in a demanding, ever-changing market. That is hard no matter what size you are, no matter what industry one is in.

Read full article » blogs.hbr.org/cs/2012/10…

 

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