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On Fri, Oct 23, 2009 at 1:17 PM, Richard Pieri <richard.pieri-Re5JQEeQqe8AvxtiuMwx3w at public.gmane.org> wrote: > On Oct 23, 2009, at 12:43 PM, Bill Bogstad wrote: >> It doesn't actually say that large companies don't innovate. ?It >> suggests that they tend to only innovate in ways that are desired by >> their largest customers. ?As a secondary effect, since the largest >> customers are often large companies which also > > And yet, today, large companies are some of the biggest innovators in > their respective areas. ?You just never see most of it because it > doesn't make slashdot's headlines. ?At the same time, some of the > smallest companies do nothing but buy patents and extort (or litigate) > royalties for them. ?You can't look at the size of a company as a > benchmark for innovation and fun vs. depressing monotony. ?To the > contrary, a large company probably has many small operating units. > Some of those may be crushingly monotonous; others dynamic and > innovative and fun and challenging. The book wasn't written by reading Slashdot. It was the outgrowth of a Ph.D thesis in how companies react to opportunities to innovate. To the extent that sociology, economics, business has rules (more like probabilities) this appears to be one of them. Hell, even much of what we consider the 'rules of physics' are often just probabilities. My understanding is that quantum mechanics says that lots of really weird things are possible, they are just VERY VERY VERY improbable. > >> do the same you end up with a decided lack of innovation in large >> companies. ? If a company has revenue of $10 milllion dollars a day, >> then it's not worth a senior manager's time to approve a change that >> will save the company $100,000. ?And >> the answer will be NO if you can't prove that your change won't >> negatively affect that $10 million a day revenue stream. > > That has absolutely nothing to do with the company's size. ?That's > senior management. ?Like I said the first time. I disagree. Senior management has only so many minutes to spend every day. At a large company, $100,000 decisions are just not worth their time to analyze. This is no different from the fact that most people don't spend lots of time optimizing where theybuy gas for their car. The principle remains the same only the scale has changed. For various reasons, innovation usually starts small (not applicable to a large customer base, uncertainty about risks/rewards) and therefore never gets the go ahead within a large organization. The size of the company inherently forces only 'big things' to be given the green light at the highest level. A really good company might allow more autonomy at lower levels then a bad one, but they still aren't going to be as flexible as a small one. They can't afford to risk their large revenue streams. Particularly when it comes to anything viewable to the external world. It seems to be the received wisdom from marketing (also not a rule/just probabilities) that providing too many competing products via the sames sales channel just results in customer confusion and your competitor ends up making the sale. Personally, I like 'high information'; but from watching the rest of my family/friends/acquaintances; I appear to in the minority. (And thus not a good candidate for MegaCorps next 5% growth target. There just aren't enough of me.) Bill Bogstad
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