How Leaders Can Drive Change and Innovation in Big Companies

Jun 29, 2015
8 Min Read

Start-ups are known for being agile, creative and innovative. For big organizations, it can be more difficult to embrace such a mindset as they struggle to break entrenched thinking and overcome sluggish processes. But many leaders of large companies say they must become more entrepreneurial and adopt the start-up mindset if they’re going to survive.

In 2013, Campbell Soup Co. launched its “Hack the Kitchen” contest to challenge innovative developers to create web or mobile apps for mealtime solutions. The winner, FoodMood, tapped into user’s emotions by asking “What’s your mood?” and the app then suggested recipes based on the user’s feelings and food preferences.

FoodMood, developed by Pollinate Inc., received a $25,000 cash prize and a $25,000 contract to bring the idea to market.

But perhaps more important, Campbell Soup – with more than 19,000 workers – decided that it wanted outside innovators to create new ideas.

Campbell’s is not alone. General Electric is partnering with students and entrepreneurs to help them create new products.

"The first lesson we learned was don't just talk about it, meet about it, think about it -- just go do it," says Venkat Venkatakrishnan, GE Appliances Innovation Leader. "It's something we don't do very well. We tend to evaluate all the risks, look at everything...the local startup community goes and builds something, does something, and figures out the rest."

Campbell and GE are big companies looking to adopt a more innovative, agile mindset that permeates start-ups, and more organizations realize they need to do the same in order to survive.

“Truly creative business leaders engage less-conventional partners, such as citizen developers, and entrepreneurs to help drive innovation,” notes VentureBeat.

In addition, an IBM trend study of more than 1,500 companies found that those who excel in business goals partnered more creatively with outside organizations and recruited less traditional partners for their efforts.

Driving change

Clearly, there are challenges for big organizations that want to become more entrepreneurial and respond quickly and efficiently to new ideas in order to stay competitive. Brad Smith, president and chief executive officer at Intuit, recently noted that implementing change is not easy, partly because teams “seek routine and repetition – hoping to avoid changes in priorities, team members, or resource allocation.”

The job of leaders, Smith says, “is to fight these natural headwinds and proactively create the change necessary to keep their organizations on the leading edge.”

So how can leaders move employees faster to adopt a more entrepreneurial mindset? Consider:

  • Using the right words. A recent report in the Academy of Management Journal supports the notion that leaders in big organizations must push for change and new ideas – but success may depend on their approach.

For example, the study found that one executive spent two years writing and re-writing her 20-word statement for employees articulating her vision. Researchers found in a random look at more than two dozen Fortune 500 leaders that when leaders rely on concepts to communicate their visions for a company, it is not as effective as when they use imagery. So a leader saying he or she wants the company “to become the world’s leading seller of luxury goods” isn’t as effective as saying he or she wants to “see customers smiling as they leave our stores,” researchers say.

  • Looking for the right mindset among employees. A Gallup study of small businesses found that highly talented entrepreneurs were, among other things, more likely to clearly articulate the competitive advantage of their companies to their clients and were more likely to make decisions about pricing and service development with customers in mind.  Zappos CEO Tony Hsieh explains why he really likes being around entrepreneurially-minded people. “It's really just about having that right combination of creativity, and optimism, and street smarts. I like being around people who will do whatever it takes to help make something happen,” he says.
  • Asking questions. Smith advises that it’s a “good rule of thumb” to engage employees early and often when they’re being asked to change. “Change is a team sport, and it’s important to bring people along for the journey. I’ve seen too many leaders hunker down in conference rooms, attempting to divine the perfect change journey, while their employees fill the communication void with misinformation,” he says.
  • Creating a sense of urgency. An Accenture survey finds that 85% of respondents say that employee ideas are mostly aimed at internal improvements rather than external ones. That can have dire consequences for even the biggest organizations as the average lifespan of an S&P organization is now 15 years, compared to 67 years in the 1920s. Smith urges that leaders treat change “as a hypothesis, with clear expectations around what the change is designed to improve, and measure it as you go. If it isn’t working as planned, diagnose root cause and adjust.”
  • Making competition fun. Richard Branson, founder of Virgin Group, says that his global company has “had many battles with our competition – and we’ve welcomed them all.” While friendly competition can sometimes escalate “into antagonism,” he believes the key to such scenarios “is knowing when to take a stand, and when to laugh it off.” He even suggests making a wager with the competition to maintain “a competitive spirit” and “having some fun along the way.” Take your competition seriously, he says, “but not yourself.”

Mark Zuckerberg, Facebook co-founder and chief executive, is often quoted on the importance of having a more creative and forward-thinking workforce. In one of his best-known quotes, he says that it’s important to “move fast and break things. Unless you are breaking stuff, you are not moving fast enough.”

The question is, how many leaders in big organizations will take that to heart?

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