A recent Accenture survey “Corporate Innovation is Within Reach: Nurturing and Enabling an Entrepreneurial Culture,” underlines just how hard it is for people to develop new ideas in a corporate environment, other than in companies like Google and 3M that have gone all out to nurture innovation.
Accenture wrote its report on the survey as a kind of wakeup call for big companies: If they don’t encourage innovation, they are at risk of driving their most innovative employees out the door and losing their edge to foreign competition.
What I saw in it was a compelling argument to ditch corporate America if what you really desire to do is innovate. You’re just going to end up seething in frustration at your desk everyday, while the action happens at other, more nimble companies.
For its survey, Accenture polled 600 corporate workers and 200 “corporate decisionmakers” — as well as 200 self-employed people.
Most of findings suggest that corporate environments are squelching grounds for the innovative. Among the corporate employees:
* 77 percent say that new ideas are rewarded only when they are implemented and proved to work
* 27 percent have avoided pursuing an idea within their company because they think there may be negative consequences
* 42% believe that tolerance for failure is important to support innovation, but only 12% believe their company is does a good job of providing this
* 93% pursued an entrepreneurial idea within their previous company — and 98% believed those ideas were successful
* 57% said their company was not supportive of the results
I should point out that there was some good news in the survey:
* 52% of those surveyed had pursued an entrepreneurial idea within their company — and 72% had it implemented
* Companies have gotten better in supporting entrepreneurialism than five years ago, according to 53% of respondents
* 69% of the decision makers said that an entrepreneurial attitude is important among individuals in a corporate environment.
As the report puts it, “A good place to start would be to help employees learn how to generate the right ideas. A resounding 98% of those whose ideas have been implemented believe their ideas have been successful. In reality, a good portion of employee-generated ideas just aren’t good enough in management’s view. And sometimes these ideas might be less relevant. For instance, they may be too internally focused to support a client’s external needs.”
The consultancy’s advice is to work with employees to help them focus their ideas so they are better aligned with a company’s strategic goals and should provide training to help them focus on the ideas that have the best chance of success. Accenture goes on to recommend that once a company commits to an idea, “companies must create a safety net to identify missteps and help employees get back on track when they falter.”
While this approach may make the idea of supporting innovation palatable to big-company operations teams who don’t want any money to be spent on a single idea that goes nowhere, it doesn’t address the fact that in companies that are actually entrepreneurial, this isn’t how innovation takes place. There is risk involved. There’s no way to take that out of the equation. That’s part of the reason entrepreneurship can be so exciting. It takes people–and companies–to the edge.
Having interviewed hundreds of entrepreneurs every year for more than 15 years, I can’t recall a single entrepreneur ever telling me that he or she was trying to encourage the company’s employees to learn how to generate the “right” ideas. Entrepreneurs understand that there’s an inherent value in experimenting and that even ideas that go nowhere now may bring about learning that sparks the company’s greatest innovation. They don’t see tinkering as wasteful or wrong. They love to break rules–and they like to work with people who think the same way.
While great entrepreneurs generally have strategic goals, they’re not worried about keeping everyone on their teams in lockstep with them. They recognize that some of the company’s best ideas may come from someone who doesn’t think in the same way as everyone else–and aren’t worried about creating a safety net to save employees or the company from the messiness of trying a new project that ends up sputtering. If a project turns out to be a dud, everyone moves onto the next thing.
Of course, entrepreneurial companies typically don’t have to account for every dollar spent to shareholders who do not want to see a company’s employees playing around with their money–the very pressure that keeps big companies from being creative. Corporate workers clearly get this: The survey found that the top two benchmarks they cited for a new innovation to be successful were that it contributes to the bottom line and makes the company more efficient.
Here is my recommendation to giant companies that want to encourage innovation: Cut the CEO’s salary in half. Put that money in an R&D fund, overseen by a board of seasoned entrepreneurs and investors from outside of the company. Ask employees who have an idea for a new product line or service to write business plans and pitch their ideas to this board. Give the employees who come up with the ideas that get approved the majority of the equity–so they have an incentive to focus on ideas that will pay off, just as entrepreneurs do–and reserve the rest of the equity for the company, with a very small portion for the board, as compensation for vetting all of the plans. The blockbuster ideas will have a big payoff for the company even if it is a minority investor.
Meanwhile, if you are a corporate employee who wants to act on your great ideas, here’s an idea. Instead of getting depressed after your boss says no to your next brainstorm, channel your creative energy into finding a job at a company where entrepreneurial thinking is part of the culture–or team up with some other creative colleagues and start your own business. You’re not likely to get a chance to do something ground breaking at a corporation that wants everyone to focus on the “right” ideas.