Tons of tech innovation is hidden inside large companies. It goes unrecognized because it’s hard to reveal, and nobody’s looking for it.
Big companies are prisoners to the innovation narrative.
Wall Street loves companies it can classify as “pure plays,” which means they do obvious things in focused ways. Tech startups, or any company that uses data as its raw resource and final output, are among the more pure. Many have users that aren’t connected to any revenue, and others have revenue that makes no impact on profits.
They are idea stocks, promising that those financial metrics that once mattered in the past will somehow materialize in the future.
It’s easier for media to tell these stories, too, because they can report on vision and change, which make for great reading and watching. Whatever the companies actually do, if they do anything at all, is but a hint of what’s to come.
Disruption rules most innovation narratives because it’s better entertainment content, and an easier pitch for a stock sale.
Large companies tend to fight back against this conceptual bias by spinning off businesses into stand-alone entities, so their stories can be simplified, like GE may do now with its new CEO (or what Alcoa did recently). Conversely, they emulate the activities of those pure plays while also trying to conduct actual business, which makes their stories more complicated.
Both gestures are kinda doomed, at least as communications strategies.
Stand-alone companies are still encumbered with paying customers, operational controls, and all of those nuisances that arise from being in business for real, so the “reality discount” still gets applied. Operationalizing those what-if tech ideas tends to highlight the conflicts between that reality, and what some imagined future might look like, so the stories are garbled, even if they include all the “right” words.
Established companies just can’t act like startups, which means much of the innovation at those businesses stays under the radar.
They need a new vocabulary.
It’s not like big companies aren’t trying to send their way out of this conundrum. Between contests, startup storefronts, collaboration platforms, and the obligatory partnership agreement with IBM’s Watson, many billions are spent annually on trying to get innovation recognized and valued.
It must be so frustrating when company X still gets featured in a news story or analyst report as the potential victim to some sort of disruption someday from somewhere, or its glossy startup beauty pageant and owned web content doesn’t earn an uptick in stock price.
Maybe it’s time to innovate how big companies talk about innovation?
Read the entire essay at Linkedin