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Why Small Companies Can Out Innovate Big Corporations

Is it better to be big or small when it comes to innovation?

16Jan

The general consensus is that startup companies are more capable of innovating than their larger counterparts.

Despite this, it's been reported that many executives in small companies feel that innovation is only really possible for multinationals who have the finances to fund a research and development department and a collection of data scientists.

In reality however, the situation is much different. Startups are often inherently more innovative, as larger companies often fail to recognise the need for change even when it's staring them in the face.

In this article we will look at some of the reasons why being a startup can make innovation easier;

All Together Culture

When there are only 10 people in your company, there's little need for the everything to be departmentalised. Sure, some staff will concentrate their efforts more on sales and some will be more involved in marketing, but there will be a continual overlap where every employee has at least some knowledge of every aspect of the organisation.

This is important because it gives a company the capacity to expose the entire company to creativity, not just small sections of it. This means that they can draw on a wide array of perspectives that allow for innovation initiatives to be as rounded as possible.

Additionally, the fewer members there are in the team, the quicker innovation efforts can be executed, meaning that ideas are as fresh as they could possibly be.

Creativity Is A Contractual Demand

It would be counterproductive for a multinational company to make creativity an evaluation criteria, as appropriating success would be impossible due to the scale of the company's operations.

This however isn't the case for smaller companies where each and every employee can be judged by their impact on the company's creative edge. This means that small businesses can emphasise the importance of innovation within their employees contracts and even make it part of their job description.

It's Easier To Measure

This may seem obvious, but measuring the impact of innovation is easier when you have ten employees when compared to a company that has over ten thousand.

Even if an employee comes up with a golden idea, in bigger companies there's always the chance that it'll go unnoticed, or even if it is noticed, make such a small ripple in the pond that they feel that all their effort was in vein.

In smaller companies, it's possible that your ideas will be put into effect almost immediately, you'll be able to get real-time feedback and watch first-hand how your efforts are affecting the company.

The fewer employees you have, the easier it is to encourage innovation. People can see their ideas taking effect and they can also play an active role in their implementation.

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