Cake or Death? Does innovation always have to be born from pain?

In big companies, more often than not, innovation is the result of a Burning Platform. Some catastrophic event forces a company to change its ways or face death.

Does it have to be that way? Of course not.

If you are unfamiliar with the English concept of Cake or Death (thank you Eddie Izzard), you should take a few minutes to view this video. I’ll wait…

Just as everyone would choose cake, big companies can actually choose to innovate.

Let’s look at the status quo and compare big companies with startups. Simple question: when does each one typically innovate? Consider two variables: overall level of corporate health and level of innovation.

Big company first.

Big Company Innovation

Big companies innovate at the extremes of corporate health – when near death or out of hubris.

The norm is that big companies don’t innovate on a daily basis. Big companies only innovate at the extremes of corporate health. Either things are so bad, they have no choice (the Burning Platform), or things are so good that anything goes.

I suspect that fear of death generally results in more effective innovation than hubris, but I haven’t researched it in any detail.

Now let’s look at startups. When do they innovate?

Startup Innovation

Startups innovate across the spectrum of corporate health. Innovation usually stalls when death looms, or when the company is wildly successful.

Well look at that. It’s the exact opposite of a big company.  Startups are almost always innovating. The only way to stop a startup from innovating is to kill it, or make it insanely successful. Otherwise, it’s what startups do. It’s as much a part of a startup’s DNA as risk aversion and of fear of failure are a part of big company DNA.

Yes, these graphs are overly simplistic, but they are broadly true.

Now ask another simple question:

Wouldn’t it be better to innovate when you have resources and time, rather than when you are under the threat of imminent death?

Of course it would.

No data driven executive can deny that long-lasting major corporations have to embrace change. The evidence is overwhelming.

No rational person can deny that it would be smarter to allocate resources when you have the resources to spare.

So why don’t more companies embrace innovation?

 

I think it comes down to one simple thing:

 

You cannot seriously think about a future 5 or 10 years away when all of your efforts and compensation are tied to the next few quarters. 

 

That’s it. Just that. Startups dream big – they dream of the future. Big companies dream of now and the quarter that follows. I’ve said before that innovation is a process. Lifting your head above the quarterly trenches is an essential first step.

Wake up. Choose cake. It really is the better path.

 

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