Why can't big companies innovate?

From the case given in the article, we can see that the failure does not appear because of nothing. Though one of the seven sources of innovation is about process innovation, this one is not really the thing. When big companies are trying to innovate, they tend to be more conservative than those start-up companies. They don’t want to start from zero and prefer to use the resources they’ve already had. Therefore, when they try to innovate, they still can’t get rid of those bad things and their thoughts have been limited.

From my perspective, it is more like doing budget. Since large companies have such a long history and lots of data about their budget, they don’t want to start from zero and do zero-based budget, which needs them to put much more effort and resource in. They only like to do budget based on historical data, such as incremental budget, only change a few things and seems to be “more efficient” than zero-budget. However, it cannot make companies discover the inefficient things underlying the company, which will lead to hidden problems in the future. Though zero-based budget seems to be time-consuming and a waste of resources, it can help the company go through what they have and give them a better thought about how to make the operation better and more efficient.

In this case, what the company is trying to do is to avoid “waste of time and resource” and try to come up with what they have. They only focus on internal environment, instead of outside. The research of customer needs and market size they have missed are critical to its failure. It is not an innovation of new product; they just try to avoid the excess capacity they cannot take fully advantage of, and they don’t make it. If they want to do innovation for their products, they need to thoroughly analyze all the resources they have and the industry environment, the market, and even the economy and policy they have in the country they want to enter. And then they need to compare what they need and what they have got in hand to see the gap and to acquire other things.

I think innovate is not much more complex than take advantage of excess capacity and need to be treated well enough to really begin the innovation. Otherwise they can make extra revenue by undertake outsourcing orders from other companies.