Large companies can innovate. Hewlett Packard, 3M, Apple, Microsoft and IBM, for example, make great play out of their ability to invent new products and services. Companies such as Broadcom and Cisco have been able to continually re-invigorate themselves with highly successful acquisition strategies, often buying start-ups, and implicitly admitting they need innovation from outside. Nevertheless, there is a widespread acceptance that truly new ideas, new product designs, or new ways of delivering a product to market overwhelmingly come from small organizations.
Silicon Valley was a hotbed of start-ups in the '70s, when a much smaller Intel was one of the first companies to bring the microprocessor to market. Surely, this can't be true in the semiconductors business, where we would expect high barriers to entry to favor large, well-equipped companies with savvy management and highly skilled engineers? In fact, it is.
The tradition has continued with ARM in the '90s, which was one of the first companies to make a big success of the intellectual property (IP) licensing model for chip designs. In chip design, as in most other businesses, start-ups can be competitive, and often lead with new architectures and system concepts.
Let's be clear about this. it's not because people in big companies are not smart. Some of the cleverest of engineers and managers work for big companies. Nor is it because these talented people do not have good ideas. The fact is that all really radical new ideas are creative and destructive at the same time. The processes in large companies tend to discourage the adoption of new technology or products where the profitability of existing business lines are threatened. All large businesses are inherently conservative and tend to reject the implementation of any new idea unless it builds upon or complements existing products or services.
Why should we care? Small companies invent a new product or way of doing business, become successful, and get big. The more innovative people get frustrated and leave to start a new company. If the new company is successful, it in turn will grow big and become boring to work for, and so on. The cycle repeats. This is just the way it is, isn't it? Why should we care?
We should care, I believe, because it's such a waste of talent if a large company can't utilize the abilities of its people and successfully engage and involve them. I know a number of my peer group who work in large technology companies and some, like me, who work in start-ups. The people who work in start-ups work hard, but feel they are really contributing their skills to a worthwhile endeavor, and they know where they fit in. They get frustrated, sure, but it always seems to be about important things-employees, customers, distribution, strategy, technology. The people who work for the big companies often work just as hard in terms of hours put in, but feel a much greater percentage of their time is spent non-productively, especially on internal meetings and internal decision making procedures. The things they worry about are internal: How's my visibility with the board? Will my department budget grow this year? Will I lose responsibility for EMEA Sales? Am I secure after the next acquisition?
Another reason we should care is that the difference in personal risk for an employee between a start-up compared to a large company is starting to narrow. IBM or Intel may be less likely to lay you off than a start-up over the next five years, but I suspect the difference in risk is not as great as some people may imagine. If what I say is true, then large companies will have to become as engaging and as much fun to work for as smaller companies. Otherwise, why work for them?
Finally, I personally should care because, as my company grows and becomes more successful, we need to avoid the situation where we lose people (including me) because we've become too tiresome to work for.
Graham Dodgson is executive vice president of marketing and sales for Aspex Technology Ltd., Uxbridge, U.K.