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 recognize the need for change even when it’s staring them in the face.
The first way is in smaller companies there is a feeling of everyone working together and being on the same page. When there are only ten people in your company, there’s little need for everything to be departmentalized. Sure, some staff members 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 organization.
Creativity is also in high 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 emphasis the importance of innovation within their employees contracts and even make it part of their job description.
Smaller companies are a lot easier to manage. 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. 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.