Mar
08
2009

David vs. Goliath

In this post I will give my answer to the question where innovation takes place: in big or in smaller (ict-) companies? An all-or-nothing answer doesn’t seem feasible to me, because we all know examples of big as well as smaller companies that are innovative. But I still think it might be interesting enough to write a blog post about (of course), because I think some differentiation can be made.

First the cause of me asking this question. During the drinks after a guest lecture by my colleague André Boonzaaijer, I got into a conversation with a student. During the conversation I noticed he had the idea that innovation is something that takes place mostly at bigger ict companies. I tried to make clear to him that I think smaller companies are normally more innovative. I have not told if I think Sogyo falls in the class of smaller or big companies, but compared to the Logica’s, Capgemini’s, etc. of this world, we are of course a little bit smaller (95 employees).

Before we begin, a short question of definition: what do I mean with big and small? With that, I mean primarily big in the number of employees. Corner cases excluded, this mostly also means that a certain revenue is made, a certain age is reached and certain amount of overhead has come up in the forms of management layers and a partitioning in departments and business units. I would call a company big if it has more than 150 employees. Above that, it will occure that some people don’t know each other while working at the same company, so anonimity begins to rise.

Ok, to the point. What are the arguments that I make for the innovativity of..

.. big ict companies?

  • Normally, more budget is available, so new but expensive technologies can be bought.
  • Normally, more labor is available, so innovations that take a lot of effort can be tried out simpler and faster than in a smaller company.
  • The chance that somebody is available with the right knowlegde for an innovation, is bigger
  • Specialisation is normally greater in a big company, so that a greater part of the employees should be at the state of the art in their specialisation.

.. smaller ict companies?

  • They are more inclined to develop their own atmosphere, pride and character. A style of their own might lead to their own, possibly new way of doing things.
  • Smaller companies seem to draw employees that are more concerned with the wellfare of their company, colleagues and profession. It is of course easier to be concerned about a company with a certain character. And concerned and enthousiastic employees go on if they see a chance, be it after five or not.
  • Employees that start at a smaller company will have the characteristic of not being afraid to take the risk of starting at a relatively unknown company. Being able to take risks is a good trait when you want to be innovative.
  • In a smaller company, employees get tasks with a wider differentiation, because the divisioning of tasks cannot be performed as rigorously as at a big company. This keeps open opportunities of cross-fertilization between disciplines and innovation over the whole of the chain of development
  • Fast decisions. The newest technologies can be used. In production.
  • Innovation is the reason a lot of smaller companies exist. The founder has an idea and wants to develop it and see it grow.
  • The typical client is smaller and has smaller assignments. Because of that, the proportion of projects will be smaller in which proven scalability and robustness are the most important requirements. This eases the introduction of new technologies.

Conclusion
A bit lame, but true any way: bigger as well as smaller ict companies can be innovative, of course. I think that smaller companies tend to have the characteristics for innovations in product development and bigger companies tend to have those that favor innovations in underlying technologies. What do the readers think? And has it played any part in your choice for your current employer

Written by Rick | Tags: , , , , , |

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