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How to Stop Growth From Killing Innovation

Scaling up your company should be paramount. Just don't let innovation take a back seat.
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It's a little talked about secret in the startup world: Growth doesn't always beget growth.

Scaling a company is exciting, but paradoxically, growth can limit your company’s ability to innovate--and, well, grow.

You or your employees don't become less creative. But with growth, it can be more difficult to harness the creative spirit. With growth, you face the impact of size.

Organizational psychologists and organizational behaviorists have long studied the tendency of growing organizations to inhibit the very creative energy that allowed them to achieve success in the first place. At their very heights, organizations regularly smother the innovative seed that led to their initial success.

As your organization becomes larger, here are four tips for maintaining your innovative edge:

1. Encourage creativity.
Often as organizations become larger, there's a tendency to compartmentalize--creating separate departments, functions, and sectors. Inevitably, organizations reinforce the notion of "turf," as everyone hunkers down carrying out their unique function in their particular segment of the organization. Coordination between departments continues, but you lose the informal chitchat, the noise, the exchange of ideas, the sporadic discussions that can lead to new ideas and new directions.

This improvisation is often the backbone of activity. What's lost is the informal networking that allows for this creative energy. In the maze of large organizations, you may achieve a degree of coordination, but you'll likely lose some of that innovation muscle.

Bottom line: It's crucial that as a leader, you don't let growth kill the informal chatter that's the essence of innovation.

2. Set short- (and long-) term goals.
As the organization expands, there's a tendency to put in place metrics that will hold everyone accountable to specific outcomes and accomplishments. This drive for accountability and need to quantify results often leads to short-term thinking. The more you judge activities under a tight metric, the more people focus on the short-term--what's measurable, deliverable, and immediately practicable.

Bottom line: As a leader, make sure that people focus on the short-term, but give them space to think about the long-term.

3. Avoid customer domination.
Clearly, customers are important. You’ve grown because you focused on customer needs, and you delivered. But your customers want what your customers want. They see the world from the perspective of their immediate necessity. You have to look beyond that. You have to ask yourself not what your customer wants today, but what your customer wants in the future.

The best way to make this happen is to provide customers with what they want immediately, but you also have to apply resources toward developing solutions to future customer needs.

Bottom line: By acquiescing to all customer demands, your company may limit its ability to think about the bigger picture.

4. Sell solutions, not products.
Organizations are often built on the sale of specific products or services. Larger organizations usually have a sales force used to selling a conglomeration of products--some related, some not.

To save time and hurry to their next sales meeting, your sales team wants to sell off-the-shelf products--especially if they have set sales goals. If your sales team pushes a one-time fix and doesn’t work with a customer to create a solution, new, innovative ideas may never crop up.

Bottom line: Get out of your own way.

IMAGE: Corbis
Last updated: Apr 28, 2014

SAMUEL B. BACHARACH | Columnist | Director, Cornell's Institute of Workplace Studies

Samuel B. Bacharach is the McKelvey-Grant professor in the department of organizational behavior at Cornell University's ILR School, and is director of Cornell's Institute for Workplace Studies in New York City. Among his books are Get Them on Your Side and Keep Them on Your Side. His latest volume, A Good Idea Is Not Enough: Leading for Change and Innovation, will be published this November by BLG.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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