It's a rarely questioned mantra--small companies, almost invariably, are more innovative than larger ones. Without layers of bureaucracy or thick encrustations of habit and naturally attractive to risk-taking types, small firms are in a much better position to be agile than their corporate competitors. At least that's what conventional wisdom says.
The only problem, according to angel investor and startup adviser Jocelyn Goldfein, is that this really isn't true.
Small companies can be just as stodgy and stuck in their ways as big ones, she wrote recently on Medium. It's just that we generally hear only about the innovative ones that are successful, not the ones that have died from rigidity. This myth, she continues, lures a lot of founders into a false sense of security.
You can't rely on your company's small size to keep it innovative.
Things that won't keep your company innovative
Nor can you rely on other factors that are routinely trotted out as good guarantors of innovation. For instance, "avoiding 'big company people' isn't going to save you, because the self-same employees who are innovating and taking risks with you today are going to become risk averse and careful once they start failing--and sooner or later, they (and you) will fail," she warns.
Equity and other financial incentives are unlikely to be a magic bullet either, especially as a company grows. Even in the earliest, riskiest stages, "founders who've been through a few pivots know that equity isn't what kept employees by their side through the resets," Goldfein insists.
How about hiring folks who have never failed? Forget about it, says Goldfein. "Their courage can have a buoying effect on everyone else--but they too will become risk averse over time as they encounter failure," she explains. Ditto with the ever-popular solution of a "permission to fail" culture. Why won't that work? The high standards that make for a great early-stage employee tend not to be at all compatible with a comfort with failure. You can't get that great borderline obsessiveness in a team member without its coming bundled with aversion to failure.
So what does work?
So does Goldfein just shoot holes in every oft-cited solution to keeping a company innovative? As entertaining as that would be, that's not all she has to offer. She closes her in-depth post (it's very much worth a read in full) with one suggestion that just might work.
"The most lasting way I've found to nurture the spirit of innovation is to hire people who hate to fail, and build a culture that picks people up, dusts them off, and encourages them to try again when failure occurs," she advises. "It's not enough to say, 'Well, we don't penalize failure.' You don't have to. Even if you don't fire employees or dock their bonuses for working on a failed project, the kind of people who care deeply and passionately about their work will penalize themselves, with feelings of shame and loss."
Nor is it enough to wait until a project fails and then offer reassurances that all is OK. "Not much rings more hollow than 'Attaboy! We'll get 'em next time!' at the project's cancellation," she insists. The solution? "You have to bake resilience into your culture from the very outset," she concludes.
Facebook's well known slogan "Move fast and break things" is a great example. "No company writes 'Move slow' on the walls. But if you write 'Move fast' by itself, your company will eventually slow down anyway," she writes. Instructing people that it's OK--even good--to break things from the outset is essential.
Do you agree that with Goldfein that this is one of the only approaches that can actually stop your company from succumbing to the inevitable human fear of failure?