How Fortune 500 Companies Promote Innovation From Within?
Innovation is critical for companies to stay competitive and continue growing in today’s rapidly changing business landscape. Large, established companies often face the challenge of sustaining innovation as they mature. However, many Fortune 500 firms have found ways to encourage innovation from within through thoughtful programs, structures, and cultures. Here are some of the key ways these companies promote internal innovation.
Establishing Dedicated Innovation Teams
Many Fortune 500 companies have created dedicated teams or departments focused solely on innovation. These groups are given the funding, resources, and mandate to experiment with new ideas and technologies that may not have an immediate clear business application. For example, Amazon has the Amazon X division that works on future technologies like delivery drones. Google’s X Moonshot Factory explores seemingly impossible ideas like internet-beaming balloons. By housing innovation teams separately from daily operations, companies give these groups more freedom to think outside the box.
Fostering Internal Startup Cultures
Some large companies develop “internal startups” that function like independent small companies within the corporation. Employees are given the creative license to rapidly develop new products without facing the bureaucracy of the larger organization. For instance, Intuit fosters “designated for disruption” teams that have their own budgets, leadership, and flexible processes to experiment with innovative financial products. These internal startups are encouraged to think big and move fast without the red tape that can stifle innovation at scale.
Providing Innovation Resources
Fortune 500s spur innovation by providing their employees with resources to experiment and invent. 3M gives researchers 15% “free time” to work on whatever project they want, leading to Post-It Notes and more. Google offers employees innovation time off to explore their own ambitious ideas. And Intuit holds regular internal innovation competitions to fund the best employee ideas. Providing such resources signals to employees that innovation is valued and empowered.
Cultivating Innovation Culture
More broadly, leading Fortune 500 companies shape an organizational culture where innovation is prized as a core value. From onboarding to everyday operations, innovation-focused cultural values are instilled across the company. For example, Apple fosters an almost startup-like culture driven by creating insanely great products. Pixar’s animated films are created through a collaborative, creativity-centered culture where everyone’s ideas contribute. By making innovation a cultural pillar, companies encourage all employees to think boldly and not settle for the status quo.
Breaking Down Silos Through Collaboration
Large enterprises can often become siloed into rigid departments that hamper the cross-pollination of ideas necessary for innovation. To combat this, some Fortune 500s proactively tear down walls between teams through cross-functional initiatives. For instance, Nike formed a cross-company consortium called the Innovation Kitchen to facilitate idea-sharing and problem-solving across its various departments. Breaking down silos helps spark internal collaboration that spurs innovation.
Leadership Commitment to Innovation
For innovation to infuse any large company, it must be championed from the top down. Fortune 500 leaders like Apple’s Tim Cook and Microsoft’s Satya Nadella have demonstrated personal commitment to innovation by embedding it into corporate strategy and allocating resources to support new ideas. They also exemplify innovative thinking in their own approach to running the company. When leadership makes innovation an executive priority, it signals to employees that forward-thinking ideas are valued across the organization.
Promoting Intrapreneurship
Some companies promote “intrapreneurship” — giving employees the drive and tools for innovation management to take an entrepreneurial approach to internal innovation. They may be encouraged to identify customer pain points, propose new product ideas or processes, and even launch their ideas like a startup. For example, Mastercard holds intrapreneurship bootcamps and has an ideas submission program open to all employees. Where as AT&T uses InspireIP to capture innovative ideas from employees. By empowering employees to view themselves as entrepreneurs within the company, innovation can happen at any level.
Partnering with Startups
Increasingly, large corporations are collaborating with promising startups to stimulate innovation. They may run startup accelerator programs, make direct investments in startups, or acquire startups altogether. For instance, Coca-Cola partners with startups through its Founders platform to gain exposure to new technologies in the food and beverage space. Fortune 500 companies can tap startups to infuse fresh, agile innovation thinking internally.
Connecting Innovation to Customers
Truly innovative companies don’t lose sight of the customer amidst ideation. They continually connect innovation back to solving customer needs, pains, and problems in new ways. Proctor & Gamble takes this customer-centric approach to innovation across its consumer packaged goods brands. By linking innovation to customer value, they ensure new products don’t end up feeling incremental or irrelevant. Maintaining this customer focus helps large companies retain their innovative edge over time.
Encouraging Smart Risk-Taking
Innovation ultimately requires taking smart risks and learning from mistakes. Companies like Amazon and Google have adopted the mindset “it’s always Day 1” to keep experimenting with the same boldness as a startup. Fortune 500 leaders encourage employees to take prudent risks in pursuit of game-changing innovation. By balancing risk-taking with analysis, large companies can continue pioneering breakthrough innovations even as they grow.
The most successful and enduring Fortune 500 companies view innovation not as an occasional project, but as an embedded business capability. They bake it into their culture, invest in resources to support it, and make it a priority from the executive suite to the frontlines. While daunting in large organizations, cultivating grassroots innovation ultimately fuels sustainable growth and competitive advantage. With thoughtful leadership and intentional structuring, any mature company can unlock innovation from within.
Some additional examples of successful innovation initiatives in fortune 500 companies
Apple Inc.
Apple Inc. is renowned for its innovative products that have revolutionized the tech industry. One of the key drivers of innovation within Apple is its commitment to a culture of design thinking. By focusing on user experience and aesthetics, Apple has been able to create products that not only meet customer needs but also delight them. Apple’s innovation is driven by its ability to anticipate customer desires and develop products that surpass their expectations.
Amazon
Amazon is another Fortune 500 company that has embraced innovation as a core value. Amazon’s success can be attributed to its relentless focus on customer obsession and its commitment to experimentation. The company encourages employees to take risks and fail fast, recognizing that failure is an inevitable part of the innovation process. Amazon’s culture of innovation is evident in its continuous development of new services and technologies, such as Amazon Prime, Kindle, and Amazon Web Services.
Google is known for its innovative approach to problem-solving and its emphasis on employee empowerment and autonomy. Google’s “20% time” policy allows employees to spend 20% of their work time on projects of their choosing. This policy has led to the development of innovative products such as Gmail and Google Maps. By giving employees the freedom to explore their passions and pursue their own ideas, Google fosters a culture of innovation that drives its ongoing success.
