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Innovation And The Challenge Of Growth


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Constant innovation is a characteristic of most successful growing companies. Competitive advantage requires inventiveness at individual, group, and company levels. As companies grow, market demands and competition will force them to maintain a culture of continuous innovation. Growth, however, also creates a need for structure and control, which can make a culture of innovation difficult to sustain.

Loss of flexibility

Sustainable growth requires increased operational scale, but companies cannot scale their operations effectively without implementing formal structures and processes. Growth can strain the entrepreneurial philosophy that has fuelled a company’s success. More importantly, it can erode corporate flexibility. As management layers increase, they create pockets of data, knowledge, and intelligence that can complicate a company’s decision-making processes.

Aversion to risk

Developing new ideas is a risk-intensive process that requires significant resources. As companies grow, their risk profile becomes more conservative as shareholders expect them to stabilise operations and manage their business according to (rigid) financial criteria.

Friction between cultures

As companies grow, they require people who can guide them through each stage of their organisational development. However, companies also have to evolve to meet changing internal and external priorities. As a result, a company’s culture is pulled two ways. Established employees may be used to a stable and familiar environment, and newer employees who have a different mindset, a higher tolerance for risk, and place less value on organisational structure. Left unchecked, this dichotomy can cause a company’s culture to be dictated by employee self-interest rather than corporate objectives.

Rising to the challenge

Sustaining an innovative culture requires companies to create environments where creative thinking is central to corporate values, actions, and assumptions. Innovative companies require employees who seek new opportunities, accept risk, collaborate well with others, and commit themselves to the organisation. Innovative companies also require leaders that will work to create those kinds of environments and will guide and promote innovative behaviour. Finding these leaders is often the most difficult challenge that a company will face during a period of growth.

Derek Cheshire is an expert, speaker, consultant and facilitator in the areas of Business Creativity, Innovation and Idea Generation. He is creator of the Innovation Toolkit, and co creator of workshops such as Creating The Difference, Creativity as a Business Tool, Sticky Strategy and The Idea Factory.

You can receive regular ideas and updates on Business Creativity and Innovation by visiting http://www.creative4business.co.uk and filling out the simple sign up form.

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  • Posted On December 29, 2006
  • Published articles 283513

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