There have been many recent discussions about the slowing of innovation in larger firms and, conversely, how quickly small firms and start-ups seem to create new ideas and products. I’ve seen innovation hampered by a one size fits all development model.
The one-size-fits-all development model can hinder innovation in the smaller organizations within a large, multi-industry corporation. It does not matter if these diverse teams are designing helicopter components, polymer fibers, or circuit boards. All teams will us the same process flow. The staff of the functional team (in a matrix or SILO’d organization) is satisfied because everything is uniform. The finance department is satisfied because they just saved headcount.
However, the manager at the business unit level (aka profit center) that the engineering department that supports can no longer meet goals because what used to take 6 months to develop, now takes 18 months. To make matters worse, while his design cycle went to 18 months, the competition’s design cycle is now 6 months. In 5 years, the competition will release 10 new products, and he will release 3 products.
The impact of this difference will impact the short- and long-term financial performance of the division. It will also appear that the firm is incapable of keeping pace with the industry. Regardless of how large and successful they have been, the perception is that they are no longer the leader and once the leadership position is lost, it is difficult to capture it again.