Innovating in Large Companies

Cagan argues that innovation is harder in large companies because growing organizations become risk-averse, but it is still possible and essential. He says corporate culture and one's manager are the biggest factors affecting an individual's ability to innovate. Drawing on his HP Labs experience, he offers practical techniques that individual product people can use even when the environment is unsupportive. The core message is that large companies need innovation to keep growing and that employees can create it from the bottom up.

01Key takeaways

• Expect large companies to resist risk, and look for ways to pursue innovation regardless.
• Ask for a 20% time policy that includes product managers and designers, not just engineers.
• Once an idea is proven under the radar, it is usually much easier to secure funding and support.
• Watch real target users, not early adopters or colleagues, to find frustrations and unmet needs.
• Innovation is often solving an existing problem in a new way rather than an entirely new problem.
• Build relationships with promising startups, since acquisitions can bring in both technology and people.

02Key sections

Why large companies struggle to innovate

Large organizations have more to lose, so they grow conservative and protect what they already have. The author notes that innovation still matters because a large company gains real advantages from shipping products.

Innovation via the 20% rule

Giving staff a fixed share of their time for self-chosen projects lets many bottom-up ideas get tried. Ideas from people who own them tend to be pursued with more passion, and the author says the policy should cover product managers and designers too.

Innovation via skunk works

Skunk works means pursuing ideas quietly outside normal bureaucracy. Once an idea is proven, funding is usually easy to get, though the company typically owns the resulting intellectual property.

Observation, UX design and acquisition

Watching real target users reveals frustrations and unmet needs, and questioning the implementation model can expose better user experiences. Acquiring startups that test risky ideas, and building relationships with them, is another legitimate route to innovation.

03From the post

“A partnership dedicated to teaching best practices to product teams and product leaders”

04Frameworks mentioned

Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.