Quick: List the big companies that have launched paradigm-shifting innovations in recent decades. There’s Apple – and, well, Apple.
The popular perception is that most corporations are just too big and deliberate to produce game-changing inventions. We look to hungry entrepreneurs – the Gateses, Zuckerbergs, Pages and Brins – instead. The rise of fast, nimble and passionate venture-capital-backed entrepreneurs seems to have made slow-paced big-company innovation obsolete, or at least to have consigned it to the world of incremental advances.
But Apple’s inventiveness is no anomaly; it indicates a dramatic shift in the world of innovation. The revolution spurred by venture capitalists decades ago has created the conditions in which scale enables big companies to stop shackling innovation and start unleashing it.
Get business news first
Sign up to SmartCompany’s daily newsletter
Three trends are behind this shift. First, the increasing ease and decreasing cost of innovation mean that startups now face the same short-term pressures that have constrained innovation at large companies; as soon as a young company gets a whiff of success, it has to race against dozens of copycats. Second, large companies, taking a page from startup strategy, are embracing open innovation and less hierarchical management and are integrating entrepreneurial behaviours with their existing capabilities. And third, although innovation has historically been product- and service-oriented, it increasingly involves creating business models that tap big companies’ unique strengths.
The evidence is compelling that we are entering a new era of innovation, in which entrepreneurial individuals, or “catalysts,” within big companies are using those companies’ resources, scale and growing agility to develop solutions to global challenges in ways that few others can.
Medtronic’s healthy heart
Medtronic is as far from a startup as one can imagine: founded in the late 1940s, it is today the world’s largest stand-alone medical device manufacturer, with $16 billion in revenue. It is best known for its implantable pacemakers and defibrillators. The Healthy Heart program seeks to bring pacemaker technology to hundreds of thousands of Indians who desperately need it.
In late 2010 I visited The Mission Hospital in Durgapur, a modest town by Indian standards (population about 1 million), nestled in India’s northeast corner. During my visit I saw a pilot of Medtronic’s innovative business model in action. The company had drawn on pioneering Indian healthcare models to help TMH design new ways to serve low-income patients. Heart disease is prevalent in India but diagnosis is not, so Medtronic created diagnostic camps to identify potential patients. I saw one camp in a rural village where technicians used low-cost electrocardiogram machines to screen dozens of people in an afternoon and wirelessly send their EKGs to be read by doctors hundreds of kilometres away. Insurance is still rare in India, so Medtronic had to make its pacemaker more affordable. It worked with a local partner to create India’s first financing plan for medical devices.