Why Most Big Companies Fail at Innovation (And How 'New to Big' Fixes It)

Innovation failure in large companies is more common than success. But why? The answer lies in the fundamental mismatch between the existing operating system designed for scaling and efficiency and the new operating system required for discovery and growth. Without explicit permission and ownership from the top, innovation efforts become fragmented, underfunded, and ultimately ineffective.

Big companies excel at 'Big to Bigger'—incremental improvements and scaling proven products. However, they often neglect 'New to Big,' which requires a different mindset and processes. This conflict creates a cultural and operational tension that stifles innovation.

Leadership plays a pivotal role. CEOs must personally own innovation initiatives, set clear goals, allocate resources, and model ambidextrous mindsets. Without this, innovation remains a side project.

Psychological safety is another critical factor. Teams need to feel safe to experiment, fail, and share honest feedback. Organizations that punish failure or discourage risk-taking inadvertently suppress creativity.

Adopting a venture capital approach through a Growth Board helps manage risk by funding multiple small bets and rigorously reviewing milestones. This portfolio method accepts failure as part of the process and focuses on learning velocity.

Real-world examples include a Fortune 100 company that created a dedicated innovation team with executive backing, enabling rapid experimentation and new venture creation. Conversely, startups that fail to align on customer segments or timing illustrate the dangers of poor validation.

The path to successful innovation requires bold leadership, cultural transformation, and new operating models that embrace uncertainty and learning.

By understanding these dynamics and applying the principles from 'New to Big,' companies can overcome the innovation paradox and unlock lasting growth.

Sources: 1 , 4 , 2