Whether you call it imagination, innovation, or creativity, more and more large corporations are looking for ways to encourage the entrepreneurial spirit in their employees. They are beginning to realize the advantages small start-ups have over their big brothers. From the various forms of hardships small business face every day, innovation is born. How can you duplicate that creativity with big safety-net budgets and rigid structures? Simply put, you can’t.

Stating innovation as a company goal won’t do it. Even demanding your giant staff to be more innovative won’t do it. Sure, you can give bonuses and awards to corporate staffers who come up with ideas that save money or increase sales, and that will set a good example for others to follow. But even then, the big corporation can’t hold a candle to the innovation required of the little guy just to stay in business. In fact, most big companies acquire their good ideas from the acquisitions of smaller businesses.

So how can the big guys become more entrepreneurial? What lessons can they learn from the little guys and employ in their big companies to allow, encourage, and grow innovation?

We found 7 ways big companies can become more entrepreneurial. Briefly, they are: 1) Cut the Budget, 2) Change the Structure, 3) Change the Culture, 4) Allow Leap-Frogging, 5) Change the Legal Paradigm, 6) Solicit, Recruit and Award, and 7) Create a Skunk Works. In the next several posts we will examine these suggestions and how they benefit larger companies, but we begin now by challenging the funding.

1. Cut the Budget. If necessity is the mother of invention, being undercapitalized is surely the father. When your big company’s staff knows that they will get paid whether or not they are resourceful and innovative, there is little incentive for them to do so. When their budget is based on what they spent last year, how are they encouraged to reduce their spending?

We had a war vet working for us on a project a few years back. He was a helicopter repair mechanic in the front lines and couldn’t get parts from the large, lumbering military operation he depended on. So, he built them! We know of many successful sales people who make their own signs and sales materials because the ones they got from the marketing people are no longer relevant or effective, given the changing conditions in the marketplace.

Small businesses have to make due with limited resources. That requires being creative, imaginative, and cooperative. In the process of being undercapitalized, an interesting thing happens. Small businesses discover new ways of doing things that break the mold and sometimes, reform entire industries. They can’t rely on the momentum and market share of a big company to push a mediocre idea to the marketplace. They now must come up with products and services, procedures and processes that are truly revolutionary. Now, because of limited budgets, they are compelled to think out of the box and come up with truly unique ideas. They must look at the market with fresh eyes, find a new niche, and sell in a resourceful fashion. So take a close look at your big company’s budget requests. Don’t just rubber-stamp them. It’s not so much the money you’ll save; it’s the innovation you’ll generate!

Next time we will discuss more differences between big and small companies, and how their structure can either inhibit or encourage innovation and creativity.