Being a small, sexy startup doesn’t make you innovative

Big companies don’t often get the credit for innovations that happen out of public sight

Corporate scientists looking in puzzlement at a stone wheel

(Illustration by Graham Roumieu)

When we think of innovative companies, we typically envision sexy startups like Tesla or Uber. But big, lumbering businesses can’t innovate, right? Try telling that to a large-scale manufacturer like Magna International. The company constantly juggles hundreds of new ideas, a small percentage of which will be developed into new products. Some of those ideas percolate up from the shop floor via ambassadors who share them (along with any challenges) with management and other divisions at monthly meetings; management susses out what their customers need and feeds that info back to the ambassadors, who take it to the shop floor.

The process fuels constant, incremental R&D, says Swamy Kotagiri, Magna’s chief technology officer. It’s how the company came up with its new SmartLatch system for the BMW i8 plug-in sports car. The innovative design eliminates the lock rods, release cables and moving handles typically found in a car door, resulting in a significant weight savings.

Innovation isn’t always obvious to the consumer, which is why big companies don’t always get the credit they deserve for game-changing moves. In 2013, for example, Unilever refined the way it makes its Dove Body Wash bottles. Using new gas-injection technology that creates gas bubbles in the middle layer of the bottle wall, the company reduced the amount of plastic that goes into each container by 15%, which works out to about 275 tonnes of plastic a year.

That type of change rarely makes headlines. Nor does an expansion into a new market or a tweak of an assembly line operation that bumps up productivity. But it’s innovation, and it takes place daily at companies like Amazon, Toyota and Marriott Hotels, which recently rolled out mobile check-ins for guests. Smart companies recognize that it’s better to disrupt the status quo than to wait for someone else to do it.