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Can big companies innovate?
By Dan Mitchell, contributor  
October 5, 2012: 1:25 PM ET 
Of course large businesses can innovate. They do so all the time. But it often means they must ratchet down their fear of their own stockholders.
FORTUNE -- On the Harvard Business Review's blog network, researcher Maxwell Wessel offers a framework for how big companies should go about innovating. It's informative and insightful, but also, ultimately, depressing.
In his three-part essay, Wessel, a fellow at the Forum for Growth & Innovation, describes a business world filled with stodgy, cost-cutting managers who are hyperfocused on processes,  always worried about the coming quarterly report, and scared of their own stockholders. He doesn't say this outright, and in fact he's empathetic to those managers and even to companies that have no interest in innovating. "Seasoned managers," he writes, "steer their employees from pursuing the art of discovery and [toward] engaging in the science of delivery. Employees are taught to seek efficiencies, leverage existing assets and distribution channels, and listen to (and appease) their best customers."
And, perhaps more to the point: "Such practices and policies ensure that executives can deliver meaningful earnings to the street and placate shareholders."
What do you want to do when you grow up, Billy? "Why, jeepers, I want to placate shareholders!"
Wessel knows that many such managers (though clearly not all of them) would rather be doing something else with their lives. And in most cases, they have little choice. Even the most staid companies in the most stable industries must seek growth and adjust to changing markets, he notes.
But even in those cases, it takes vision and courage to do innovation right. Wessel cites the example of Gerber's infamous attempt to expand beyond the baby-food market. In 1974, it came up with Gerber Singles, which was just baby food with a different label slapped on the jar, and placed in a different part of the grocery store. It was a miserable, humiliating failure.
Wessel writes that because Gerber (now a subsidiary of Nestle) was institutionally geared toward focusing on marketing its existing products as efficiently as possible, it was "only natural that Gerber executives created a product for adults that looked and felt just like its product for children. This was their biggest barrier, not a lack of vision."
But of course it was a lack of vision, it's just a matter of determining what caused the lack. Wessel says as much: "...Gerber faced the internal pressure of its organization, the need to operate efficiently, to deliver billion-dollar growth businesses every year, to satisfy existing customers — and to do all this without threatening existing net income levels. The problem wasn't the idea; the problem emerged from the relentless pursuit of incremental profit within mature organizations." (On the con