I recently had the pleasure of joining a panel on the topic of innovation along with some really smart people such as Ben Crowe (Gemba), Rebecca Scott (Streat) and Ben Rennie (Uncluttered White Spaces). I don’t really think about innovation as much as I do about company culture. Rather than trying to innovate, I try to create an environment where innovation and creativity is a mere by-product of how we operate. However, the discussion got me thinking about innovation and creativity, and specifically the challenges larger organisations face in this area.

From my time working in and with large organisations, much of the thinking seemed to be dominated by protecting downside. Innovation normally means taking a risk, and given large businesses attract greater visibility than smaller companies like mine, the risk associated with going out on a limb is usually higher.

Small companies often have less to lose and hence we can take risks and try new things. This was brought home to me in a recent marketing campaign we tried. We publicised (and at time of writing are still running) a promotion called Undies Monday. The gist of the offer is that if you walk into any of our stores on a Monday in March in just your underwear, you will get any one product up to the value of $50 for free. The campaign has gone viral and generated a lot of buzz and awareness for us.

This post is not meant to debate whether Undies Monday is commercially sound or what benefit we get from it. That would be a marketing post, and regular readers of The Entrepreneurial Truth should know by now that my blog is more like a “dear diary” around lessons I am learning and personal reflections on my entrepreneurial journey. Rather, this experience has got me thinking about why we tend to be more creative and try more new and unusual things while other larger companies often struggle in this regard.

I have realised that there are always a hundred reasons why a company should not try something new. If I had gone to mag nation’s lawyers for sign off prior to starting Undies Monday, I am certain they would have strongly counselled me on all the things that could go wrong and scared me off doing it. After all, that is their job. However, this promotion took two days from conception to implementation. We knew there were risks, but we quickly weighed them up and said “let’s just do it”.

This doesn’t mean that you have to throw caution to the wind. I did run the idea past a bunch of trusted colleagues to get their take, but ultimately I trusted my own judgement on this. When it comes to big corporates, it is not as easy to replicate this single point of responsibility. There are often multiple stakeholders who are affected by the risks involved and, let’s face it, despite the best of planning, we all know that “shit happens”.

So it did with Undies Monday. Prior to launch we quickly added a term to say that you had to be over 18 to participate. The PR train wreck associated with being even remotely connected to promoting underage exhibitionism had me dry retching. We had many more people turn up for the first Monday, indicating that things would get out of hand in subsequent Mondays, so we had an honest dialogue with our fan base and, in a very transparent way, amended the terms and conditions to limit the numbers.

In other words, we responded and adapted to real-time learnings. I have come to realise that innovation and creativity are rarely about killer ideas, but more often connected to a cycle of trying, learning and adapting. Big companies don’t always reward this process. It is often about getting it right, which doesn’t bode well for allowing space to try, fail and try once again. If big companies simply protect downside and don’t “have a go”, they will never be able to gauge the success of those potential game changers.

The beauty of a smaller company is that the failures can often go unnoticed in the market. It allows us to foster a culture of asking for forgiveness rather than permission. How do we encourage this in larger companies?

This will be the subject of my next post — maintaining the magic when growing from small to big (I spend much of my time worrying about how mag nation will manage to maintain its cult following and its cool even if through growth it starts to be seen as a larger evil corporate).

For now, Undies Monday has reinforced for me that having a crack (pardon the pun) at something a little different can work wonders, if you are fully prepared to monitor and react. Most large companies are skilled at managing risk, but I am hard pressed to think of any innovation that has been devoid of risk.

Sahil Merchant is founder of mag nation. Follow him on twitter: @sahilmerchant. His launch post can be found here.