One of the toughest challenges about innovation and change in big organizations is that – somewhere within the organization – it creates an administrative layer that has to deal with the reality of mismatch between cultures. At the University of Michigan that level is the unit administrator who is in charge of financial matters, HR, payroll and countless regulations and processes too numerous to name. My unit administrator has a tough job with lots of tension: it’s like being financial admin of the Black Pearl one day or Jack Sparrow working in the IRS the next. And it is one of the most important staff positions we have.
Most big organizations are places rich on policy, rules and process and there are many people all around who make a living making sure these rules get implemented and executed appropriately. It turns out that policy and rules come in two different buckets: on the one hand, big organizations have more failure modes and they need some policy because they are too big. They are just more complicated and therefore need more policy and more guidance for the same reason that there are more traffic signals in Chicago than in Chelsea – there are just more people involved!
The second bucket of policy and regulations, as described by Frédéric Bastiat in the context of economies, have a very different origin. They are initially designed to solve a problem or address a short-term need. It’s easy: just pass a policy and the problem is resolved! The problem, as Bastiat points out, is that there are effects of these policies that should be examined which are much more important in the long run. What was supposed to eliminate or solve a small problem is now turning into something that hinders progress. And, while it is easy to create a policy it is comparatively much harder to get rid of one. Even though the specific problem that caused the policy is long gone, there is a fear of an even bigger recurring problem that makes it impossible to eliminate policy or process. In an aged organization growing like this, getting stuff done is like swimming in molasses or racing in a minefield…
In front of this backdrop of necessary and bad policy, rules and processes, an intrapreneur starts creating change enabled by two independent but aligned forces – the support of the leadership for the broad objectives to be pursued, and a personal passion and belief that the status quo needs to be changed – now! Within a few short weeks, the intrapreneur will build a team designed to tackle such changes, and by creating a clear purpose and understanding for the need and value of change. This is where the tension starts between the new and the old, between known process and creativity. And that’s when a frictional layer is created between these two viewpoints and value systems.
The first reflex corporate entrepreneurs have is to take all policy and process and put them in the same “bad bucket,” even though it may not all belong there as previously stated. That creates an almost unbearable challenge for an administrative layer that connects the two cultures. After being bogged down fighting countless small and big battles, the second reflex for the intrapreneur is to give up and walk away and with that goes ambition of change and opportunity. Most intrapreneurs never get beyond this step and amazing opportunity is lost.
So, how do corporate entrepreneurs become successful? In my observation, there are three aspects that most successful intrapreneurs have in common.
First, they have solid support from the top of the organization. I cannot imagine true entrepreneurial success within a company without buy-in from the top. The bureaucratic counter-forces surely kill any progress on a time-scale much faster than the time it takes to create success. It does not take many mistakes to be brandished as “does not know what he is doing” in bureaucracy land… Yet, there will be mistakes; there have to be in order to create huge successes!
Second, intrapreneurs create success fast enough. I am convinced that many intrapreneurial challenges can only addressed by speed. In the business of Intrapreneurship, there is no such thing as a slow and a fast solution – there are only fast solutions. Quick enough success helps create examples of outcomes that the transformation seeks to achieve. They help motivate and help the team to celebrate. And quick successes help create political capital against the incumbents.
Third, they have a loyal team with them to execute the entrepreneurial vision at the speed required. There are a lot of functions that are crucial, but I want to focus on the part of the team that has to run interference between the entrepreneurial entity and the policy and processes that both enable and hold back the big company or organization, as mentioned above.
Being successful at this interface function is one of the toughest in the entire process. It is like being a financial admin of the Black Pearl today and being Jack Sparrow in the IRS tomorrow – it’s being a mismatch wherever you go. This job cannot be successfully done by someone who cannot deal with tension – there has to be tension, otherwise there is not corporate entrepreneurship. In fact, this interface function is all about dealing with tension while creating value. It requires recognizing which policies and processes matter and convince the entrepreneurial team to follow them. But it also requires the intelligence and common sense to know which processes can be questioned without creating major risk to the organization. The intrapreneur needs that help to create success at the speed required. In many ways, the intrapreneur takes the risk, but it is the responsibility of this interface function to translate and explain.
There is a tendency to credit one person- the leader – with entrepreneurial success within a big company or organization. But, there are many functions that are extremely important and they often do not receive as much attention and credit. But, trust me, without the right interface functions#, entrepreneurial success in a company is as likely as winning a car-race with flat tires! It’s not going to happen!
**I want to thank Leigh McGrath who is leaving us this week to take a new job at UM Dearborn. She deserves a lot of credit for many of our most important successes! Thanks, Leigh!