Your organization will inevitably grow as you achieve success. As you grow in size, you, as a pragmatic leader, will have to ask yourself what implication does your company’s growth have for the creative innovators and intrapreneurs that made your success possible? Will the growth of your organization--with its increased complexity and bureaucratization--drive them out or will they stay?
A traditional case has been made by laymen and academics alike that as organizations succeed and grow larger, a bureaucratic rigor mortis sets in. Success and size generates bureaucracy: too many procedures, too many routines, too many constraints. As a result innovation becomes hampered, ventures are slowed down and the entrepreneurial spirit is weakened.
The long-held belief is that once organizations begin to sprawl, they generate “exiting entrepreneurs”--that is, creative, innovative individuals who no longer see intrapreneurial opportunities and pursue them elsewhere.
As one engineer of a major organization said, “If I can’t be innovative inside the organization, I’ll go an innovate on the outside. If they don’t want me as intrapreneur, then I’ll make it on the outside as an entrepreneur.”
On the other hand, large organizations are in a better position to incubate and usher new ideas to fruition. In larger organizations, people are more likely to stay and engage in new ventures.
Surprisingly, a recent paper by Aleksandra J. Kacperczyk from MIT’s Sloan School of Management, entitled “Opportunity Structures in Established Firms: Entrepreneurship versus Intrapreneurship in Mutual Funds,” shows that the size an age of organizations are “negatively associated with the rates of entrepreneurship but are positively associatedwith the rates of intrapreneurship.” Simply put, the assumption that as organizations grow they drive out creative intrapreneurs is not that clear. If opportunities are given, many will stay and become intrapreneurs.
As your organization succeeds and grows in size as well as complexity, your leadership challenge is to sustain the innovative spirit that is sure to retain intrapreneurs. In doing so, consider the following:
1. Let innovators remain innovators. In large organizations, there is a peculiar and somewhat dysfunctional tradition of promoting individuals with keen technical knowledge to managerial positions that remove them from the very innovative activities they initially found attractive. Sometimes as organizations grow larger, there is a temptation to promote people away from their passions.
2. Avoid bureaucratic creep. The strength of small organizations is in their agility. However, as your organization grows, agility may become suppressed by the need to set procedures and routinize work activities. Of course, an increase in bureaucracy is necessary to manage more people and get more products to market, but it’s your job as a leader to ensure this does not impede the agility driving the innovators.
3. Encourage spontaneity. One of the great quagmires of organizations is that as they become larger and more complex, they become more rigid with resource allocation. There may be more funds to pursue a venture, but they aren’t as readily available. That, combined with the constant need to coordinate and be accountable, will often kill the short-term spontaneity that is the spark of innovation. Therefore, while focusing on resource coordination, don’t forget to allow intrapreneurs a degree of autonomous control over some resources.
4. Create internal networks. One thing you can rely on is that the size and complexity that will come with your success may result in silos of departments, products, and businesses. Silos can destroy the innovative spirit. Your leadership challenge is to make sure there is motivation to network across silos. Ensure ideas are being exchanged throughout the organization and that the bureaucracy does not shut off dynamic networking.