Why are corporates so hopeless at innovation (and entrepreneurs so good at it?)
Actually most corporates are stuffed full of entrepreneurial brilliance
Big companies have so little confidence in their ability to innovate that they spend huge amounts of their shareholders funds in attempting to bring entrepreneurship in from outside. Most have tried buying thrusting businesses and found it is almost always a disaster. Some have attempted Entrepreneurs in Residence but this is usually the route to a padded cell for the appointee. Increasingly we see big companies attempting to insulate the entrepreneur from their atrophic culture by forming arms-length partnerships and sponsorship programmes which can work but often result in hilarious clashes in culture between the corporate and the start-up (once described as the bland leading the blind).
The question that exercises me is WHY?
Why, given the absolute imperative to change, are most (not all) corporates so hopeless at creating innovation, drive and creativity? In a word entrepreneurship?’
How a team reacts under pressure is critical to determine how they behave in real situations and is quite new as a way of looking at team dynamics.
It’s a question I believe has now, at least in part, been answered by some quite brilliant research conducted in the US to describe how teams of people work in different organisations. There are two stand-out reasons why this research is brilliant:
- It’s new and is based on real neuroscience (what is actually going on in the head of your people), rather than the ‘observational’ approach of most organisational modelling from Jung onwards.
- It’s based on what happens when the Team is under stress or pressure. And that is critical to determine how they behave in real situations and is quite new as a way of looking at team dynamics.
So, how does this address the problem of entrepreneurship in organisations? Not surprisingly, those you would think of as entrepreneurs behave very differently to those you would pigeonhole as ‘corporate’. In fact, under pressure, they work in a diametrically opposed way. Hence the frustrations of entrepreneurship in large organisations. Hence the tendency for entrepreneurially minded people to quit. Yet it turns out that by showing people exactly how they are behaving you can enable them to choose a different path. You can re-programme the behaviour of individuals and teams and make it OK to be more entrepreneurial, faster, more innovative – but stay feeling safe. We call it Agile Teams. The impact can be extraordinary.
It turns out that by showing people exactly how they are behaving you can enable them to choose a different path.
How can a team be helped to chose a different path?
To begin to understand this you have to imagine how teams behave under stress by visualising a circle or clock-face. Corporate teams typically move defensively, in an anti-clockwise direction, moving from concept or idea into evidence-based research in order to validate that idea, then to test it out in a controlled environment to prove it works, and only then to roll it out expecting users to adopt it when they’re actually being forced to comply. This creates little to no buy-in and often results in failed adoption. This is the classic command-and-control, micro-management process. It is a fear-based approach that reduces personal risk but removes choice and attempts to force participation.
Entrepreneurial teams typically move more offensively, in the clockwise direction. A new idea or challenge is shared with the team, which engages to provide feedback and input which refines direction and contributes missing considerations. Once a team of people who share the same ambition join together, put the concepts into action they then evaluate the outcomes against the team’s original intentions and then iteratively work together to make adjustments to the assumptions until the full value of the original concept gets realized. This is a trust and choice-based approach that enrols people’s participation based on their excitement for the project.
Corporates tend to put great value on planning and analysis prior to committing, which means they often move slowly and can get left behind. Entrepreneurs tend to move quickly based on minimal information. They are willing to make mistakes and learn from them, they’re agile and adjust course often, working in a state of continual improvement.
This new way of understanding how teams respond to daily business challenges has already had a dramatic impact on team performance in the few UK companies so far exposed to it.
What this shows is that in order to adopt the best of entrepreneurial thinking and application may not be as hard as the myths would suggest. That actually most corporates are stuffed full of entrepreneurial brilliance. It’s just the way teams have been taught to work that is suppressing it. And if that is true, companies like Google, Lockheed Martin and Spotify that have learnt to release the entrepreneur within may quickly become the rule and not the exception. And that really would be a revolutionary thought.
If you’re interested in learning more then get in touch. We’d love to hear from you. And you might be interested in these articles:
The secret behind Collier International’s global revenue performance
Is being entrepreneurially minded the only survival strategy?