“If only I worked at Google,” he lamented. At Google you get 20% of your time to explore new ideas, failure is not only tolerated but celebrated, and the company supports the kinds of long-term projects that most companies shun.
I hear this complaint too often and believe it is flawed for two reasons:
- If you stuck Google Founder Sergey Brin in your company, under your bureaucracy, I’d be willing to bet he would make something happen. Great intrapreneurs take the system as given. They learn its mechanics and they figure out how to work with the system – the culture, hierarchy, incentives – to accelerate their ideas.
- The idea that there are only two types of companies – those geared for entrepreneurial behavior and those that are not – is overly simplistic.
There are at least four types of company structures. Once you figure out which type you are in, you can more intelligently define your approach to acting like an entrepreneur.
Danny Miller has spent two decades seeking to understand how corporate structures influence your ability to innovate. He is a professor at HEC Montreal, Chair in Family Enterprise and Strategy at University of Alberta, and author of innumerable papers on the topic.
At the risk of oversimplifying his model, I’ll summarize the four categories your company may fit in:
- Simple structure – When a company is still small it can adopt a simple structure, as Miller calls it, in which decisions are made centrally by the CEO and top management. Little need exists for specialists or bureaucracy. Instead the boss makes decisions and everyone else organizes themselves to execute.
- Machine bureaucracy – If your company is automated, with rigid structures and processes defined, guidelines carefully followed, and with highly developed IT systems helping to ensure procedures are followed, you are operating in a machine bureaucracy. Power is still held by senior management, but they exert this power more by defining the rules than by issuing order.
- Organic structure – I like to think of this as the “special forces” model in which you have small teams of differentiated specialists collaborating around issues and opportunities. If power is decentralized, collaboration prevails, and a person’s authority is linked to their expertise, then you are probably working within an organic structure.
- Divisionalized structure – One of my best friends is a senior divisional manager at Johnson & Johnson. His business alone generates more revenue than that of most public companies. He will tell that J&J is less one company than a collection of hundreds of different companies because they have adopted a division structure. In such structures division heads hold power. This allows for more flexibility and autonomy between businesses but it does not necessarily mean you will enjoy entrepreneurial autonomy yourself. That will depend on the philosophy of the divisional head you work under.
To win permission to search for new ideas, or in general to act entrepreneurially, you want to first assess which configuration category you are operating in. If you are in a relatively small business (say, under $250M in revenue) then consider whether the “simple structure” accurately captures your environment. If you are in a stable industry, perhaps with a high degree of regulation, and with less intense competitive rivalry, then you may find yourself in a “machine bureaucracy,” which is a natural fit for your competitive environment. If you company seems to operate like you imagine Google does, then consider whether the “organic structure” fits what you are experiencing. Finally, if your company is broken into relatively independent units, then you may be operating in a “divisionalized structure.”
Now that you have identified which structure you operate in, think about what the best approach would be to convince your boss/company to give you time to search for and pursue new ideas. Here are some tips:
|Simple structure||The personal appeal: Befriend the boss, understand his/her goals and interests, and appeal to his/her entrepreneurial character. In my research, I have found that leaders who grow a business into the upper reaches of what a simple structure will allow are torn between desiring entrepreneurial behavior and wanting to avoid the risks that come from letting people act without oversight. They key, then, is to appeal to the entrepreneurial spirits of those with power while showing them they can trust you not to make too costly a mistake.|
|Machine bureaucracy||Hack the system: If you want to alter the output of the machine, you have to understand its inner workings. Intrapreneurs who have succeeded with machine bureaucracies understand, intimately, the formal and informal rules: who really has power, how things get done, which rules you can bend and which lines you must never cross. Then they can work within what is acceptable to create the freedom to search for ideas.|
|Organic structure||Use your reputation to get on the A-team: You may believe that organic structures make intrapreneurship natural, but many would-be corporate intrapreneurs who join organically structured companies drop out because there exists no clear path or process for getting something done in such environments. Your success depends on your reputation as an expert,which gives you the currency to get onto the “A-teams.” You act like a free agent. You are invited to work on the highest-profile problems, and later get permission to pursue problems of your own choosing, because your strong reputation means people want you on their teams.|
|Divisionalized structure||Pick your boss: They key to succeeding as an intrapreneur in divisionalized structures seems to be finding the right boss. Because divisional leaders enjoy autonomy in such configurations, one leader may hold you on a tight leash while another lets you roam free to create value. Speak to colleagues that work in other divisions, figure out which boss would give you the level of autonomy you desire, and design a strategy to win their favor.|