"Entrepreneurship within the world's largest businesses
is just as important as that displayed by enterprising start-ups,"
says Peter Grigg, principal policy adviser at theMake Your
Markcampaign, which aims to create an
enterprise culture among young people.
I could not agree more, but much of the debate has tended to
focus on how individuals within an organisation innovate, rather
than analysing how an organisation itself can utilise the talents
of its employees
The concept of
'
intrapreneurship'
How can an organisation help foster innovation? And how does a
large organisation deal with entrepreneurs when they are on the
inside?
According to Gifford Pinchot, a Harvard academic and expert on
innovation, the answer is to foster what he calls
"intrapreneurship" - people who focus on innovation and creativity
within the organisation.
Supporting this intrapreneurial behaviour is often the best way
to promote company-wide innovation. But this debate has yet to
trickle down into public discourse or policy discussion.
This is important, because across the UK we are faced with a new
business reality. It is one in which networks and relationships are
facilitated online, and collaboration is the norm. In this new
reality, people entering the workforce expect a more fluid
hierarchy and a greater level of autonomy.
It is part and parcel of an economy that is increasingly
dominated by knowledge and where businesses are reliant on the flow
of information. In this new business reality, innovation is more
important than ever.
Employee empowerment that allows intrapreneurial behaviour is
the first step in expressing innovation. Chris Adams, one of
Microsoft's graduate trainees in the Information Worker Business
Group, said to me that "All the people I work with ask questions
about what we are doing, how it is being done, and whether it could
be done better. We are not afraid to challenge the status quo."
However, this necessitates new operational systems for managing
a worldwide organisation to help intrapreneurs thrive.
Intrapreneurs are eager to see change and progress, and if they are
held back they can quickly become disenchanted.
Systems and processes, therefore, need to be designed to channel
that energy into a meaningful reality. But many organisations still
fail to grasp the importance of providing the infrastructure to
capture the great ideas that intrapreneurs have.
Operational innovation
The conventional wisdom of recent times has been captured in the
three Ds: de-bureaucratise, de-layer and decentralise. But
centralised, commanding systems and procedures are among the
hallmarks of large organisations. They help deliver the
accountability, transparency and efficiency that make a business
run effectively. These processes can at times be cumbersome and
inhibitive, but they can also be a facilitator of
intrapreneurship.
Research conducted by the Centre for Innovation through IT
(CIIT) concluded that "The impact of organisational culture on
innovation cannot be overstated. Strong leadership that develops a
culture supporting innovation is pivotal. An environment that
encourages communications and knowledge-sharing across
organisational boundaries is vital."
As the CIIT research suggests, an organisation's culture is
decisive in creating successful innovation. A culture is delivered
by leadership, but also by the structures and procedures that are
put in place. One way Microsoft has done this has been by setting
up business groups such as the Information Worker Greenhouse.
This group is a small incubator within Microsoft charged with
fostering new products. Ideas are pitched to the group, good ideas
are prototyped, and eventually the Greenhouse team looks to
commercialise the product.
An example where this process has delivered tangible and
marketable innovation is through the Knowledge Network for Office
Sharepoint Server 2007, which facilitates networks in businesses
and organisations by automating the sharing of undocumented
knowledge and relationships.
This product has been something of a virtuous circle of
innovation: it is a product delivered by intrapreneurial
innovation, but is also a tool that helps other organisations
capture and replicate creativity through greater collaboration and
knowledge-sharing.
The Greenhouse incubator is important because it is an open and
transparent process built around an organisational initiative to
find space for creative thinking.
To stimulate competition and entrepreneurial thinking, we have
also started a Dragons' Den-style internal panel where new ideas
can be pitched for funding. In addition, we have an online intranet
site called "My Ideas" on which people can log suggestions about
ways to improve the business.
These tools and structures are important facilitators, but
crucially they send out a message to employees that they should be
acting entrepreneurially and challenging established norms.
Taking a break to innovate
This type of leadership in an organisation is critical to
establishing an experimental culture. At Microsoft, Bill Gates has
done a great deal to create a vision for innovation in the
business. Two or three times a year, he sets aside dedicated time
to think about the future.
Ahead of these "Think Weeks", there is a call for white papers
from across the business - an invitation open to anyone. This
initiative is a strong signal that the leadership of the company is
listening to ideas and thinking about the big questions. But more
importantly, it sends the message that dreaming is not only okay,
but highly valued.
As much as anything, these initiatives stir people's emotions,
which is important in making sure our people stay engaged. Hiring
more
"
emotionally intelligent" and entrepreneurially-minded people
does, of course, bring with it certain challenges in terms of
management. Experience has taught us that these people need to feel
they are making a difference - that their ideas and actions are
changing people's lives.
John Kotter, a Harvard Business School professor, stresses the
significance of speaking to people on an emotional level to
engender change and innovation. He says, "Not only is an emotional
pull more inspiring, it also encourages people to connect and
collaborate to problem solve."
Getting the most out of intrapreneurs in a business asks for a
strong philosophy, but there is also a need to provide an inspiring
physical space that sets the stage for creative exchange. At
Microsoft we have designed office space that includes anarchy
areas: informal, fun and playful places designed to encourage
networking, idea generation and imagination. They also function as
a space where people can have a break, unwind and recharge. In our
experience some of the best ideas are born when you are away from
your desk.
Sustaining disruption
For businesses, all this effort is a worthless exercise unless
it contributes to the bottom line.
This is a conundrum that has been characterised as a conflict
between disruptive and sustaining innovations. The products that
evolve out of a company's medium to long term investment in
research and development are different than new, cheaper and
simpler products or services brought to market swiftly.
Although they both challenge, and frequently transform market
assumptions and norms, disruption is a quicker and more intense
change.
The assumption is that large companies do not need to be
disruptive to be innovative, that improvements will happen
organically. We have never subscribed to this belief. Even large
companies need to adopt the agility and disruptive approach of
smaller organisations to stay competitive they sometimes need to
act smaller to be bigger.
To help establish a culture of disruption, we have invested in a
research laboratory closely linked to
Cambridge University. It is here that some of our most exciting
product developments have taken place, such as the Microsoft
Surface platform.
But these initiatives are not only hubs of innovation in
themselves, they are also part of a broad strategy to engage with
educational institutions and tap into some of the cutting-edge
research taking place externally.
Our emerging business team provides a similar function, tasked
with harbouring start-ups outside the company and helping them
succeed through the networks and expertise our business can offer.
Reaching out externally is a way of injecting fresh thinking and
new ideas internally.
The Microsoft journey
As Microsoft has grown, it has experienced the same challenges
that many large multinationals face in the 21st century. Growth
creates complex communication and decision-making lines, which
demand an increase in management processes. Balancing this with the
need to cultivate the entrepreneurial side of employees can be
tricky.
As a global company, we need to provide room for connecting
ideas across geographical boundaries. The integral role Microsoft's
research lab in Cambridge played in the development of Microsoft
Surface is an example of how our best skills can come together
successfully, regardless of location.
We have made efforts as we have grown to foster a global culture
of collaboration built on the principle that the best skills in the
business should be used to meet the appropriate challenge. Global
gatherings, such as the Microsoft Techfest, bring together
researchers from around the world to learn and share knowledge
face-to-face through demonstrations and lectures from the company's
leading innovators.
One of the most effective ways to foster more innovation is to
keep intrapreneurs engaged. These people need to feel that they can
ask the demanding questions, be creative and action their
ideas.
Importantly though, to profit from innovation, people must be
able to make their ideas come to life. As Bill Gates once said,
"Never before in history has innovation offered promise of so much
to so many in so short a time." Our challenge is to make this
promise a reality.
● Gordon Frazer is managing director and UK vice-president
at Microsoft International