Let’s set aside the question of whether the corporation should survive. It is not clear that the world will need corporations in the future. Indeed, before the East India Trading Company was formed in 16001, the corporation did not exist and humanity was fine.
But self-preservation is a fundamental driver to all animals and humans and so, presumably, to corporations. We can expect firms will try to survive against new organizational forms. Ironically, in doing so, they are likely to evolve into forms so different from those they embody today to the point of becoming unrecognizable and, perhaps, not even technically firms as we currently define them.

This research suggests some clear steps a company can take to start evolving in order to remain relevant in what Chairman Zhang calls the IoT era. These steps follow the seven contours described previously. Here we seek to sequence them in an order that seems most natural.

InputsPhase 1Phase 2Phase 3Phase 4
Intrapreneurs: treat employees as intrapreneurs X
Multiple partner collaboration: deliver value through ecosystem partners X
Decentralized units: operate as smaller decentralized teams X
Autonomy: provide autonomy to teams X X
Spotting trends: pursue: adopt organizational principles that help employees spot emerging trends X
Access to resources: it is easy to get time and financial resources to pursue new opportunities X X
Alternative teams: if not happy with shared services, units have alternative options X

Phase 1

Advance what you are (hopefully) already doing

Step 1: Begin embracing external ecosystems.

Remember that companies who deliver value to end-consumers through an ecosystem of partners enjoy double the entrepreneurial intensity (EI) rates and are 50% more successful at recruiting and retaining top talent. By shifting your company’s outlook from “we deliver a great product” to “we deliver a great experience of which our product is one component” you should begin unlocking innovation and growth.

Step 2: Adopt organizational principles that help employees better spot trends.

It is likely you are already investing effort into such initiatives. Now is the time to start considering more decentralized approaches to achieve this, particularly in pursuing “zero distance,” approaching a model in which each individual’s orientation and incentives are directly tied to end-user success.

Step 3: Make it easier for employees to get resources (time and funding) to pursue new opportunities.

You likely have already some programs in place. But most of such programs we have studied still require the employee to get permission to participate. They must be chosen for the idea competition or training, for example, or must get budget and time off to launch a “5 X 5 Experiment.” Consider now what would be involved in really giving all employees the freedom to take at least initial action on a new promising idea without asking more senior staff for approval.

Phase 2

Initiate an organizational transformation

Increasing your intensity and focus on the things you are already doing (in Phase 1) should start spreading the message that the company is committed to creating a more decentralized and flexible model which will lay the foundation for the beginning of an organizational transformation.

Step 4: Begin treating employees like intrapreneurs.

This can be done through a variety of cultural change drivers. Those that we have seen to be most effective include (a) getting senior leadership to introduce new language (e.g., replacing the world “employee” in internal dialogue, meetings and artifacts like progress reviews), (b) telling stories of people who acted like intrapreneurs, especially stories of people who tried something entrepreneurial, failed, and still were praised for their effort and learning, and (c) adjusting measurement, incentives, and reporting structures where possible.

Step 5: Allow greater autonomy.

You have not yet broken down business units and siloes into teams, but you can begin losing the reigns to give teams and business units greater autonomy. We have found that senior leaders often fear “letting go” of the reigns. To counteract this fear, release control in a controlled way, by isolating a part of the business or a team or internal organization.

Step 6: Take your efforts to facilitate intrapreneurs accessing resources to the next level.

Now that you have started the shift from employees to intrapreneurs and you have begun allowing for greater autonomy and proactivity, you are likely to see new, bolder approaches to making it easy for people to take action on new ideas. For example, Unify, a staffing company with tens of thousands of workers who work in airports, allows local teams to customize training programs (e.g., videos) for onboarding new members. They not only can do so without asking permission, they are expected to do so without getting approval.


Phase 3

Break Units into teams

Step 7: Break large business units and siloes into small teams.

Until this point, most of the changes introduced can be implemented through a bureaucracy. In this step you are starting to depart from a hierarchical model. Start forming your version of Haier’s Microenterprises (MEs), each ME having 5 to 20 people, each with a shared mission.

Step 8: Provide autonomy to these teams.

The autonomy you gave your business units in Step 5 can now be applied at the smaller team level.

Phase 4

Phase 4

break shared services into optional providers/platforms

Step 9: Break apart support functions (e.g., IT, legal, R&D) into smaller units and give MEs the option to choose the support providers they want.

This is generally considered by those who are implementing this mode to be the most radical change of all, and yet a change that tends to be viewed as exciting and obvious. Just as you did in step 7 for your business units, do the same for your support functions. Then change your budgeting process to allow MEs to choose which support MEs they want to work with.

Take Your Intrapreneurial Assessment

How much Entrepreneurial Intensity (EI) exists in your organization and how does it compare to others?


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