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.
| Inputs | Phase 1 | Phase 2 | Phase 3 | Phase 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 |
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.
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.
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.
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.
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.
The autonomy you gave your business units in Step 5 can now be applied at the smaller team level.
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.
