How to nurture innovation in your business By, Gordon Frazer, MD & UK VP at Microsoft International

ECI - Article 3 - 26 Apr“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 the Make Your Mark campaign, 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.

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.

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.

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.

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.

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