Home at 1am, after a six-hour journey that should have been three. The extra hours of airport Wi-Fi on the way home gave me time to wrestle with a nagging problem.
This morning I facilitated a group of talented, smart leaders from TIAA, one of the world’s largest financial institutions. As we walked through the Outthinker Process to produce disruptive, big ideas, the conversation kept veering into the question of “does it really matter?”
Their issue goes something like this:
Our company won’t accept our big ideas, no matter how sound they are. We have pursued innovations before. They have been approved and funded. We have driven them passionately through the 15-step gated process than our company demands of us.
And then … they disappear.
The company hits a road bump. Attention shifts back to core business. Resources recede like a wave back into the sea leaving our brilliant idea stranded.
So I spent the hours waiting by airport gates researching the issue. I read through academic papers, trying to understand what is already known about the challenge.
As usual, I found we know more than we think. Businesses tend to build new wheels when researchers have already spent decades studying their construction.
The answer … an answer at least … lies in the concept of “entrepreneurial intensity.” EI, as it’s termed, is the propensity of an organization to find opportunities and focus needed resources to pursue them. Academics have found three drivers determine EI:
- Pro-activity: Do your peers lean into challenges or wait passively to copy competitors?
- Risk-taking: Is your organization willing to take the risk to pursue new ideas? Amazon CEO Jeff Bezos wrote, “Given a 10% chance of a 100 times payoff, you should take that bet every time. But you’re still going to be wrong nine times out of ten.”
- Innovativeness: Can your people generate new, valuable ideas? Not just product ideas, but ways to market, pricing strategies, and processes.
EI matters because through countless studies we know that it drives:
- Faster growth
- Higher margin
- Superior investor returns
Yet very few organizations can produce EI. Amazon overwhelms its competitors and markets with a flood of innovations – drones, devices, pricing schemes like Prime – but they are, unfortunately, one of the very few standouts among a crowd of bystanders.
Let me distill ten years of research into five keys to increasing the EI of your organization, culled from the research. These are not just ideas that may work; they are practices proven, through rigorous analysis, to statistically increase EI.
- Create uncertainty, but not too much: When people believe the environment will not change, there is no reason to When they recognize they operate in an uncertain environment, radical and incremental innovations grow, they become more future-oriented, and they scan the environment for change. But when uncertainty grows too far, they become scared, they stick their heads in the sand, and innovation stops.
- Have your CEO encourage EI: Employees of companies whose CEOs are entrepreneurially minded are more likely to be as well.
- Build a culture that encourages EI: When cultural norms allow risk-taking and failure, innovation and growth accelerate.
- Reward it: When intrapreneurs are celebrated and their stories told, others start following suit.
- Give autonomy: When people are given freedom to solve problems in unconventional ways, they find unconventional solutions. As Gary Hamel wrote, “The real damper on employee engagement is the soggy, cold blanket of centralized authority.”
So if you want to grow, activate entrepreneurial intensity by establishing uncertainty, having leadership encourage it, building a culture that supports it, rewarding it, and giving your people autonomy.