Anarchy isn’t really a viable model, even (especially) for a corporate startup division wanting to get s*** done.
When corporates setup innovation hubs or agile shops (sometimes for the wrong reasons), one of the key expectations is to rip through the red tape and build a team focused on execution and delivery. The corporate will have a myriad of rules, processes and stakeholders which are seen as a stiffling drag on the ability to move fast and get stuff done. The new unit will be asked to sidestep the rules and ways of working in order to push things quickly of the assembly line.
Out with the old, in with nothing
Invariably, some of the initial hires in the new division will be strong performers from the core organisation that get shifted across (I will share my views on staffing and hiring at a later stage). They are often people who have managed to push projects through in spite of the corporate inertia and have been heavily exposed to the challenges of moving things forward in a big organisation with lots of rules.
Consequently they often relish the chance to throw all the pointless meetings and endless documents out the window and simply do stuff. Their initial reaction is one of joyful elation, as they gaze on their open calendars and imagine the pace at which they will be able to do things.
But the excitement won’t last too long. Once the rubber really hits the road, chaos starts to creep in. The lack of processes and structure provide lots of individual freedom, but also blindfolds each employee as to what everyone else is doing, leading to siloed buildouts and lots of reinvention of the wheel. It becomes impossible to cue up tasks for other people and get commitments from them. The control gained at the individual level is counterbalanced by a loss of control of the enviroment.
Revenge of the flowcharts
Management finds itself surrounded by a chaotic fog of war (who really knows what is going in out there?) and increasingly get hit with complaints from people on the ground frustrated by the lack of structure. All to often we then oversteer and impose too much structure, gradually recreating a lot of the processes that were left behind, only in a more haphazard and erratic fashion.
The absence of structure isn’t freedom, it’s chaos. Getting rid of stiffling control is a noble ambition, but all too often the baby gets thrown out with the bathwater.
You’ll miss it when it’s gone
It is important to understand the multifaceted functions that structure and processes provide and consider up front how to reduce the negativities without stripping away the positives as well.
One positive is to pin down who does what. This creates transparency across the organisation (both vertically and horizontally). If we can demarcate responsibilities and spaces from the outset, we can spend less time later aligning. Sorting this out after the fact, through belated cross team coordination and portfolio management, is much more expensive without a clear division of responsibilities from the outset.
Another important function of processes is to provide clear points of entry and set expectations explicitly. We rely heavily on each other and on specialised skillsets in a digital organisation and often need help to clear an obstacle in our path. Without a formal structure, it is very hard to align expectations on the status of a task. Was it agreed upon? Who will do it? How important is it vs. the other things that are going on? If everybody has complete autonomy, nobody can count on anyone but themselves.
In the honeymoon period, while resources are plentiful and people are still eager to pick up work, informal relations will work well enough and everyone will help each other out. But once the workload starts to build, ressource contention appears and key people start to get flooded with requests.
As gatekeepers start appearing all over the map, management can either accept a completely disjoined landscape of individual gatekeepers with no alignment across or they can impose controls from the top. Either approach is incredibly painful and ripe with recriminations and dissapointment for the people trying to navigate the constantly shifting setup.
To avoid this, it is important to build up a lightweight structure from the outset that can provide enough formality to make the system easy to navigate and make sure people can rely on the commitments given.
Reinvent the rules. Then do stuff!
All too often corporate innovation units start out with zero structure, bravely venturing forth and rejecting the sluggish processes of the mothership. As the tensions build it will often spur the sudden and top down imposition of rules and structure, stressing the organisation and hampering forward momentum badly.
To steer clear of these pitfalls, corporates should confront the questions up front in two ways:
Create an explicit division of labour
From the outset responsibilities should be defined at a high level. This will counteract the bumper car friction between teams and reduce the need for detail level coordination later. Things can be divided in any number of ways, e.g. functionally, by vertical, segments, opportunity spaces or any other criteria that may make sense. The key is to think about this division, make it explicit and communicate it openly and clearly.
Build a simple model of delivery
Even in the early days, commitments should be formalised and there should be a clear mechanism for sticking stuff on the todolist of someone else. How this is done is less important, but it is important that it does get done. Saying that person X has complete autonomy is fine, but that has to be made clear to everybody and person X must formally and explicitly commit to tasks he or she decides to take on. It is also important to openly designate escalation paths (who can overrule and make a final call) to avoid perpetual deadlocks and never ending merry go rounds of decisions and reversals.
I fully realize that nothing above is earth shattering insightful, but I have seen it neglected more often than not. Setting up a corporate startup unit is a significant investment (obviously financially, but especially in terms of management focus and organizational attention) and it is important to reduce the risks around this already volatile and uncertain investment. Too often myths of simply doing things with no structure around them are embraced to the detriment of long term viability.
Hopefully you have enjoyed this instalment of my writings on corporate innovation units. Reach out with comments and make sure to read my rant on the reasons these places get set up initially and the often overlooked question of the unfair advantage when setting up corporate ventures.