Overcoming the Three Big Hurdles to Innovation in Large Organizations

Copyright by Stephan Klaschka 2010-2025

Large organizations have vast resources and organizational functions, but this advantage inherently comes with a disadvantage. Like large dinosaurs, with increasing size and maturity, they lose the ability to adapt nimbly to a changing environment as their smaller competitors can seize business opportunities.

The Three Big Hurdles

Your task is to spark new energy, employee engagement, or rejuvenate business growth in alignment with business strategy and company culture. Let’s first identify the three common obstacles that large organizations struggle with and that you will likely face before we address how to disrupt and overcome them as an intrapreneur.
- If you are new to intrapreneuring, consider starting with The Rise of the Intrapreneur and then come back here to continue.

These three big hurdles are the

1. Vertical Disconnect: Ideas from the bottom of the organizational hierarchy do not find their way vertically to the top to get picked up, supported, and implemented.

2. Horizontal Divide: Functional silos separate the workforce horizontally which limits effective action to put the full potential of the company’s resources and diversity in a well-concerted way.

3. Inertia: More talking about change than taking action opens a widening implementation gap between ideas and their bringing to life. It is so much easier to lean back and improve incrementally than to take the risks coming with major change. Red tape and ever-mounting bureaucracy do their part to keep the wheels from turning and breeding a mindset of mediocrity.

These obstacles accumulate and pile up to form an unfavorable ecosystem of stagnation by preventing innovative thoughts from growing and ripening. They stand in the way and inhibit innovators from taking the necessary action. They can stall an individual’s courage that is required to drive the organization’s future success - and possibly even the organization’s survival.

Sketching a future innovation ecosystem

Here is what it takes to break the crust to reinvigorate and nourish innovation to flourish once again by building an innovation-friendly ecosystem:

1. Vertical cut: Connect grass-root ideas with executive sponsors

Too often, “middle management” gets blamed bluntly for keeping ideas and funds from flowing freely up and down the hierarchy (why? - see also Leadership vs Management? What is wrong with middle management?).

A mechanism is needed to pipe fresh and promising ideas in an appropriate format from the grassroots to executives, where they can be recognized, sponsored, and put into motion for the betterment of the organization. This holds true for disruptive breakthrough ideas in particular and stands in contrast to the more common continuous and incremental improvement (see also 10x vs 10% – Are you still ready for breakthrough innovation?) that typically makes up most of an organization’s work.

Don’t be mistaken, executives worth their salt seek good ideas like the air they breathe. They are generally more open to necessary change and bold course corrections than one may think. Executives also hold the keys to feeding the ideas back into the machinery of the larger organization to get implemented.

We need a mechanism that cuts vertically through red tape and hierarchical boundaries in mature organizations. It requires a pipeline of ideas that connects the top with the bottom of the organization and everything in between with intrapreneurial passion.

2. Horizontal cut: Connect across functions and geographical silos

Large organizations tend to foster functional and geographical silos to increase efficiency, quality, and reliability in their operations (again, see Leadership vs Management? What is wrong with middle management?). This effectively inhibits ideas of a game-changing nature from flowing freely and being developed with input from diverse perspectives to benefit the larger organization.

A wise saying goes: “Innovation happens at the intersection of disciplines.” It takes adding a variety of brains with diverse perspectives to a problem to challenge, improve, and develop an idea to become more robust and innovative and to make it feasible. Thus, a mechanism is needed to effectively cut through organizational walls horizontally that allow employees to effectively collaborate, network, and connect the established silos and islands.

Are you stuck with organizational silos too? (source: (communities.netapp.com)

3. Tangible results: Bridge the “Idea to Implementation” gap

What we need to achieve in the end is giving good ideas a chance that otherwise would never get considered or implemented – especially in a mature business environment that favors low-risk incremental improvement over more risky breakthrough experimentation (see also 10x vs 10% – Are you still ready for breakthrough innovation?).

We need a mechanism that frees the intrapreneurial spirit of employees and directs their passion and potential ideas toward tangible results that, ultimately, drive new business growth or effectiveness.

How does it work?

Our arsenal of intrapreneurial instruments and mechanisms for this innovation ecosystem can include, for example:

• School for Intrapreneurs,

• Internal corporate venturing,

• Networks for implementation and

• Opening to outside perspectives.

We will explore these very different but -ideally- reinforcing approaches over the next posts. I know they work since I built such an eco-system successfully and with more than a 100X ROI (return of investment) in a FORTUNE Global 500 company.

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Stay tuned for my next post: Why mature organizations can’t innovate