One of the biggest challenges to large corporations becoming more entrepreneurial is their very structure. Chains of command and divisions of labor designed for efficiency can actually block good ideas and discourage creativity.
In this seven-part series, we examine ways that big business can learn from entrepreneurs, small businesses and start-ups. One of the advantages these smaller companies have over their big brothers is direct contact between staff and owners, allowing good ideas, innovation and creative solutions instant exposure to the top decision makers.
In large companies, too often these breakthroughs get dumbed down or misstated, or downright suppressed on their way to the top decision makers. The nature of the chain of command can prevent the upward communication to the ownership and top execs. Why? Because good ideas can be perceived by supervisors and managers as unworkable, or if they are workable, they may be seen as a threat to their job security.
These gatekeepers have tremendous power to suppress good ideas, and the folks they oversee know it. Some may think, “Why bother? My idea won’t ever see the light of day.” They wonder if their good idea will make their supervisor look “bad,” or if their supervisor would give credit to a lower staff member for something they think they should have thought of.
How lower-level managers perceive their job security and chances for advancement may be more important in their eyes than the ultimate success of the company itself. What can big companies learn from small companies to get around this corporate gridlock?
Providing a mechanism that allows for direct communication between ownership/top management and other staff members is essential to creativity. When big companies allow good ideas to “leap-frog” to the top, they send a message to all staff that their ideas are appreciated, and that each person can communicate their own ideas in their original form. This method is specifically used to encourage and deliver ideas, and not to undermine the authority of managers. Here are four suggestions:
VISITS. In order to encourage creativity, ingenuity and imaginative solutions, schedule the owners or top execs to visit the various departments on a regular basis. Have them spend the day there specifically to hear new ideas and suggestions.
EMBEDDING. Place equity holders in key places throughout your organization to be repositories for creative ideas. Because staff knows that improving the company is more important than job preservation to equity holders, they are more likely to share their ideas with them.
FORUM. Once a quarter, have an idea forum where employees are encouraged to share their ideas with top management either in person or online, webinar style. Provide a reward for ideas that are utilized. By setting the parameters, purpose and frequency of the forum, you are sending a powerful message that says, “We know you have great ideas and we want to hear them.”
COMPETITION. Have a contest for the best idea from each department and the best overall idea for the company. Make it quarterly, semiannually or annually so staff knows this is important and is encouraged to keep trying. Share the winners and their ideas with the entire company to reinforce this behavior.
By allowing your staff to share their good ideas directly with top management, you will be encouraging entrepreneurial thinking in your company.
In Part 5, we will examine how big companies can encourage creative thinking by changing the paradigm of the legal department.
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders