The first lesson on organizational innovation in entrepreneurial enterprises

Glenn Carroll, Professor of Organizations and Senior Associate Dean of Academics at Stanford Graduate School of Business, gave four lectures on organizational innovation on May 23 in Beijing. He brought different ideas of organizational innovation according to different situations such as start-up enterprises, small enterprises, and mature industries. At the same time, he also brought new ideas for how Chinese manufacturing can compete internationally.

This is the first module of the "Stanford Graduate School of Business Executive Training Program" co-organized by CEConline and Stanford Graduate School of Business. Nearly 100 senior managers came from all over the country to study this course. This event is sponsored by Volkswagen.

Here are some of the key takeaways from Professor Carroll's lecture that day.

The first course, Organizational Innovation in Entrepreneurial Enterprises

Before I came, I participated in a global survey on innovation, and the first question was product innovation how important it is to you. 64% believe that product innovation is very important, and 59% believe that process innovation is very important. Chinese entrepreneurs pay more attention to product innovation. I believe that if Chinese companies want to compete with large international companies, product innovation is not the magic weapon for you to win, but more depends on process innovation.

In order to achieve innovation in a case, it is necessary to set a good environment, so that innovation can develop from it. How to design an organization, a good environment?

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Let's look at a case, LTCM is a hedge fund company whose founder has a deep academic background. Once, the company was faced with a very difficult situation. An IT system person, an accountant and some other employees in the middle office and back office discussed what to do next? These people realized that their expertise was in middle office and back office, so they thought, why not sell their technical expertise as a service to other fund management companies, so that they can save the trouble of doing middle office and back office. They founded GlobeOp company.

Of course they faced many obstacles, how was their organizational structure established so that they could overcome them? GlobeOp may have done something different than others, and what different things have made them successful?

These are people who come out of LTCM with shared experiences that give them the context of a common culture, and these people have similarities in attitudes, beliefs, and psychological traits. The original organizational culture has left an imprint on their character. LTCM also has certain standards when recruiting employees, except that the person has a high IQ, including whether he can be kind and harmonious with others, whether he will work hard, how to balance the profit of the company and other work goals, etc. Maybe people like GlobeOp didn’t realize this, but GlobeOp is the continuation of LTCM, so when these founders recruited people, the selection criteria were related to the previous corporate culture, and they unconsciously built a relatively homogeneous team. The new corporate culture is actually built on the old corporate culture.

The study found that when an average enterprise starts up, to a large extent, it is not based on the functions of marketing, operations, finance, etc., but to see if the other person is someone I know or know, or if I think this person has a personality that is similar to that of me. match.

I'm not against diversity. Diversity can sometimes bring benefits, but a lot of times we don't realize how much similarities in people ultimately contribute to business success. Everyone has common interests and backgrounds, and it is easier to build bonds with each other. In addition, finding people who are similar to you will reduce the search time. Find similar people or people you know who may have had some relationships in the past that brought you closer together. Because of the similarity, I trust those people more, and relatively speaking, there will be some independence and autonomy. Coordination reduces barriers to communication. Of course, homogeneity also has disadvantages, that is, people are too similar, which brings about repetition and redundancy of information.

Two Dimensions of Culture What is organizational culture? Often it is everyone's common beliefs, norms, the same language, and a special system that distinguishes them from other organizations. Any organization has its own culture, whether intentional or not.

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For managers, the content of culture is not the most important, but two dimensions are more important. One is intensity, which is how important this culture is to you, and how far people are faithful to their principles and beliefs. Another element is the homogeneity just mentioned, that is, whether this belief is distributed in an average strength among all members of the entire organization.

If in a company, the marketing department introduces you to a different corporate image than the information you get from other departments, it means that the homogeneity of the culture has not reached an even level. If you want to have a strong corporate culture, first of all To have a very high strength, and at the same time to have a very high homogeneity.

For GlobeOp, they no longer have to think of some new ideas. The founders have already conceived them. The job of employees is to implement them. Therefore, they need some homogenous people to implement them together, and they can implement them without any obstacles. GlobeOp found a homogeneous group of people and overcame a lot of difficulties.

Homogeneity strengthens coordinated development How does cultural homogeneity promote the coordinated development of enterprises? People who are homogenized often have some common goals. Maybe they think that money is important and that good work will pay off. However, if everyone does not share the same philosophy, it is difficult to have a dialogue and a lot of coordination work is required. What's more, in an environment of strong culture, managers don't necessarily have to do much themselves. For example, there are four people in a group, and three people have the same idea. They all know what their job is and do their best to do it. There is another person who doesn’t care very much and will keep making mistakes. In a strong cultural environment, if this person does not do Well, other people will tell him that what you did is wrong, you have to change it, and you can't endanger everyone. In the absence of the boss, the employee has to do the right and good things because of the cultural influence of others on him. This is a self-managed organization.

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So in a strong culture, the company's goals become personal goals, and everyone cares about what they do. This is what psychologists call inner motivation, which is different from external motivation. Incentives and anti-incentives are external incentive mechanisms by adding bonuses and deducting bonuses to people. Once you believe in something, turn to internal incentives. Psychologists have conducted tens of thousands of psychological studies, which have fully proved that this internal dynamic mechanism is much more effective and powerful than the external incentive mechanism.

What are the main factors hindering Chinese companies from innovating? Many of them are due to lack of motivation within the enterprise team, lack of new ideas, and lack of mutual promotion among colleagues. In the final analysis, it is a problem of corporate culture, which has not achieved the effect of strong promotion. Therefore, if Chinese enterprises find problems in innovation, it is likely that on cultural issues.

A strong corporate culture also has some inherent weaknesses, and a strong corporate culture is difficult to transplant to another country.

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