Internal Resistance Found to Sidetrack New Ideas

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Many Companies Create Own Obstacles to Growth. Fifty-two percent of companies that achieved a precedent-setting burst of growth due to innovation first had to surmount stubborn internal resistance, according to a study of 30 large corporations by Healthy Companies International, Arlington, VA, management consultants.

Organizational attitudes that focus more on following procedures than on encouraging new thinking stifle the very new ideas that are essential for organic growth.

Fifty-two percent of companies that achieved a precedent-setting burst of growth due to innovation first had to surmount stubborn internal resistance, according to a study of 30 large corporations by Healthy Companies International, Arlington, VA, management consultants.

Senior executives in charge of promoting growth frequently reported to researchers that in order to get an innovation set in motion they had to overcome second guessing and outright obstruction within their organization.

“Organizational attitudes that focus more on following procedures than on encouraging new thinking stifle the very new ideas that are essential for organic growth,” said Robert Rosen, Chief Executive Officer of Healthy Companies. “Our interview subjects repeatedly expressed frustration about the time and energy they had to expend just to overcome obstacles within their companies at the very time when they were already contending with adverse market conditions and aggressive competition.”

According to Rosen, a senior leadership team’s core mission is to promote organic growth. “That’s their job, to create opportunities for innovation. So it’s disturbing if not surprising that half their struggle is within the organizational structures, the culture and management inertia that discourage the entrepreneurs who are already at work in the company.”

According to Rosen, there are a variety of ways organizations resist innovation:

  • Too much faith in the power of data. A slavish reliance on data can be self-defeating. All companies have are data from the past but little that may be relevant to a business that does not yet exist.
  • Bureaucracy that smothers entrepreneurship. The organization’s bureaucracy is indispensible, but the company’s entrepreneurs need to have their own mental and physical space to trigger innovation.
  • Belief that only big is beautiful. An initiative with modest objectives may need time to pay off in a big way and may have to begin small.
  • Insistence that all projects should be treated equally. Not every initiative needs to adhere to the same rigorous path through the bureaucracy. CEOs should identify which projects have to be driven entrepreneurially and nurture them along a fast track.

Achieving organic growth has proved to be an urgent challenge for most organizations today, Rosen observed. “If CEOs were more conscious about how their own companies get in the way of growth then they would be more effective at minimizing the obstacles and unleashing innovation.”

Companies, the study found, are as likely as not to recognize the pitfalls of internal resistance. “Too many seem to be oblivious to the problem and instead get caught up in processes and organizational issues,” Rosen said. “On the other hand, about half the companies who took part in the study were determined to establish the right preconditions for growth. They didn’t feel the need to destroy their bureaucracy, but made sure to create a buffer within the organization so the real growth leaders could flourish.”

Healthy Companies conducted the study in 2009, in partnership with the Darden School of Business at the University of Virginia, to learn more about the leadership and conditions required to spur organic growth.

About Healthy Companies
Founded in 1988 by Robert Rosen and based in Arlington, VA, Healthy Companies International (http://www.healthycompanies.com) is a management consulting and research firm that helps chief executive officers and their teams build healthy, high-performance organizations. As a trusted client partner and thought leader, the firm has maintained a continuing dialogue with CEOs and developed extensive research contributing to numerous books and papers on leadership, growth, change management, communication strategy, executive coaching and performance improvement.

Media contacts: Robert Rosen, Chief Executive Officer, Healthy Companies International, 703-351-9901, or Phil Ryan, 845-339-7858.

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