POWER TRANSITION THEORY

Intrapreneurs quickly learn that the more they accelerate growth, the more they are perceived as a threat from entrenched executives in the business. This threat perception is the leading cause of intrapreneur death. It is much more ‘lethal’ than market or business model invalidation.

So, at a certain point, I decided that the political elephant in the room could no longer be ignored. I learned that it was essential to have ‘the talk’ before we started that if your venture acceleration model worked it would cause tension, stress, and feelings of betrayal and indignation. The success of portfolio optimization depends on how the transition of power is managed more than anything else. 

To understand why successful intrapreneurs cause huge civil wars in huge companies, we need to leave the business world and go to the world of International Relations and Power Transition Theory. Power transition theory was developed by A.F.K. Organski in 1958 as a way of understanding why nations go to war. Organski states that nations all exist in a global hierarchy of power, with superpowers at the very top of the pyramid and weak states at the bottom. The dominant superpower is satisfied and seeks to preserve the global status quo, while the weaker nations are mostly dissatisfied with the status quo and seek to disrupt it. According to Organski, the root cause of war is when a nation believes it has accumulated enough power to challenge a more dominant power. Hence the term power transition. 

I believe that power transition theory is not just a valid explanation of international conflict but also explains why intrapreneur success foments political crises in huge companies. 

What’s fascinating, in my view, is that the portfolio optimization model, when you turn it on its side is the EXACT design of Organski’s 1958 power transition theory model.

Here’s how to manage power transition in a way that is accretive to transformation and doesn’t derail it.

1. Have ‘the talk’ - There needs to be a no-bullshit moment before you start where everyone is totally transparent about the political ramifications of intrapreneurial success. It has to be named. Executives need to anticipate how they might feel and react as innovation accelerates.

2. Create scaffolding for dissent - There needs to be a regular cadence of ceremonies where leaders hear hard truths from people who don’t yet have power. They need to ask questions like, “what do I need to hear that people are afraid to tell me?” or “what is a risk/ threat that I might not see that is obvious to you?” 

3. Remove subjectivity from investment reallocation - Tenure cannot be conflated with seniority in a company that hopes to innovate. A company that protects legacy leaders from accountability or funnels resources into the pet ventures of senior executives destroys intrapreneur morale. 

4. Define what it means to be a good intrapreneur ally, and create infrastructure for it - not everyone is born with the wiring of an entrepreneur. But they play a critical role in accelerating transformation in a big company. How they can be supportive must be clear.

5. Incentivize un-siloed cross-fertilization - There must be ways to incentivize cross-fertilized innovation. In most companies your bonus and your performance review is linked to your division’s performance. This needs to be replaced or augmented with a system for recognizing un-siloed collaboration.