Find The Right Ears:
Do you consider yourself an innovator within your organisation, i.e., an intrapreneur? Do you see a solution for a challenge your organisation is facing but aren't sure how to get your idea implemented? It is said employees are always the best people to find and solve intraorganisational issues. However, the process of evolving an idea from ideation to successful final conclusion is often foggy. But new research by Ter Wal and team suggests using an inside-out approach to develop and refine an idea is the key to ensure that the idea doesn't languish at the pitch stage1
Featured in the April 2023 issue of the Academy of Management Journal; authors Anne Ter Wal, Paola Criscuolo, and Ammon Salter in their article: “Inside-Out, Outside-In, or All-in-One? The Role of Network Sequencing in the Elaboration of Ideas”, identified that innovators who engage close social ties to develop an idea from infancy, before presenting it to broader audiences, are more likely to bring their innovation to market
© 2024 Published by SPJIMR. This is an open access article under the CC BY license Management Practice Insights (https://creativecommons.org/licenses/by/4.0/) Vol 2
Issue 1 January-March 2024
If the rapid evolution of artificial intelligence (AI) has taught us anything, it is that companies need to constantly innovate to adapt to changing market conditions. Many giants like McDonald’s are able to stay on top due to constant innovation and adaption of new ideas.1 In the recent years, they have installed digital menus in their drive-throughs and placed digital ordering stations at their outlets. They are even started AI-enabled automated voice order-taking, creating phone-based digital menu systems that make recommendations to customers and piloting mostly non-human-run outlets. This is the definition of leveraging technologies of the future through innovation.2
When companies don’t embrace innovation, they will lose their market advantage. Zoom’s massive success could have been Cisco’s, if in 2011, they had accepted their WebEx VP of Engineering Eric Yuan’s pitch for a new, smartphone-friendly video conferencing system. Instead, their rejection of his idea led Yuan to leave Cisco with nearly 40 co-workers who believed in his idea to start Zoom, which has gone on to take the world by storm.3 You may be wanting to know what transpired between Yuan and Cisco’s management? Could Yuan have done something different to have his idea accepted at Cisco? Could the management have taken a different approach? But we will never know.
Hence, there is a need for an organisation to ensure that ideas are not thrown away without proper consideration. Through analysis of survey data and archival innovation performance records of over 300 stakeholders in a large multinational firm, the research found that the best way to ensure idea acceptance by management is for the intrapreneur to first expose their idea to people who work most closely with them, get their feedback and buy-in, refine the idea and then approach the decision makers with their pitch. This is called the ‘inside-out’ approach.
ž An intrapreneur can be defined as an employee who develops an innovative idea or project within a company
ž They have access to the resources and capabilities of the organisation
ž Intrapreneurs are highly motivated individuals who have specific skill sets along with leadership abilities and innovative vision
Making An Idea Tangible
Many wonder whether sharing an idea with their close counterparts can work. There are many instances of success with this approach. The famous McDonald’s Happy Meal is a time-tested illustration of using the inside-out approach to
test an idea. Yolanda Fernández de Cofiño, who operated a McDonald’s franchise in Guatemala, realised that the portions on their menu were too big for young children.4 Soon after, she created a kids’ meal, then dubbed the ‘Ronald Menu’, and tested it with a regular base of mothers and children who visited the restaurant. This allowed her to refine the idea and give it a proper structure, which helped in the idea being perceived as effective by upper management.
Having gathered strong proof of her idea’s advantages and the support of management officials at the McDonald’s she worked at, Cofiño presented her idea at the World Franchise Convention in 1977. Within just a few years, of that, the McDonald’s Happy Meal was found in menus across the United States and other countries. And the idea is still running strong today.
Yolanda’s inner circle was a subset of her customer bases due to the bond they shared and their belief of the need for this idea (see Figure 1). This is typical of an innovator’s inner circle, which could comprise anyone with overlapping knowledge bases and contextual information. Inner circle stakeholders are more likely to understand the pros and cons of implementing the idea and any pitfalls that may impede the smooth development. They will also be more invested in sharpening the idea to maturity. In turn, innovators are also more receptive to feedback from their inner circle due to their close bonds.
Management Practice Insights Vol 2
Issue 1 January-March 2024
Outer Circle
Yolanda
Legends
Original idea creator (Yolanda)
Inside network for intrapreneur (Yolanda’s test base of mother & kids)
Outside network for intrapreneur (McDonald’s top management)
Time taken for developing the idea
Source: Developed by the author based on original research article by Ter Wal, Anne L. J., Paola Criscuolo, and Ammon Salter and newspaper article “Guatemalan Woman Credited for Inventing the McDonald's Happy Meal Dies at 87”
But not every intrapreneur can have the freedom to experiment with their idea the way Cofiño did. So, there is a need for companies to create an environment for the inside-out approach to flourish.
The right approach
The best way to ensure idea acceptance by management is for the intrapreneur to first expose their idea to people who work most closely with them, get their feedback and buy-in, approach the slightly outer circle which can find loopholes in the idea, refine the idea and then approach the decision makers with their pitch. This is called the ‘inside-out’ approach
Ideas Need To Thrive
Most of the top brands are able to maintain their position due to constant innovation for their products and services. These companies cultivate an environment that is conducive to intraprenuers. Amazon’s commercial success is often attributed to its strong culture of innovation, which encourages employees to experiment with new ideas in small teams, to ensure no idea with innovation potential falls through the cracks.5
Toyota has long followed the system of ‘quality circles’, where they encourage small but continuous improvements to modify factory floor protocols. This has not only improved productivity and quality standards but has become a cornerstone for resource-efficient quality improvements in the global manufacturing industry. 6
Procter & Gamble’s open innovation infrastructure uses stage-wise idea development, including a concept phase that involves research activities (inner circle) followed by development and implementation phases (outer circles).7 This approach enables the company to bring products to market faster and more sustainably.
So, if you as the top management, are looking at ways to bring about a culture of innovation in the organisation, get rid of those suggestion boxes and idea-listing portals. Create smaller focus groups for idea development, like Amazon and Toyota, to promote the inside-out approach. Invest in company-wide processes, like Procter & Gamble, to evolve ideas into implementable innovations.
And if you’re an intrapreneur like Yolanda, research your idea—no matter how big or small a challenge it is solving—develop it, approach your inner circles, so they can help you figure out how to chisel your idea into shape. Once you have suitably developed idea, approach your company’s key decision makers to pitch your idea and your reasoning on why it is the next innovation they should invest in.
Management Practice Insights Vol 2
Issue 1 January-March 2024
Figure 2 : A conceptual representation of how an idea should grow within an organisation
Source: Developed by the author
| Timing is always the key. Go in too early and the idea may not | culture that encourages innovation. There is a need for the |
| catch the management’s idea. Delay the idea by trying to | leaders to give freedom for innovation but also be careful to |
| refine it to perfection and the time for presenting it may be | rein in any excesses and restore balance when and where |
| lost. The key to successfully pitch the idea is to approach the | needed. |
| top-level executives once you have the concurrence of your | |
| inner circle and the slight outer circle, who may come up | |
| with any deterrents your idea may face (as depicted in | |
| Figure 2). The several stages of inside-out idea elaboration | |
| make up only the first step. A team should then develop a | |
| ‘proof-of-concept’ by testing the solution in application | |
| scenarios. They, then, iteratively improve the solution, | |
| before deploying. | |
| With ever-changing demands and market conditions, not | |
| innovating is a death sentence for any organisation. Along | |
| with developing a culture which fosters innovation and | |
| intraprenuers, there is also a need to find the right mix of | |
| people and resources that can ensure that new ideas are | |
| shaped quickly and shaped well. As the top management, | |
| keep in mind that there are no short cuts while creating a |
Caruna Bhat is an Assistant Professor of Strategy at SPJIMR. You can reach out to her at caruna.bhat@spjimr.org
This article may contain links to third party content, which we do not warrant, endorse, or assume liability for. The authors’ views are personal.
If you have some inputs you would like to share, you can also reach out to us at mpi@spjimr.org
Management Practice Insights Vol 2
Issue 1 January-March 2024
REFERENCES
1
Kristian McCann, “McDonald's Debuts First Largely Automated Location,” IOT Insider, January 25, 2023, https://www.iotinsider.com/industries/industrial/mcdonalds-debuts-firstlargely-automated-location/.
2
Naveen Gudigantala, Sreedhar Madhavaram, and Pelin Bicen, “An AI Decision-Making Framework for Business Value Maximization,” AI Magazine 44, no. 1 (2023): 67–84, https://doi.org/10.1002/aaai.12076.
3
Joanne Chen, “American Dreamers: Zoom Founder Eric Yuan On Making His Mark In Silicon Valley,” Forbes, July 11, 2022, https://www.forbes.com/sites/joannechen/2022/07/11/american-dreamerszoom-founder-eric-yuan-on-making-his-mark-in-silicon-valley/.
4Gina Martinez, “Guatemalan Woman Credited for Inventing the McDonald's Happy Meal Dies at 87,” Daily Mail Online, September 8, 2021, https://www.dailymail.co.uk/news/article-9971051/Guatemalan-womancredited-inventing-McDonalds-Happy-Meal-dies-87.html.
5Andrew Borthwick, “Fostering a Culture of Innovation,” Amazon Science, March 9, 2021,
https://www.amazon.science/working-at-amazon/fostering-a-culture-ofinnovation.
6Ravinder Kumar, “Quality Circle: A Methodology to Identify Scope of Quality Improvement through Kaizen Approach.,” January 1, 2015. 7
Nesli Nazik Ozkan, “An Example of Open Innovation: P&G,” Procedia - Social and Behavioral Sciences, World Conference on Technology, Innovation and Entrepreneurship, 195 (July 3, 2015): 1496 –1502, https://doi.org/10.1016/j.sbspro.2015.06.450.
Article Information:
Date article submitted: Jul 20, 2023 Date article approved: Jan 2, 2024 Date article published: Mar 29, 2024
Images courtesy : www.freepik.com
Management Practice Insights Vol 2
Issue 1 January-March 2024