It’s of course impossible to even guess how many Strategic Development Projects that are running around the world, how much money being poured into them. They are secret by nature, building a competitive edge for the incumbent company. One thing we do know is that a lot of them fail and leave expensive damage to the company, often referred to as sunk costs. They stir up blame games and there is often a power battle within the Corporate Authorities where someone has to carry the can.
In our attempt to highlight and clarify the role of the Intrapreneur, we must again ask ourselves: Who’s gaining from a Strategic Development Project and who isn’t. It is an essential stage that must be established early in the process. Let’s look at it from the eye of each beholder: Employees and Management.
Employees, people executing the ongoing business, the work force. These are the individuals that will carry out the final tasks. Unfortunately, some of the workforce will be redundant at least in most of the cases. This of course depends on what kind of development that has been implemented. But tampering with employees affects all four pillars of production. This may be handled gently with early retirements, reskilling, upskilling or other restructure activities, but not always.
Management usually does not have direct MBOs for these projects, since they are in early days. Therefore, the results are not reflected in managements wallets. Managing a Strategic Development Project asks for a lot of attention. It will extend over several departments and affect middle management’s areas of responsibility. This, of course, is a liability and can deter their bonus plans. Reluctance may creep into view from some parts of middle and top management. If not managed, it will increase negative internal politics.
So neither the Labour nor the Corporate Authorities has much to really win from a Strategic Development Project. At best, the company remains status quo and in the worst case, someone loses their job or their bonuses. Well, it looks completely different for the owners who have everything to gain from rejuvenating the corporate infrastructure.
We strongly believe that there’s a lot to win with reinvention. Established organizations can become the new standard in their current market or be in pole position for an entirely new one. Embracing the shift will keep the organization at a cost-controlled level. Business will be done in a modern way and ongoing business will produce in a less expansive way. Building production on this new paradigm will also open up for further improvements and optimizations.
So who’s the winner? Well, to understand that we need to also investigate what happens if these infrastructural and rejuvenating efforts are NOT put into play. In many cases, their business are running dry. The cost of production may no longer be competitive, interest in the products that are being produced could be dwindling, and the labor force may be steadily immigrating to other companies with more modern and brighter prospects, etc.
If a company like that goes out of business, it usually gets chopped up and separated. Very little of the value goes back to the owners. The labor force and chief executives will find new jobs. But it’s a painful individual transformation putting pressure on everyone around them. So keeping up with rejuvenating innovation through Strategic Development helps everyone secure both work and long time growth.
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