The Role of Managers in Developing Innovation-oriented Organizations

Thousands of new companies are born and die each day in every part of the world. The  effort to create, nurture and sustain a survival and growth agenda that relies in innovation,  transformation and adaptation have been a discussion topic among leaders for years. The Harvard  Business Review published an article in 1985 showing how entrepreneurship could be a way for  companies to develop innovative ways to gain competitiveness. Although most of those concepts  of how organizations struggle to implement innovative thinking in their corporate culture remain  unchanged, new findings about how entrepreneurship happens made considerable advances  over these 37 years. Today, I want to share some of these concepts applied to innovation in  organizations. 

Why companies can’t innovate? 

First of all, let’s shed some light on why many established organizations struggle to  promote innovation as part of their culture. In my doctoral research, I’ve investigated more than  300 companies in Brazil determined to find what makes some companies more entrepreneurial  than others. In my research I’ve found that institutional theories explain pretty much this  phenomenon. Simply put, most part of the spontaneous ideas coming from employees just die  before being implemented because of the institutional practices that guarantee the daily  operations of the business remain right and efficient. Changes to processes coming from new  ideas, even for the good and proven right, hits the bureaucratic wall of forms, authorizations,  approval committees, and all sort of barriers that makes it hard for a regular operational employee  to overcome and get the benefits from implementing his/her ideas. 

Institutional practices happen in all organizations. The older, the bigger and the more  complex the organization is, the more policies, controls and rules they tend to have. If innovation  is part of the competitive strategy of an organization, they will eventually find ways to welcome  ideas coming from employees by bending some of their rigid and bureaucratic structures with  flexible work hours, open budget lines, tolerance to failed projects, resources, support,  discretionary time, achievement-based compensation models, or career opportunities.  

Thanks to these measures, an innovation-based culture starts to flourish and employees  feel they can come up with creative solutions to their daily tasks. By offering incentives and  lowering bureaucratic barriers organizations were successful in inducing this entrepreneurial  behavior in their employees. The problem was that in order for companies to have  entrepreneurship as part of their culture, they have to nurture the three components of  entrepreneurial orientation among their employees: a) the capacity to innovate; b) the capacity to  act autonomously and c) the capacity to take risks. Since the employees still face restrictions in  taking decisions on their own and even less to take risks, we can’t say these employees are  intrapreneurs, although the organization is making its first steps toward an entrepreneurial  oriented organization.  

In summary, a company can be innovative, but to become an entrepreneurial oriented  organization, it would require to include autonomous behavior and risk taking and that can be too  much for most companies, unless they can hand pick their employees who deserve such  privileges and now it is easier to see why managers play a key role in this process. 

Induced vs autonomous behavior. 

Real intrapreneurs practice autonomous entrepreneurial behavior. In other words, these  employees act with the entrepreneurial mindset. They take ownership of their ideas and they feel  responsible to implement their ideas and collect the direct results from these ventures. Unlike the  induced behavior employees, whose motivation relies in external rewards, like career progression, 

financial compensation or exposure, intrapreneurs are moved by intrinsic motivation when  engaging in promoting changes or implementing new ideas. After learning the stories of  intrapreneurs in 15 different companies in Brazil for my book, I’ve learned that intrapreneurs just  want to see things happen, they challenge themselves to be better, to keep learning, to overcome  obstacles, just the satisfaction of going beyond the limits to generate meaningful achievements. 

There are intrapreneurs in all organizations. Most of them are hidden in their departments,  trying to contain their impulses. While induced employees only raise from a favorable and safe  environment for their initiatives, intrapreneurs just can’t help themselves. When they feel pushed  to change something regardless of the available resources, the extrinsic rewards, or whether they  have support or not, nothing can stop them. They know things can go wrong, but they don’t fear  the consequences, they bet their job and their career on their ideas. They act autonomously and  they take risks, therefore they comprise all the three components of the entrepreneurial  orientation spectrum. 

Managers’ pull and push forces 

As you learn more about intrapreneurs you may recall some examples you’ve met or even  managed along your career. If you can portrait a typical intrapreneur, you may agree how  important they are for the organizations, but you will also probably agree that these employees  can also be dangerous. They refuse to follow orders, they go rogue when they want, they struggle  to fit to the model, they can be rebellious and undisciplined. It is not rare to find great intrapreneurs  who are constantly causing troubles and keep jumping from job to job. Here is the conflict. How  can we develop and nurture intrapreneurs and, at the same time, control them? If that is even  possible.  

Answering this question was the goal of my most recent research in the topic. I  interviewed the middle management level of 10 large entrepreneurial oriented companies in Brazil  and the results showed me how unique management style intrapreneurs require.  

Intrapreneurs need freedom, but they have to earn this freedom. Managers offer them all  sorts of experiences to prove they deserve to go free with their independent projects. The  manager-intrapreneur relation is very personal, on case-by-case relation, because intrapreneurs  are unique and rare. Extensive corporate policies can be applied to all the employees in general,  but intrapreneurs. When an obstacle happens, a normal employee feels scared and just abandon  the project. Intrapreneurs face it as a challenge. Managers have to know when to push the  employee to overcome that obstacle and when to pull intrapreneurs from taking unnecessary  risks. This balance happens in all aspects that differentiate autonomous intrapreneurs from  induced employees. Not all managers can face these circumstances unless they have years of  tenure in managing people and a very good eye to see the hidden talents of their team. In other  words, just intrapreneurs can ‘manage’ (better say: guide) intrapreneurs. 

Dr. Marcos Hashimoto 
Managing Director, Turner School of Entrepreneurship and Innovation – Bradley University 

Further reading:

Christensen-Salem, A.; Mesquita, L. F.; Hashimoto, M.; Hom, P. W.; Gomez-Mejia, L. R. (2021) Family firms are indeed  better places to work than non-family firms! Socioemotional wealth and employees’ perceived organizational caring,  Journal of Family Business Strategy, Volume 12, Issue 1, (Available in: 

Gjergji, R.; Lazzarotti, V.; Visconti, F. (2022) Socioemotional wealth, entrepreneurial behavior and open innovation breadth  in family firms: The joint effect on innovation performance. Creativity & Innovation Management. Mar2022, Vol. 31 Issue  1, p93-108. 16p. DOI: 10.1111/caim.12478.

Letter Comments

Notify of
Inline Feedbacks
View all comments