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From the Kingdom

The innovation needed to maintain your organization's dominance in the market is so successful that - perhaps unexpectedly - you are poised to enter the frontier.

The challenge is to transform this frontier market into part of your organization's kingdom before anyone else has a chance to create significant competition. Leaders of every ruler organizations dream of this happening. Yet when it does, it typically creates great (though temporary) stresses and disruptions. If these can be weathered and worked through - and usually they can be - then your ruler organization has an excellent chance of dramatically expanding its empire.

Ruler organizations have the resources to follow the development trail wherever it goes, and to adequately support it with people, marketing, technology, or whatever is needed to make the new product or service a success. Most ruler organizations spend large amounts of money attempting to come up with these breakthroughs, because they know that scoring on even one will provide excellent margins and income for many years. These margins, in turn, can support further R&D efforts (as well as the other expensive attributes of a ruler culture). However, such breakthroughs are rare, and may elude an organization for many years, forcing it to rely on its standard product and service lines and extensions thereof.

As any R&D person can tell you, the discovery process is often quite unpredictable and chancy. Furthermore, once a new product or service has been invented, it may not be recognized as a breakthrough, at least at first. This can be true not only among potential customers, but within the organization itself. Leaders in ruler organizations are not always willing to fully accept what an innovation or new technology can lead to or where it can take the organization. In part this is because of the big internal disruption they know it will cause; in part it is because other product or service lines - and other agendas - are often more demanding of their attention.

Key Issues
Managing the opportunity
Breakthrough opportunities do not necessarily present themselves at ideal times. It may not be easy (or politically viable) to take time, money, and people away from other priorities so that the new product or service gets everything it needs to succeed. While rulers have the resources to provide such support, they are usually fully deployed in other pursuits. Management therefore needs to create an environment within the organization for the new product or service to succeed. Usually the required technology, production, and marketing resources already exist; the trick is capturing them away from other priorities and, as much as possible, adding to them. It also means helping everyone in the organization to see the potential of the new idea.

When a ruler's potentially breakthrough product or service fails, it is typically because management has been able to sell the idea within the organization and capture the right amount of support. For example, several companies could not see the potential of plain paper copiers when the concept was presented by its inventor. As a result, they lost a huge opportunity that Xerox capitalized on.

Moving quickly enough
As a result of competition, evolving technology, and greatly-improved processes, new products and services can now be brought to market much more quickly than in the past. Yet ruler management is not used to moving fast. Thus managers need to find ways to accelerate the pace of development so that the new product or service can keep pace with life in a frontier. This is not easy, since the prevailing notion among inventors is that much of what happens is serendipity and is not subject to planning or programming.

Allocating sufficient resources
Ruler organizations do not have to beg investors for resources. This saves a great deal of time and effort, and gives rulers a distinct advantage when they enter the frontier. However, if managers must spend too much time begging for resources internally, or constructing elaborate business cases or plans, they may lose some or all of this advantage. If management in your own organization cannot or will not provide the necessary resources in a timely fashion, you are probably better off not attempting to enter the frontier. Instead, sell off the new product, service, or process to another organization.

Managing the vulnerability of the new product or service
New products, services, processes, and concepts are fragile and vulnerable. They can easily be dismissed or viewed as distractions from the business at hand. They need to be protected from too much management scrutiny, especially early in the development process, as well as from other parts of the organization, which may view the new venture as competition, or even a threat.

Common Difficulties
Pressure to produce profits too soon
In a ruler organization, it is easy to forget that there is always a development curve for new products and services - and that living through the beginning of the curve is always costly and painful. There will thus be pressure to produce unrealistically strong results unrealistically fast.

This pressure needs to be managed, not disregarded. The struggle between forces that insist on additional time and patience (e.g., R&D) and those that fight to shorten the development stage (e.g., marketing) is natural and, to a point, even beneficial. Both are legitimate forces which must be balanced, mediated, and, if possible, synthesized.

Resistance from the bureaucracy
A ruler organization's bureaucracy is necessary to support its aggressive market control. Within this bureaucracy are leaders with agendas of all kinds that they would like to push forward. While a ruler culture normally encourages this, it is not particularly conducive to the development of a new product or service. Some leaders, who are trying to build their own internal fiefdoms, will try to make it quite difficult for the new enterprise to secure resources. They will do this indirectly by withholding help, prioritizing other products and services, or distracting the attention of management.

Furthermore, some ruler managers may actually support and encourage this behavior, on the theory that new ideas need to prove themselves by surviving the bureaucratic gauntlet of resistance, subversion, and indifference.

Lack of focus
Ruler organizations need to resist the temptation to develop too many new products or services at once, based on the concept that if only one out of 20 (or 30, or 100) succeeds, the margins will more than justify the effort. (I once counted 26 new products being developed simultaneously in a single division of a manufacturing company.) The dangers here are twofold: first, that no one development effort is given the resources it needs to succeed, and, second, that some of those efforts may not support the strategic direction of the organization.

Another unfortunate but common result is that the most promising ideas get pushed aside in favor of the pet projects championed by managers who are better at pushing their agendas and getting their way.

Inappropriate leadership
The people who invent and develop new products, services, processes, and technologies are often made the early leaders of these new ventures. This is not usually a wise idea, however. Techies are not necessarily good business people, and seldom are they good managers. Indeed, many would rather not have to manage a project, especially the people issues. Yet how many of them are going to turn down an opportunity to spearhead a new venture? Even if they want to, few will dare, because their loyalty and commitment will be questioned forever after.

Furthermore, technical people are not always the most psychologically stable. I'm not suggesting that they have serious character flaws, but that the long hours and concentration needed to make something out of nothing can take an enormous emotional toll. There are notable exceptions to this, of course, but in my experience they are few.

Yet we somehow expect these people - who are typically more interested in ideas and things than in relationships - to secure adequate funding from management, create or determine the right distribution channel, roll out a product or service that is not yet well understood, handle all the people issues perfectly, and develop all the right relationships to make each of these things happen.

Solutions
Honor and support entrepreneurs
You will need to create a culture that honors, supports, respects, and thrives on innovators and entrepreneurs. This is particularly important for rulers, since this helps them stay ahead of the competition and maintain control of the market.
It will take consistent and powerful leadership to establish the necessary cooperative behaviors and attitudes. Many cross-organizational projects, associations, standing committees, reward traditions, and management development activities will be needed to supplant the natural political process that permeates a ruler system.

I once facilitated a meeting which included entrepreneurs from a pioneer division of a Fortune 500 company, as well as leaders from a ruler organization who wanted to learn more about developing new products. The pioneer types explained that, in their division, everyone was expected to share their knowledge, discoveries, equipment, and other resources with anyone else who was developing a product and needed help. Furthermore, no project numbers were ever asked for or provided; help was given without any expectations, or any need for accountings or justification. This arrangement totally astounded the ruler managers.

Protect the new product or service
Although there will be serious competition for resources within a ruler organization, this struggle is propelled more by politics than by scarcity. There may well be sufficient resources to do everything the organization wants to do, but each leader nevertheless does all they can to capture the biggest possible slice of the pie. This is normal in a ruler organization; in a culture based largely on protectionism, each manager is simply protecting their unit, division, or department from being seen as less important than some new upstart.

This means, oddly enough, that it is crucial to keep top management in the dark about a concept for a new-to-the-world product or service during its early phases of development. Once it does get presented to leaders, the new venture should be separated as soon as possible from the rest of the organization, so that it is not subject to as many political pressures.
The new enterprise might, for example, become a separate project with its own project manager. This person should report to someone in top management (ideally, a vice president or someone even higher up) who has a keen respect for the strategic potential of the enterprise.

At the earliest possible time, the new enterprise needs to be positioned internally as a legitimate product or service of the ruler organization. This should be done even if - indeed, especially if - the venture is a long way from producing revenue and becoming self-sustaining. This enables top management to remove many of the political concerns that may come from other units or divisions.

Proactively develop entrepreneurial management
Entrepreneurs within a large organization are not, at heart, very different from those who are just starting their own businesses. They typically have the same idiosyncrasies - e.g., a passion for innovation, a need for attention, and personal issues around control. Usually, they are not very good at - and are often naive about - corporate politics. Thus they can end up being vulnerable to the maneuvers of managers with more political savvy.

It is very difficult to develop entrepreneurial skills and attitudes among the ranks of typical ruler managers. It makes far more sense, then, to locate the entrepreneurial types - people who are comfortable working outside the organization's standard frames of reference - within the organization but outside of management, and proactively train them in management skills and techniques.

Finding these people and nourishing them is crucial to developing and marketing new-to-the-world products and services. Once trained, they will be able to set up an iconoclastic new enterprise and develop it into a ruler of its own kingdom market - at which point the larger organization will be able to assimilate it easily.

This means several things. First, you need to be finding and developing these people regardless of whether your organization has (or is even working on) any new-to-the-world products or services. Second, this selection and training process can't be haphazard or casual. You need to create a very deliberate process to find these folks within the present ranks. Third, never lose sight of the fact that these people are willing to go up against the accepted norms and stretch your organization's ability to allow for diversity in thinking. They will begin doing this long before there is a need for them to do so - or even a new pioneer enterprise for them to do it in. This means protecting them from any potential wrath or punishment from the people in the ruler organization whom they may challenge. It also means being very clear with them about the difference between what the organization needs from them right now, and what a new pioneer enterprise may require from them in the future.

In a ruler organization, entrepreneurs are both vulnerable and difficult to live with. For this reason, it is important to have places for them to go, coaching from top managers, and ways for them to feel that they are valued by the organization. Reward them as best you can without incurring too much political fallout from other quarters. Encourage them to meet with, support, and coach each other. Help them to set up support mechanisms that will be useful to other people like them.

Make resources reasonably available
The struggle to obtain resources can make life very difficult for entrepreneurs. If this process takes on too much political baggage, they will lose much of their commitment and motivation, and may even leave the organization. Furthermore, if a pioneer leader is too busy trying to find resources for their project, the necessary work will not get done, deadlines will not be met, everything will slow down, and some other organization will gain the all-important first foothold in the market. It is critical, therefore, that management prioritize projects and give the leader of the new enterprise the resources they need.

Allocate development funds strategically
All of the above underscores how important it is to let go of many of the traditional attitudes about developing new products and services. In the 21st century, new offerings simply will not make it to market fast enough if management has a laissez faire attitude about them or does not make a sufficient commitment to the necessary technologies.
Furthermore, in the 21st century, even ruler organizations cannot afford to support a wide range of eclectic development efforts, especially if some are funded not for sound business reasons, but because they are the pet projects of managers who have created politically protected environments. Top management must weigh each project against the organization's strategic direction. Then they need to take a deep breath and say no to anything that doesn't support that direction.

The risk of not doing this is that your organization could develop some wonderful and lucrative new-to-the-world products and services, yet still spend more on development than those new offerings bring in. For many rulers, this is a very difficult lesson to learn.

Adaptation Issues
Helping managers to understand and accept the pioneer enterprise
In developing new-to-the-world products or services, ruler organizations need to use a repeatable pattern or process. This avoids having to learn the same lessons over again. This pattern or process should include a mini-training course for managers - both entrepreneurs in the new venture and traditional ruler managers in the larger organization. The course should coach them on the following:

what kinds of people are needed to manage each phase of the new venture's development
what kind of structure is needed in the new venture
how pioneers can survive among rulers
the transition to a ruler organization that will occur should the new venture ultimately control the market
Planning for the transition to a ruler

The goal of the new venture is to conquer the new market and bring it into the ruler's fold. This needs to prominently and repeatedly communicated to everyone in the organization throughout the development phase. People need to understand from the start that the pioneer culture will not last indefinitely.

Most of all, the leader of the new pioneer venture needs to understand that if they succeed, the unit or division will be handed over to a ruler manager, who will then establish a ruler culture. They should also, of course, be assured that when this time comes, they will be well rewarded, and given another appropriate assignment.

Actually, managers in any pioneer organization would do well to frequently remind employees that their enterprise will probably move out of the frontier fairly quickly - normally within a year or two, and almost certainly within three or four. While it is possible for an organization to remain a hunter, a warrior, or a ruler for decades, the dynamics of markets make it very rare for an organization to enter a frontier and stay there for any length of time.

One final word on pioneer organizations in general: working in one is like living in a frying pan. Managing stress, both personally and organizationally, is essential. Regardless of what direction you've entered the frontier from, create some mechanisms to keep things from boiling over. Deliberately build some humor and other stress-reducing activities (meditation and yoga classes, exercise opportunities, goofy contests, etc.) into your culture. Encourage people to lighten up when they can - and make sure that you do the same.