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NimbleLeadership

Deborah Ancona, Elaine Backman,

and Kate Isaacs | page 070

Nobody really recommendscommand-and-control leadership anymore. But no fully formed alternative hasemerged. So mature companies often struggle to balance the need for innovationwith the need for discipline.

The authors studied two exceptions: thenew-product-development stars PARC and W.L. Gore. Both companies, they learned,have three distinct types of leaders. Entrepreneurial leaders, found at lowerlevels, create new products and services and move their firms into unexploredterritory. Enabling leaders, in the middle, make sure the entrepreneurs havethe resources they need. And architecting leaders, near the top, monitor culture,high-level strategy, and structure.

This system allows both companies to beself-managing to a surprising degree. Employees choose their work assignmentsand dream up new projects, whose success rests on colleagues’ volunteering tojoin in—making the companies collective prediction markets. And the mechanismsthat enable self-management also balance freedom and control: The companiesfunction efficiently and exploit new opportunities even as they minimize rules.

HBR Reprint R1904D

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TheSoul of a Start-Up

Ranjay Gulati | page 080

There’s an essential, intangible somethingin start-ups—an energy, a soul. It inspires enthusiasm and fosters a sense ofdeep connection and mutual purpose. While this spirit persists, engagement ishigh and businesses keep their edge.

But all too often, companies lose theirsouls as they mature. Firms add new systems and structures and bring inexperienced professionals—and in the process somehow crush their originalenergizing spirit. In research into more than a dozen fast-growth ventures and200-plus interviews with founders and executives, the author has discovered howfirms can overcome this problem. His work shows that there are three crucialdimensions to a start-up’s soul: business intent, or a loftier reason forbeing; unusually close customer connections; and an employee experiencecharacterized by autonomy and creativity—by “voice” and “choice.” All threeprovide meaning to stakeholders.

Drawing on the experiences of Netflix,Warby Parker, Study Sapuri, and others, this article describes how sizablecompanies can still protect and nurture

the three elements. Doing that is thesecret to staying great as you grow.

HBR Reprint R1904E

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TheOne Thing You Need to Know About Managing Functions

Roger L. Martin and Jennifer Riel

page 088

There’s a secret about strategy that no onetells you: Every function has one, whether or not it is written down andwhether or not it is the product of an official strategic-planning process. Iffunctions do not adopt a strategy consciously, they almost inevitably end updefaulting to one of two unconscious models, both of which are likely to resultin their becoming a drag on corporate performance rather than a driver of it.

Most leaders acknowledge that companies andbusiness units need strategies. But for corporate functions—shared servicessuch as IT, HR, R&D, finance, and so on—the need for strategy is lesswidely understood. In many firms, functions just exist, serving the company inwhatever manner and at whatever scale the business units demand.

In this article, the authors describe theproblems of the unconscious strategies and outline a strategy-making frameworkto help functions strengthen the capabilities that set their company apart.

HBR Reprint R1904G