What is the biggest threat to your organization, right now?

Many organizations would answer “our competition.” In the race for sales, customer loyalty, and market share, it’s easy to look over your shoulder at the other lanes and feel like your biggest threat are external.

This leads many organizations to ignore a deadly internal threat: resisting disruptive innovation which hinders them from adopting the attributes needed to achieve exponential growth. We call this phenomenon the corporate “immune system.”

Like the body, organizations have immune systems too. The immune system of an organization naturally rises out of systems, procedures, and employee mindsets working its utmost best to stay in the comfort zone of past successes and keep the system running smoothly by the status quo.

However, an organization’s immune system can also become hyperactive. When this happens, it can’t tell the difference between an innovative opportunity and a perceived threat. The organization’s immune system will go on overdrive to attack and disarm any disruptive innovation or new element threatening to change how the organization’s body currently functions.

When an organization’s immune system is triggered to drive out change or disruptive innovations, something very dangerous happens. The organization misses out on crucial new market opportunities transforming the industry, which inevitably leads to self-collapse.

The Immune System Will Fight Any Change, Even Change For Good

I’ve learned from experience that when you’re attempting disruptive innovation inside a big company, the immune system of the company will attack you. I experienced this for myself back in 2007, when I was building out Yahoo!’s Brickhouse incubator.

I had put together a team of developers; some from within, others from outside. It was, briefly, one of the best development teams in the world (certainly everyone at Yahoo! wanted to work there). But Yahoo! wanted Brickhouse to build new products and services for the core organization rather than to create new markets for the company.

Needless to say, within weeks of Brickhouse’s launch, all vestiges of autonomy at Brickhouse had dissolved, and feelings of jealousy and resentment toward the newcomer swept through the company. (“Why do they get the best employees?” “Are they competing with my product?”).

By the end of my tenure at Yahoo!, I was spending 80 percent of my time fending off the company in an effort to protect my Brickhouse teams. Clearly a no-win situation for all parties.

Eventually, in 2008, in the wake of an attempted Microsoft purchase, Yahoo! killed Brickhouse despite it having, against all odds, launched several products that truly pushed the edges of the consumer Internet. And although Yahoo!’s immune system won that particular battle, the company ultimately lost the war.

6 Ways To Bypass The Immune System & Adopt Disruptive Innovation

From my own experience, I know it can be hard to fight your organization’s current immune system when trying to implement disruptive innovations. After all, the immune system rose up to protect the organization in the first place!

Here are six different ways you can help your organization to adopt disruptive innovations and drive exponential growth, without triggering the immune system to resist the change:

  • Only go after new markets (to avoid the immune system response). If you want to transform an existing cash cow or leapfrog a current business unit, you need a stand-alone unit with a small team that is isolated and fully autonomous.
  • Establish direct support from — and a direct formal link to — the CEO. Whatever you do, do not settle for any other reporting line below the CEO.
  • Spin out versus spin in. If you are successful, spin everything out and create a new company; don’t try to wedge the emerging business back into the mothership. A new enterprise won’t fit in neatly anywhere and internal politics will ensue, especially if you are cannibalizing an existing revenue stream.
  • The only exception we’ve found is when individual Enterprise Exponential Organizations (EExOs) are part of a larger platform play like Apple’s products, which start out at the edge and are brought into the center.
  • Invite the most disruptive change-makers from within your existing organization to work on your ExO. Management expert Gary Hamel has said that young people, dissidents, and those working on the geographic and mental peripheries of your organization are the most interesting, free and open thinkers. Look for rebels. The good news is that they won’t be difficult to find.
  • Build your Exponential Organization (ExO) completely independent of existing systems and policies. That includes actual physical separation. Try hard not to use existing premises or infrastructure unless they deliver a huge strategic advantage. As with any new startup, it’s critical for a new ExO to operate as a greenfield operation, relying on stealth and confidentiality.

As Steve Jobs said, “We run Apple like a startup. We always let ideas win arguments, not hierarchies. Otherwise, your best employees won’t stay. Collaboration, discipline and trust are critical.”

This is a guest post by Salim Ismail, author of Exponential Organizations, edited from its original version as published here.