Intrapreneurship – A Path to Innovation

The term “intrapreneurship” was coined by Gifford and Elizabeth Pinchot, although the concept existed in different forms prior to Pinchot’s book.

This term has gained in popularity over the years. In 1990, Rosabeth Moss Kanter discussed the need for intrapreneurial development as a key factor in ensuring company survival in her book, “When Giants Learn to Dance”.  In 1992, The American Heritage Dictionary included the term to its dictionary, defining it as “a person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation”.

Intrapreneurship is a strategy for stimulating innovation by leveraging off corporate entrepreneurial talent. As Human Resource Professionals, what can we do to support this strategy, should it be adopted by our respective businesses?

This strategy requires empowered employees who are comfortable with being change agents, suggesting new ideas and promoting their execution. The environment must be encouraging with a degree of freedom to innovate.

A key element of intrapreneurship is the ability of the company to support, with financial and technical resources with expedited decision-making processes. The company should be comfortable to break with tradition to re-invent itself if necessary. The leadership must also demonstrate an appreciation for this strategy and really actively listen to the various ideas that surface. Constructive failure and big victories should both be embraced. The company should cut the red tape and bureaucracy and hasten the process from idea to execution. Louis V. Gerstner, Jr. talked about this in his book “Who Says Elephants Can’t Dance”, which described an IBM that can also be agile and reactive to change even though it was large company.

These tough economic times force us to be inventive. We must create a culture that supports innovation and takes calculated risks.  We must listen, allow failures, reward successes, share credit, be willing to break tradition and precedents and be ready for a renaissance if necessary.

According to Gifford Pinchot’s out-of-print book “Intrapreneuring, Why You Don’t Have to Leave the Corporation to Become and Entrepreneur:”
1.    Do any job to make your project work regardless of job description
2.    Share credit wisely
3.    It is easier to ask for forgiveness than permission
4.    Come to work each day willing to be fired
5.    Ask for advice before asking for resources
6.    Follow intuition, build a team with best people
7.    Build quiet support for the idea
8.    Never bet on a race unless you are running in it
9.    Be true to your goals but realistic about ways to achieve them
10.    Honour your sponsors.

Some of the above may have you wondering about this concept. “Come to work each day willing to be fired”, not sure if my heart can take this emotional roller coaster of highs and lows?.

If this intrapreneurship concept is successful in your company, how do you compensate the person or people behind it and then how to retain them? Depending on the success of this, the employee/s may just form their own company and then transition to being entrepreneurs.

This requires a sound, transparent incentive system.

EVA™ maybe a consideration as a way to reward employees. EVA™ is a measure of a company’s financial performance based on residual wealth calculated by deducting the cost of capital from its operating profit.

Steve Jobs, C.E.O of Apple has described the development of the Macintosh computer as an intrapreneurial venture within Apple.

3M has reaped the rewards of intrapreneurism. They have a standard policy that allows all employees to work on developing their own business ideas at least 15% of the time they are at work. 3M’s post it notes and its entry into the health care industry are results of pursuing intrapreneurism.

It is most often the case, only when we are faced with adversity, then we are forced into greatness.  This applies to companies and to individuals. Successful entrepreneurs have said that the day they got fired was the main turning point in their lives, but they probably would have still been in the “rat race” if they were not forced to seek alternative sources of income.

Denise Ali
[email_link]

Innovation is a Must in This Guava Season

guavaIn this Guava season (a local Trinidad saying for hard economic times); we really need to be innovative and creative in our approaches to income or revenue replacement, operational efficiencies and smart cost reduction.

Let us be real… there is only so much cost reduction a company can engage in, as after a break even point, it starts to eat into the revenue generation line. Operational efficiencies, as well, have a point where the service or product maybe compromised due to pre-occupation with cutting corners, maybe even resulting in more cost down the road.

We should be encouraged to look at the revenue generating line in the income statement and work backwards. What we need is to see the opportunities in our current reality and assess our resources and capabilities to determine how, and to what extent we can take advantage of these opportunities. This resource based view maybe most practical even when resources are scarce.

The beautiful thing about innovation is that it may not be bounded by current constraints, resources or otherwise. In that case, the sky is the limit, so let the dreamers dream big, and let the practical folk shape, cut and mold the idea into reality.

Does this contradict my “work backwards” approach?

Innovation is an important avenue for companies to explore as a possible source of competitive advantage. The link between innovation and competitive advantage depends on a number of things. The harder it is for competitors to imitate the innovation, the more likely it is to lead to a sustainable competitive advantage.

Innovations that also reflect our current market realities are also more likely to be successful. Innovations that leverage off readily available capabilities or technologies may be more successful in a shorter time frame. One runs the risk of spending so much money on research and design before a “Johnny come lately”  improves on what was done by an iota of effort, cashing in “big time.”

Consistent with the balanced scorecard methodology, the top line is the positive financial results we all want, followed by the customer perspective. We achieve positive results when we satisfy our customers or exceed their expectations. We are able to deliver on that because we may have superior internal processes and systems, some of which maybe a result of the ideas that result from the foundation people perspective.

As a HR professional, what does this mean for us? Innovation and creativity are a function of the range of people diversity that exists in our companies. Do we embrace diversity, harness it and leverage it? Or are our systems, procedures and performance management systems so structured that we force fit our diverse Caribbean people into our own image and likeness?

Maybe we do it and we are not even aware that we do it.

When we examine our orientation systems, our performance management and training and development systems, these would inform the degree to which we embrace variety and reward conformity. This may be a time when we need to tap into our human capital diversity as a foundation source of competitive advantage. Ideas come from people, so if want more and better ideas, we need to nurture our people.

Diversity provides the potential for greater innovation and creativity. Diversity refers to age, colour, race, disability, education, ethnicity, nationality, family status, gender, sexual orientation, generation, language, life experiences, lifestyle, religion, physical characteristics and so much more.

Inclusion is what enables organisations to realise the business benefits of this potential. According to the Society of Human Resource Management in the U.S “ Inclusion describes the extent to which each person in an organisation feels welcomed, respected, supported and valued as a team member. Inclusion is a two-way accountability; each person must grant inclusion to others and accept inclusion from others. In such an environment, every member will tend to feel more engaged and more enabled to full contribute toward the organisation’s business results. This requires people from diverse backgrounds to communicate and work together and understand each others’ needs and perspectives.”

First off, we should understand and assess the range of diversity that exists in our respective companies and then prepare a business case for diversity ensuring there is a constant alignment to key business objectives. The assessment will influence the design of the intervention. What percentage of women do you have in leadership positions? What generations are in leadership roles?

We received complaints in my own company that the new employees don’t say “good morning” or have basic manners and no respect for tenured people. These comments came from the Baby Boomers and the Generation Xers about the millenials.

What percentage of your workforce is above fifty years old? These are a few questions / comments to look at for the assessment activity.

We must also cite examples of where companies have benefited from their diversity networks. Communication is a simple element that is heavily impacted by similarities and or differences among the various stakeholders. Frito Lay (PepsiCo) has an extensive diversity and inclusion programme with an active employee communication network. They introduced the successful guacamole chip; this was influenced by their Mexican employees’ feedback.

The support from the top for inclusion must be unwavering and he or she must be the chief communication officer. The communication plan should use a stakeholder approach to ensure the communication is specific and pointed to the audience, the message, the messenger, the mode of communication and the frequency of communication.

The diversity initiative design process should address metrics and diversity training. The metrics must be linked to the changes wanted which is linked to the assessment results. Accountability for progress, results, and its link to business objectives must be built into the intervention. The training must be designed to close the gaps that are subsequently recognised. The training should also include the on boarding process for new employees. The intervention should be simple and meaningful. For creativity and innovation to flourish, people must be allowed to fail within parameters and not be daunted by adversity.

Our policies must all be in alignment and not contradict each other. For example, we can’t say we want to attract the millennial generation and then have no support for work life programmes. Or our sexual discrimination policy only speaks to women being sexually discriminated against, when men are also in scope of this happening. All the HR elements must work together in unison to yield quality outcomes.

Another option we can explore during this guava season is the idea of “Intrapreneurship”.  I will write about this in my next article!

Denise Ali
[email_link]