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
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