What Is Intrapreneurship and How Can It Support Corporate Innovation?

Many companies acknowledge the benefits of encouraging employee initiatives, yet successful intrapreneurship is still the exception rather than the rule. In fact,?70% to 90%?of intrapreneurial initiatives in large organizations fail.

Why is that the case, what’s the role of intrapreneurship in large organizations and how can you make it work? In this week's newsletter we’re explaining the role of intrapreneurship in driving more innovation, we'll provide some actionable tips on how to succeed at intrapreneurship, and how to avoid the common pitfalls that can lead to failure.

What is intrapreneurship?

Before we get started, it’s important to clarify what intrapreneurship is and why it’s an important topic in the corporate innovation conversation.

Intrapreneurship is defined as?entrepreneurship inside of an existing company. It refers to the new businesses or ventures created within a large or established organization.

The term was first used to talk about the “dreamers who do”, those who have a hands-on approach to follow their vision and develop their ideas into innovations within an existing corporation.

Intrapreneurship is also about?turning attention towards internal capabilities?and looking into ways to develop new innovations. At its core, intrapreneurship is about the value people can bring through their entrepreneurial thinking.

Why should organizations support intrapreneurship?

To understand why intrapreneurship plays an important role in driving more innovation we should start by looking at the current Fortune 500 companies. 88% of the organization that made the Fortune 500 list in the 1950s are no longer active or relevant today.

These figures are worrisome and show that companies shouldn’t put all their eggs in one basket. Instead of solely focusing on improving and optimizing existing business in their current areas of success, they should also try to find new ways of driving and sustaining growth with innovation.

Intrapreneurship has become an important component in corporate innovation and here’s why more organizations should take it into account.

• It enables continuous innovation

The first thing to consider is that intrapreneurship drives the development of new products and services. Intrapreneurs operate slightly differently than employees who work by the book.

They are self-starters and go beyond the organization’s core to follow their vision. Intrapreneurs have a hands-on approach to create innovation internally. They pursue their ideas, and they want to be successful and are willing to put in the effort to make that happen.

• It provides a competitive advantage through continuous organic growth

When it comes to intrapreneurship, it’s important to set the expectations right. It might not be very realistic to think employees in every company can create the next PlayStation or Gmail. Instead, intrapreneurship is about creating value and a long-term vision. You don’t have to worry about creating a huge new business from the beginning.

Enabling people to take initiatives and providing them with the resources to act as intrapreneurs will allow for more ideas to flourish and new opportunities to arise. In the long term, you will see an organic growth that can put you ahead of your competition.

• Contributes to an innovation culture

Working in an organization that is openly encouraging ideas and entrepreneurial thinking can be a game changer for employee experience. Your commitment to support intrapreneurship encourages employees to take initiative, be independent and accountable, as well as responsible for their development and growth.

A?Deloitte?survey showed that a big percentage of Millennials seeks meaning in their work and opportunities for progress. When people are allowed to practice their entrepreneurial skills, they embrace change and become resilient to risks and failure.

• Attracts and retains top talent

As many as?70% of entrepreneurs?had their idea during a previous job. This can only make us wonder, what would have happened in those companies if their entrepreneurial spirit would have been encouraged internally.

There is a real war for talent, companies fighting for the best employees. But they often fail to support existing intrapreneurs in the organization and don’t encourage their entrepreneurial thinking enough.

Key success factors for intrapreneurship

Steve Blank?was recently explaining why innovation heroes are a sign of a dysfunctional organization. This is what happens with intrapreneurs that struggle inside of an organization. If they are persistent enough, they become the heroes, that against all odds, managed to push innovative ideas further.

However, these heroes need more than a bonus. They need resources, a culture that encourages experimentation and processes for non-standard situations like the one in which intrapreneurs usually operate. These are some of the key success factors for intrapreneurship.

Leadership commitment

The wrong approach from leadership can be a big road blocker for intrapreneurship, but what is the right approach?

What should you, as a leader, do differently to encourage and sustain intrapreneurship?

• Recognize intrapreneurial traits?and be invested in cultivating them in a strategic manner
• Define and communicate the mission and the vision?of the organization and show your openness and flexibility to ideas. Emphasize that proactivity and entrepreneurial thinking are valued and rewarded
• Give people creative tasks?that relate with their passions and interests. You can encourage them to go beyond their job description and share ideas through an idea challenge around a specific problem that requires creative solutions. This way you can also recognize the intrapreneurs that might not have been visible until then.
• Assign responsibilities and owners. It’s not easy for everyone to share their ideas, especially if they are unsure who’s in charge of taking those further. Ideally, you have an ideation process in place where you assign people responsible for new ideas.

Allocate resources

Intrapreneurs, unlike entrepreneurs have the resources of an established organization. At least in theory.

Organizations should think of intrapreneurship as a capability that needs support, just like the human resources or marketing departments. This also means that clear responsibilities, incentives and development opportunities need to be drawn and included in a process.

There are many things you can do to make sure intrapreneurship gets a piece of the cake too. For example, the?70-20-10 rule of innovation?can be a structured way of managing innovation and allocating resources throughout the organization.

Build the right culture for intrapreneurship

Culture is one of the biggest roadblocks for innovation performance and a poor corporate culture can also stand in the way of intrapreneurship.

Jeff Bezos was saying that “you can write down your company culture, but when you do so, you’re discovering it, uncovering it – not creating it”. So, a first step is to look at your current culture, its strengths and things that stay in the way of intrapreneurship. Then you can see what needs to be changed in the long term.

Cultural change starts from the top, with leaders committed to take actions required for intrapreneurs to thrive. However, it happens at the bottom where people’s behavior has the real impact on how the organization is performing.

A culture of intrapreneurship should be reflected in the commitment to people, dedication to continuous learning and openness to experimentation. Apple is an example that shows a culture of intrapreneurship in practice.

Their most popular products are the results of a culture that supports creativity, experimentation, and entrepreneurial thinking.

Manage innovation systematically

Innovation management?is a very complex topic but also a key element that contributes to intrapreneurship success. Managing innovation in a systematic way will make it easier for entrepreneurs to come up with ideas and for you to prioritize, evaluate and validate them.

For example, companies with an intrapreneurial approach have a decentralized structure where decision making is delegated to the bottom level, so those with the knowledge and ideas can act independently.

It’s important to look into the possible methods and processes that could support your needs and then choose the right tools for the job.

Conclusions

To conclude, it’s important to emphasize that intrapreneurship is by no means the ultimate solution for companies willing to innovate. It can’t solve all problems. There are many other elements that make a company more innovative, and intrapreneurship is just one of them.

Most importantly, we should point out that intrapreneurship is not just about doing things a certain way within a specific process.?It’s more of a mindset?that enables you to think and act in a way that encourages and supports innovation.

Making innovation systematic and part of the organization’s culture takes time and there are different ways to get there. Encouraging intrapreneurship is one of the methods that can boost innovation efforts.

Having said that, keep in mind that intrapreneurship should not be about the hero employees who struggle to bring creative ideas to life. Intrapreneurs have to be supported at an organization-wide level so they can bring lasting results.

To help?leaders and entrepreneurial-minded employees?drive innovation with intrapreneurship, we've put together a practical guide with tools, tips and methods.?You can?download the toolkit here.

Article by Diana Porumboiu, first published at https://www.viima.com/blog