Drive Innovation, Competitive Advantage and Customer Experience
The traditional perception of intrapreneurship being the domain of a few ‘exclusive’ individuals is being replaced by the recognition that a pervasive ‘intrapreneurial culture’, centered on the customer experience and driven by entrepreneurial values, is key to sustained innovation and competitive advantage. Some organizations, including the likes of Dell and Google, have formalized the role of the intrapreneur through official positions such as the ‘Entrepreneur In Residence’ (EIR) or ‘Chief Innovation Officer’, whilst others have sought to ‘buy-in’ intrapreneurs by acquiring start-ups with an entrepreneur in situ. Yet in this age of corporate austerity and intensified competitive threat, businesses need to create and foster intrapreneurial values and behavior across the whole organization if they are to stimulate widespread innovation, increase efficiencies and remain competitive. Defined intrapreneur roles can certainly act as catalysts, however intrapreneurship should be embedded in the overall culture of the business: adopted, accepted and celebrated as core practice and directed towards the organizational goals. Companies must therefore become versed in the methods and practices for activating and developing intrapreneurship if they are to meet the demands of today’s brave new world:
1. Look For It
Building an intrapreneurial culture isn’t about ‘creating’ intrapreneurs; invariably they already exist within the organization, they just need to be discovered, nurtured and loved! By identifying and understanding existing intrapreneurs, their endeavors can be encouraged and appropriately supported to enable them to flourish. Where the company doesn’t recognize intrapreneurs they are more likely to become disenfranchised as their natural efforts are undermined and quashed, further having a resonant disruptive impact on the wider team. Intrapreneurs don’t fall into a single profile; moreover a diverse mix of individuals exhibiting a range of intrapreneurial attributes, skills and personalities is optimal to drive innovation and value-generation across the business. Leaders must accept and not fear diversity, as it is a key stimulant of ideas; they should therefore look to assemble and unleash a diverse workforce if they are to maximize the intrapreneurial opportunity. By actively seeking and being seen to encourage intrapreneurship, by giving intrapreneurs the room to explore their full potential and range of interests, the company will build it’s brand in the talent market, giving an edge over it’s competition in being able to attract and recruit the most sought after individuals. It is important that as the organization recruits new talent, it proactively seeks people with intrapreneurial traits who will complement and augment the incumbent team.
2. Be Transparent
Company vision, goals and strategy are not the purview of a mere few. Owners and leaders must be transparent and candid with their teams if they are to stimulate and develop intrapreneurship, not just in providing a future direction, but also the realities of the now. Intrapreneurs are not renegades; they do not act as subversives to the organizational collective good. Intrapreneurial endeavors should always be conducted in the best interests and congruent with the overarching vision and strategies of the parent business. As such, intrapreneurs need to see the big picture if they are to bring new thinking and value that is aligned to the organization’s needs and goals. Their initiatives will be more relevant and productive if they have visibility and understanding of the wider context, as well as having greater scope to merge and align their ideas with others. Intrapreneurs, as employees, feel more empowered if they know where they’re going and why they’re going there.
3. Be Inclusive
Make people feel integrated and part of the company, no matter what their job is. Give them a sense of value and togetherness so that they are motivated to work for the best of the business and not just their own self-interests. Intrapreneurship is a win-win; it advances both the needs and success of the individual and the organization. If the intrapreneur is dis-enfranchised, there is a risk that they will take their ideas, equity and value-generated outside as either an entrepreneur or possibly a competitor. An intrapreneurial culture builds value across the workforce which is predicated upon giving people a voice in their own work. They need to feel empowered such that they have the scope to be able to contribute and make change.
4. Give People Ownership
To create an intrapreneurial culture, people must be empowered to make decisions – empowered to have ownership. In this respect, employees need to be encouraged to create solutions independently of the chain of command. This breads a fluid environment of rapid ideation and activity where individuals and teams are prepared to form views and make judgments, which ultimately create value for the business. The success of any venture is the summation of the decisions and thinking that contribute to it, whether from top down or the minute-by-minute decisions that go into all employees performing their tasks. In today’s knowledge economy, companies that foster independent thinking will better serve customers, build additional value and gain competitive advantage. Intrapreneurs are contributors.
5. Make Risk-Taking and Failure Acceptable
As intrapreneurs make decisions, they must be willing to take intelligent risks and, although fully prepared to be held accountable, not fear persecution or ridicule if they fail. Risk-taking and consequently failure are necessary components of progress that need to be accepted, understood and embraced by the organization. Failure is an important part of the innovation process, a signpost on a journey indicating which way not to turn (at that particular point in time). Organizations should therefore tolerate some failure and accept calculated risk taking. Not all ideas will produce successful new products, create more efficient ways of doing things, or lead to a strategic advantage. But all ideas can be a step towards each of these, either forwards, backwards, or pivoting to the side. In all failure there is success in producing a result; it may not be the result intended or desired, but it provides a learning experience allowing change to be made in order to generate a new outcome. Intrapreneurs must be prepared to take action on a daily basis in order to reach their desired goals; they need to be allowed to learn from every experience in order to progress. It is the responsibility of leaders and managers to develop a culture of learning from failure that moves on to the next, more informed attempt…otherwise known as experimentation.
6. Create a Learning Culture
Knowledge fuels and underpins innovation. It allows possibilities to be seen and explored; it informs and guides direction by providing context, insight and understanding which in turn lead to new thinking, ideas and solutions. In most cases, once people leave school or college proactive learning becomes sporadic at best. A core trait of highly successful individuals however is they have an un-quenching thirst for learning and personal development; they seek knowledge and insights in all their forms and actively pursue opportunities to augment. Not only is this through reading books, texts, articles or interviews in their given discipline; attending events, workshops or seminars; or searching and exploring content online, but also through interactions with others – everyday meetings and conversations, or time spent with individuals who can specifically build their understanding, i.e. people who’ve been there and done it before. This form of absorptive education is crucial for the development of intrapreneurs. Companies must imbue values of endless self-improvement, knowledge seeking and development through the definition, articulation and ongoing experience of their core values as a means of instilling these principles across the workforce.
7. Train Employees on Creating and Selling Innovation
One famously innovative company, Dreamworks Animations – the studio behind groundbreaking movie franchises including Shrek, Madagascar and Kung-Fu Panda – values and encourages creativity from all its employees, even support staff such as accountants and lawyers. According to Dan Satterthwaite, Head of Human Resources, they actively solicit ideas and regularly receive hundreds from staff across the business. Regardless of their defined roles, Dreamworks employees are specifically trained on how to pitch their ideas successfully, whether it involves creative input for a new movie or a food choice for the cafeteria. According to Satterthwaite: “The work that we do is so collaborative that we must have people who can not only sit at their desk and solve a problem, but then be able to articulate that solution to their supervisor and to the team.” All employees also have access to courses such as artist development, giving them the skills, knowledge and aptitudes that have enabled Dreamworks to repeatedly come up with the next blockbuster animated movie. This inclusive, high engagement culture has consequently led Dreamworks to consistently gain high employee satisfaction rankings as a great place to work. As Satterwaite puts it: “We challenge all our employees to be their own CEOs.”[i]
Allowing and asking for workers to pitch their ideas is a core element in developing an ‘open innovation’, intrapreneurially-led culture. Employees have their fingers on the pulse of the customer and marketplace, and hence are best positioned to spot new trends and see opportunities early. They should therefore be encouraged to contribute to the innovation dialogue of the business. Companies may not only solicit general ideas, but also ask employees how they envision solving specific problems, or to provide suggestions about new strategies and tools before they’re implemented. It’s important for the organization not to solely rely on formal, structured communications channels to gather and transmit ideas around the business. In order to gain widespread participation, ad hoc and informal channels should also be adopted – idea boxes, email addresses, intranet sites and wikis are all tools for accumulating input. The majority of ideas generated through such channels are likely to be limited to incremental innovations, i.e. doing things the way they always have been but better, rather than real break-through, new direction innovation. Incremental innovation can drive rapid revenue growth and cost savings, but is unlikely to provide new business streams or strategic competitive advantage. For the latter, these programs must be deployed in unison with wider intrapreneurship agendas and the intrapreneurs supported to see their ideas through to fruition. When a solution is developed, the business must assist the intrapreneur on the ground by providing expert and executive-level resources and advice in order to increase the chances of success and reduce time from idea to execution.
9. Offer Room to Play Around
A practiced method for promoting intrapreneurship is to give individuals allocated time away from their ‘day jobs’ in order to encourage their creative processes and support them in the development of new ideas and initiatives. This has generally taken two forms: internal one-hit ‘hackathons’, and providing ongoing ‘flex time’ or ‘tinker time’ to experiment with new ideas and side projects. These schemes provide employees with the room to play around outside of the mental confines and stresses of their prescribed roles. The concept has become increasingly popular across innovation-led companies, notably within the tech space, including the likes of Hewlett-Packard, Apple and Google where their “20 Percent Time” has famously given birth to products including Gmail, Google Earth, and Gmail Labs. Set aside innovation time allows individuals and teams scope outside of their daily responsibilities to scout for and test different ideas and approaches, which creates intrapreneurial value without diminishing or distracting from the ongoing function and development of the core business. One of the challenges with ’20 Percent Time’ is that it can be unfocused and lacking output; to counter this, LinkedIn launched their ‘InCubator’ program in December 2012, essentially operating as an internal ‘startup’ incubator. Engineers can get 30 to 90 days away from their regular work to develop ideas of their own into products; the program is highly structured with rounds of judging, including a final round with founder Reid Hoffman and CEO Jeff Weiner, to filter ideas and extract the most viable and potentially profitable new products. [ii]
10. Create a Safe Place for Innovation
Removing short-term pressure for immediate returns and taking a longer-term view on innovation is critical to giving intrapreneurial ventures the space to develop and succeed. Basing management decisions on a long-term philosophy, even at the expense of short-term financial goals is the first principle of ‘The Toyota Way’, the tenets that have guided Toyota over generations to become the world’s second largest car manufacturer (Forbes Global 2000 2012 [iii]) and one of the most innovative companies around. The revolutionary Prius hybrid electric model took nearly 5 years and an estimated $1 billion to develop, without any real understanding or sense of the market opportunity, simply a vision that hybrids were the cars of the future [iv]. It has gone on to sell over 2.6 million cars worldwide [v]. The need to meet short-term defined goals or deliver immediate financial results limits the ability for the intrapreneur to experiment and push boundaries; it restricts decision making by placing confining barriers on solutions. That’s not to say that intrapreneurs should be left unfettered, but added value will increase exponentially as a culture of innovation and continuous, ongoing improvement is developed over time.
11. Celebrate and Reward Intrapreneurial Behaviour
Celebrate intrapreneurial successes and the people behind them – whether individuals or teams, it’s important to give credit where it’s due. Recognition and reward will act as significant affirmations for the intrapreneur and provide them with reasons to stay, continue to add value and to grow their contributions in the future. Financial incentives such as profit sharing on ideas will reward for the risk, time and effort put into making the endeavor a success but equally, if not more significant will be playing to the psychology of the intrapreneur through public acknowledgement and endorsement. Recognizing intrapreneurs and calling them out sends other employees a powerful signal that innovation and activation are assets greatly valued by the company. Intrapreneurs also need to see prospects for career advancement within the organization as a key motivation for embarking on and pursuing their endeavor. If they don’t, they’re liable to move externally taking their ideas and the value that they’ve accumulated with them. Clearly the organization has some protection rights in terms of intellectual property, but the business will lose a vital resource and innovative force. Each organization must consider its own culture and values to determine the mix of incentives that will have the greatest impact.
12. Encourage Cross-Discipline Projects and Collaboration
A great misconception of intrapreneurship is that it is an individual sport. For any intrapreneurial venture to succeed, collaboration is key to stimulate and refine innovation and to execute efficiently and effectively. Companies therefore need to proactively create, encourage and facilitate ongoing collaboration between individuals and teams. The only rule that 3M places on their 15% of innovation time for each employee is that they must share their insights with others. Collaboration brings people and resources together to generate a whole that is greater than the sum of the parts, through a collective approach. It improves problem solving by combining experiences to short cut the learning curve as to what works and what doesn’t, eliminating time and resource requirements. Individually our knowledge is limited, it is only by working together that we can extend this to gain a fuller comprehension of the situation and identify possible scenarios or solutions, leading to more thought-through and consequently robust and effective outcomes. Collaboration also facilitates ownership; by contributing to the conception and development of an idea, the collaborators are more empowered and committed to make sure that it actually happens and succeeds.
13. Encourage Networking and Knowledge Sharing
Just as direct collaboration with others is key to fostering intrapreneurship, creating and maintaining a network of active relationships with external and, critically internal ‘influencers’ and ‘connectors’ is essential to building awareness, advocacy and momentum for intrapreneurial initiatives. Influencers are those people in the business who, whilst not directly being empowered to make specific decisions, hold knowledge and opinions that are recognized, valued and sought by those that are. Connectors are quite simply the individuals who connect ideas, resources and people within a business; they act as facilitators and conduits for intrapreneurs to both attract and seek out the necessary support to be able to progress their projects. They may or may not be power holders per se, but critically they have the necessary knowledge and relationships to make things happen: they know who to talk to on issues, who the decision makers are, where there are ‘pots’ of resources, who knows who, and what the key components are for projects to get sanctioned. In both cases, building exposure to these groups for the company’s intrapreneurs will create the necessary environment for new concepts to be identified, supported, developed, approved and ultimately succeed. Companies need to seed, encourage and promote networking horizontally and vertically, internally and externally, in order to maximize these informal systems so that intrapreneurship can thrive.
14. Focus on How to Better Serve Customers
By placing the customer at the beginning, middle and end of all decision-making, the intrapreneur creates the context and stimulus to generate, refine and execute ideas and thinking that are more likely to succeed. Creativity in of itself is irrelevant if it is not viewed through the lens of the ultimate consumer, be that a piece of art, a product, or an idea. Creativity does not, and cannot exist in a vacuum. The ‘value’ of an idea is only derived when it is active, i.e. when it is creating something new and better from the perspective of a customer experience (whether an internal or external customer). For something to ultimately be better, the consumer has to see, feel and believe that it is in fact better. Creativity in action equates to innovation.
15. Be Sensitive to External Changes
Creating an organizational ‘nervous system’ that is sensitive to external changes allows the business to innovate faster. Intrapreneurs need to think and react at speed if they’re going to stay ahead of emerging trends and opportunities given the constant flux of today’s markets and ever increasing competition. The organization therefore needs to provide its intrapreneurs with the intelligence to move quickly. Part of this is creating an internal and external data framework that drives consumable and actionable insights. However pure data alone is never enough; intelligence should always be augmented by a network of human gatherers who actively gain insights through building networks and contacts in the market. In this respect, it’s important to consider how this intelligence is consolidated and disseminated across the business. In most cases, highly valuable knowledge is usually retained and guarded by individuals or teams without sharing; only by pooling this will the organization empower its intrapreneurs to create value and drive competitive advantage.
16. Shorten the ‘Yes Chain’
One of the biggest challenges for any intrapreneur or intrapreneurial venture is to navigate the idea or initiative through the maize of corporate decision making to get to the ultimate sources of power that can actually sanction the project or provide allocation of resources. As organizations grow in scale and complexity the ‘yes chain’ becomes more complex and layered, making it time consuming and draining to reach the necessary conclusions. More often than not, the idea will never make it to the final ‘yes’. Key to Steve Jobs turning around the fortunes of Apple when he returned in 1997 was walking into the Design Team’s workshop and seeing the array of prototypes on the shelves, exclaiming: “My God, what have we got here?”[vi]. Under the previous regime the vast majority, if any, of these concepts would never have been seen by the ultimate decision makers; yet this was the birth of the stream of ideas that led to the iMac, iPod, iPhone and iPad. By shortening or circumventing the ‘yes chain’, companies can be more reactive to opportunities; drive innovation by activating a constant stream of ideas; and create a broad intrapreneurial culture leading to more engaged and empowered employees.
17. Create and Allocate a Funding Pot for Intrapreneurial Initiatives
One of the biggest hurdles for intrapreneurial ventures is the inability to secure the necessary resources, at the right time, in order to move the project forward. By carving out a funding pool specifically to be used to seed intrapreneurs, companies can enable greater traction for new ideas and thus increase the likelihood of creating new, sustainable business streams. In this respect, the business should act and apply the same principles and rigor as any investor would in the case of an entrepreneurial venture. Intrapreneurs must pitch their ideas and supporting business plans in order to access funding, and be held accountable throughout the development process. That said, the rule of ‘creating a safe place for innovation’ applies – don’t rush for immediate results by putting intrapreneurs under undue pressure to make quick returns; the greater opportunity for the parent business is to play a longer game to realise continuous value over time. It is important for all employees to understand the processes and criteria by which any funding is allocated so that they can align their pitches accordingly and that there is transparency and understanding when applicants are unsuccessful. This is a small investment for potentially significant gain, not only in terms of greater efficiencies, new revenue streams or developing competitive advantages, but in the wider benefits of fostering an intrapreneurial culture revolving around a more engaged, motivated and loyal workforce.
Intrapreneurship, alongside entrepreneurship, must be the solution to solving the enormity of the current global economic crisis. For companies to not only survive this environment but to be able to thrive, they need to proactively look to create and foster intrapreneurship and build an intrapreneurial culture across all employees. As Richard Branson puts it: “Perhaps the greatest thing about this form of enabled intrapreneurship is that often everyone becomes so immersed in what they’re doing that they feel like they own their companies. They don’t feel like employees working for someone else, they feel much more like … well, I think the only word to describe it is “belongers.” [vii]
[i] ‘Company values ideas, input from every employee – Dreamworks is believer in every employee’s creativity.’ By Anita Bruzzese, Gannett, USATODAY.com
[ii] ‘LinkedIn Gone Wild: ’20 percent Time’ to Tinker Spreads Beyond Google.’ By Ryan Tate. Wired.com, December 6th, 2012.
[iii] Forbes Global 2000
[iv] ‘Toyota: The Birth of the Prius’. By Alex Taylor III. CNN Money, February 21st 2006.
[v] Wikipedia: Toyota Prius
[vi] ‘How did a British polytechnic graduate become the design genius behind £200 billion Apple?’ By Rob Waugh, The Daily Mail 20 March 2011.
[vii] ‘Richard Branson on Intrapreneurs.’ By Richard Branson, Entrepreneur.com 31 January 2011.
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