Intrapreneurship

Defining Intrapreneurship

Intrapreneurship means behaving like an entrepreneur while working within a large organization.

Intrapreneurship means behaving like an entrepreneur while working within a large organization. According to social scientist Joseph Schumpeter, introducing new technologies, increasing efficiency and productivity, and generating new products or services are all qualities characteristic of intrepreneurs.

Intrapreneurs and Corporate Management

Intrapreneurship is now known as the practice of a corporate management style that integrates risk-taking and innovation approaches. It also incorporates the reward and motivational techniques that are traditionally thought of as being the sole province of entrepreneurship.

The intrapreneur acts as an "inside entrepreneur" who focuses on innovation and creativity while operating within the goals and environment of an organization. Intrapreneurs bring their ideas to the firm to generate new products, processes, or services and thereby act as a force for change within the organization. Capturing a little of the dynamic nature of entrepreneurial management (trying things until successful, learning from failures, attempting to conserve resources, and so on) adds to the innovation potential of an otherwise static organization without exposing those employees to the risks or accountability normally associated with entrepreneurship.

Theory and Practice

Incorporating entrepreneurial concepts into traditional corporate environments is easy to promote in theory: capturing the innovative attitudes of small start-ups within the larger organizational context (i.e., with more resources) seems intuitive. In reality, entrepreneurship is often much easier to discuss in a classroom than to integrate into an actual organization. There are many reasons for this that generally boil down to simple issues of size and corporate inertia.

Companies are built on structures and hierarchies which in turn create a dependable and repeatable operational process. This process leads to value creation, and efficiency is always a focal point in operational contexts. When innovation and intrepreneurship enters this equation they are often seen as costs without tangible and definite benefits, and as lacking consistency and applicability to the current model. In many ways, the benefits of intrepreneurship are difficult to forecast and thus difficult to justify. As a result, good managers must be long-term oriented and open-minded in order to capture the benefits of instilling an intrepreneurial spirit.

Building Support for Intrapreneurship

Building internal support for intrepreneurship is a prerequisite to creating meaningful change in an organization.

Building support is important when you are bringing change to the organization. Employees bold enough to be intrepreneurs must recognize the challenge they are taking on from the organizational frame. Organizations have great momentum and are, in most cases, inherently resilient to change. This places a great strain on an innovative employee with an interesting idea because s/he is tasked not only with implementing the idea but also with communicating it to key decision-makers to gain approval.

Key Stakeholders

Intrapreneurs need to know who the key stakeholders are and how to capture their attention. For starters, upper management is often where the decision-making power lies. Having access to upper management, and understanding the strategic motivations behind their decisions, plays an integral role in building top-down support organizationally. Customers are also key stakeholders because their needs are the primary determinant of organizational trajectory. Recognizing what customers want and learning how to give it to them more effectively are integral to successful intrapreneurship.

One useful way to integrate stakeholders and speak the language of upper management is to numerically demonstrate that a new idea is financially and strategically feasible. A net present value (NPV) analysis factors in the total time it will take to initiate a new project, along with costs incurred and value generated over a given timeframe. This enables intrapreneurs a tool to communicate, in today's dollars, how much a given new venture will cost compared with how much it will bring in (i.e., a profit margin).

Being a Change Agent

Change agents know how to get people in an organization involved in solving their own problems. A change agent's main strength is a comprehensive knowledge of human behavior supported by a number of intervention techniques. Understanding not only how to innovate but also how to operate as a catalyst for change is a useful characteristic for aspiring intrapreneurs. Building support is largely a social and behavioral challenge, and change agents understand how to communicate why a proposed change is important and how it is attainable.