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Corporate entrepreneurship

In the previous two articles I reviewed the Work-Out process and the Breakthrough strategy as two good structured approaches for building innovation into on-going business activity. In this article, I want to discuss the use of corporate entrepreneurs or “intrapreneurs” as a way of making innovation happen in the organisation.
I am usually an advocate of not getting lost in theory and definitions, but since this is a term that not everybody may be familiar with, I want to start with a few definitions.  According to Wikipedia, it was the American Heritage Dictionary that first acknowledged the popular use of a new word, intrapreneur, to mean: “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”.  Two other definitions that encapsulate this term for me are: “a person who, while remaining within a larger organisation, uses entrepreneurial skills to develop a new product or line of business as a subsidiary of the organisation”; and “an employee of a corporation allowed to exercise some independent entrepreneurial initiative”.

The difference between entrepreneurs and intrapreneurs is that an entrepreneur is someone who, through his or her skills and passion, creates a business and is willing to take full accountability for its success or failure; and an intrapreneur, on the other hand, is someone who utilises his or her skill, passion and innovation to manage or create something useful for someone else’s business.  
Thus, the main disparity between an entrepreneur and an intrapreneur is that an entrepreneur has the freedom to act on his or her whim; whereas, an intrapreneur may need to ask for management’s approval to make certain changes in the organisation’s processes, product design or just about any innovation he or she needs to implement.
Richard Branson refers to the intrapreneur as the entrepreneur’s “little brother” and states that it is a title not nearly the attention it deserves. Branson is adamant about the fact that Virgin could never have grown into the group of more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain.
So, what is the connection I make with innovation?  As per the definitions quoted above, you can see the similarities with innovation regarding ideas, implementation and risk-taking.  The differences, in my opinion, is that with intrapreneurs, the focus is more on the actual individuals who create and realise new opportunities for the organisation, whereas innovation is more about the holistic effort of the organisation, involving all the resources, e.g. managers, shop-floor workers, administration, etc.
Foley lists three things that need to be in place for corporate entrepreneurship to flourish inside of an organisation.
 They are simple, yet complex: Individuals with a core set of action-oriented competencies needed to lead new growth initiatives; The freedom and flexibility to build new systems and processes to support their efforts; The ability to create an environment conducive to entrepreneurship, learning and growth. Research has shown that having the right people, supported by the right processes, in the right place is highly correlated to corporate entrepreneurship and leads to higher levels of innovation, productivity, engagement, and financial results.   However, it doesn’t work unless you have all three of these things in place.

Next Time
The work of intrapreneurs is just another form of innovation within the organisation and it shares many similarities.  So, I advise you to foster the “dreamers who do” and drive growth in the organisation through utilization of their skills, talents and passion.  Next time I will revisit the concept of open innovation. I conclude with a quote from Richard Branson: “Every company needs an entrepreneur to get it under way; healthy growth requires a smattering of intrapreneurs who drive new projects and explore new and unexpected directions for business development”.

Wikipedia. 2013. Intrapreneurship.
Branson, R. 2011. Richard Branson on Intrapreneurs.
Foley, S.  2012. How entrepreneurial is your organisation?


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