Corporate Intrapreneur

"A critical success factor is an operational function or competency that a company must possess in order for it to be sustainable and profitable."[1]

Each company has different factors that must be sustained for success. Examples range from sales growth and new customer acquisition rate, to inventory turnover. These factors change and mutate as the company evolves. In order to be sure that executives are receiving the information they need to make the right decisions for future actions, the company must determine which factors are essential at that time. Rapidly growing companies may need to acquire customers in a short time, while mature companies may find that reducing costs are more important to continue to be profitable.

Factors will change throughout the business life cycle; however there are four factors that every organization, big or small, requires for long term success and profitability: innovation, creativity, the desire to implement new and exciting ideas in the organization in an entrepreneurial fashion at the risk of failure and support & recognition from the company and the executives and managers running it. Without these four things, a company will never develop the intrapreneurial spirit. And without that spirit, the company is most likely to not survive to the future.

Introducing the "Intrapreneur"

For decades now the entrepreneur, the "founder of all businesses great and small" has been awarded the lion's share of recognition for amazing innovation and perseverance in spite of the challenges ahead. Eventually all entrepreneurial start ups reach a size or momentum where they become "business". They are no longer considered to be entrepreneurial. In this case, often the entrepreneurial spirit is lost as the organization plods its way into the future. By keeping this spirit alive within the company, and rewarding the free thinkers and innovators appropriately, organizations can develop and dramatically improve their competitive advantage far into the future. The people with entrepreneurial spirit inside a corporation who work for the prosperity of that company and not for themselves are known as "intrapreneurs".

For intrapreneurism to succeed, senior management "must establish an environment that nurtures, rewards and celebrates innovation at every level of the company." They must also back this up by compensating the inventors appropriately.[2] Companies like Thermo Electron know this well and in some cases pay their engineers who develop the new products and services for a spin-off that is run by another CEO even more than the CEO that is brought in to manage the new company (for business reasons it isn't always good to have people who are not prepared for executive responsibilities to run a business, even if they want to).[3]

Norman Macrae wrote a series of interesting articles for the Economist between 1976 and 1982 where he suggested that "dynamic corporations of the future should simultaneously be trying alternative ways of doing things in competition within themselves".[4] This is exactly what has happened with the companies that are flourishing in this competitive global business market. His revolutionary ideas go so far as to suggest that workers not be paid for showing up for work, but actually for producing innovative and creative ideas in the company. How creative is that?! The use of this concept was further developed by Gifford Pinchot who coined the term "intrapreneur" and it finally became a real word when The American Heritage Dictionary added it to their lexicon in 1992. Steve Jobs, founder of Apple Computers claims that the Macintosh was an intrapreneurial adventure within their company. Many more large companies base their success on the concepts of intra-corporate entrepreneurs who continue to be the backbone to their success.

Growth with Innovation

In order to successfully compete in our global market, businesses are going on growing sprees. Many do it through mergers and acquisitions to bypass the long growth curves and investments in organic growth (i.e. develop new products themselves). But at the same time this is not enough because rivals are doing this and spreading across the globe at record speeds. It is a known fact that the larger companies become, the less "entrepreneurial" they are and the more they slow down. In these circumstances, the young start-ups are able to often take a good chunk of the pie and change the way the business is done, very quickly and affordably because they act in an innovative and creative manner.

To prevent this, established corporate middle and heavy weights must continue to innovate, move, and adapt products and services with the nimbleness of entrepreneurial companies. The internet has sped up the game tremendously and the only way large corporations can innovate at Internet speed is to make good use of their people's intrapreneurial energy.[5]

Innovative Solutions to Cultivate Intrapreneurship

Here is a brief list of some of the innovative things that breakaway companies can do to foster the corporate entrepreneurial creative and innovative spirit:[6]

* Staff members are allowed to make their own choice of which internal vendor they wish to use.
* Intrapreneurial employees receive "ownership rights" in the internal intraprises they create.
* Companywide involvement is encouraged by insisting on truth and honesty in marketing and marketplace feedback.
* Intrapreneurial teams are treated as a profit center rather than a cost center.
* Team members are allowed a variety of options in jobs, innovation efforts, alliances, and exchanges.
* Employees are encouraged to develop through training programs.
* Internal enterprises have official standing in the organization.
* Contractual agreements between internal enterprises are defined and supported by the organization.
* A system for settling disputes between internal enterprises and between employees and enterprises is part of the intrapreneurship plan.

Conclusion

The most important factors for long-term success in business are people and their invaluable knowledge bank. We cannot buy or steal it, but we can create an environment where employees feel they are free to use their creativity and innovation to improve the standing of their employer in the market. People and what they know are the most critical factors for success.

References [1] Roberts, Stevenson, Sahlman, Marshall and Hamermesh, 'New Business Ventures & the Entrepreneur, sixth edition', McGraw-Hill Irwin, 2007, p.158.

[2] David M. Brown, 'Many entrepreneurs work for big companies', Brigham Young University, 2004/02/01, Posted on deseretnews.com at http://deseretnews.com/dn/view/0,1249,590039801,00.html

[3] Stephen J. Simurda, 'There's a word for it: Intrapreneurism', 'Worldbusiness magazin, Nov/Dec 1996 Issue (no longer available).

[4] Judith Kautz, 'Small Business Notes - History of Intrapreneurship', Retrieved from: http://www.smallbusinessnotes.com/choosing/intrapreneurship/inthistory.html.

[5] Gifford Pinchot, 'Intrapreneuring: Why You Don't Have to Leave the Corporation to Become an Entrepreneur', Harpercollins; Reprint edition (May 1986) (out of print), Retrieved from: http://www.amazon.com/gp/product/product-description/0060913355/ref=dp_proddesc_0/002-7414076-2126447?ie=UTF8&n=283155&s=books.

[6] Judith Kautz, 'Small Business Notes - The Intrapreneurial Organization', Retrieved from: http://www.smallbusinessnotes.com/choosing/intrapreneurship/intorg.html.

Cameron has lived and worked in Japan for over 18 years. Originally a researcher and educator he has a penchant for details and a natural born flair for communication "soul to soul".

His extensive experience in the culture, coupled with language fluency and a deep understanding of Japanese ethics, morals and thought processes has allowed him to develop a special niche market in the business world.

While working to develop a global presence for a titanium raw material / parts & accessories distributor for the eyeglass manufacturing world for 5 years, Cameron saw the difficulties small/medium sized manufacturers were having themselves trying to expand their businesses outside of Japan. He decided to assist those kinds of businesses get started successfully.

Currently Cameron owns and operates a SOHO business designed to help Japanese and foreign companies come together in business in a very efficient, effective, and cost-effective successful manner.

Reach Cameron @: http://www.intrmarketsolutions.com

Visit his blog @: http://360.yahoo.com/intrmarket

Article Source: http://EzineArticles.com/?expert=Cameron_Switzer

The Art of Intrapreneurship

One of the great ironies of startups is the envy entrepreneurs express for innovators in large companies—let’s use the Gifford Pinchot term: “intrapreneurs.” From the outside looking in, entrepreneurs think intrapreneurs have it made: ample capital, infrastructure (desks, chairs, Internet access, secretaries, lines of credit, etc), salespeople, support people, and an umbrella brand.

Guess again. Intrapreneurs don’t have it better—at best, they simply have it different. Indeed, they probably have it worse because they are fighting against ingrained, inbred, and inept management. There are lots of guys/gals inside established companies who are as innovative and revolutionary as their bootstrapping, soy-sauce-and-rice-subsisting counterparts. This blog is for these brave souls who must practice the art of intrapreneuring.

Kill the cash cows. This is the only acceptable perspective for both intrapreneurs and their upper management. Cash cows are wonderful—but they should be milked and killed, not sustained until—no pun intended—the cows come home. Truly brave companies understand that if they don’t kill their cash cows, two guys/gals in a garage will do it for them. Macintosh killed the Apple II: Do you think Apple would be around today if it tried to “protect” the Apple II cash cow ad infinitum? The true purpose of cash cows is to fund new calves.

Reboot your brain. Just about everything you learn and do inside a large company is wrong for intrapreneuring. For example, in a large company, you survey customers, check with the sales force, build consensus, conduct focus groups, test, test, test, ensure backward compatibility, test, test, test, and then ship. When you ship you utilize advertising because advertising is the what’s always been used. Forget these practices. In fact, don’t worry, be crappy and ship as soon as you can. Generally, you should do everything the opposite from the tried and true existing way of large companies.

Find a separate building. One of the best ways to ensure that the OS that’s loaded into your brain is different after rebooting is to work in a separate building. Ideally, it’s between four hundred forty yards and one mile from the main corporate campus—that is, close enough to steal stuff but far enough so that management is seldom in your face. And this should building should be a piece of crap with crappy furniture. Intrapreneurs need to suffer to build cohesiveness, and you can’t suffer if your butt is sitting in a $700 Herman Miller chair.
Hire infected people. Do you know what the most important characteristic is of an intrapreneurial (and entrepreneurial team too for that matter)? It’s being infected with a love for what the team is doing. It’s not work experience or educational background. I would pick an Apple II repair department engineer over a PhD from MIT if he “gets it,” loves it, and wants to change the world with it. Of course, you understand that you’re reading the blog of a jewelry schlepper who went to work for Apple.

Put the company first. Here is the first dose of reality. Intrapreneurs must put the company, not themselves, first. If you want to put yourself first, then quit, raise capital, and start your own company. But as long as you’re an employee, you have to do what’s right for the company. Admittedly, many people in the company won’t think you are doing what’s right by killing their cow, but they just don’t get it. You are doing what’s right for the company, and that is to kill the cash cow. You can’t have it both ways: the security of existing employment and all the ego-boosting riches of entrepreneurship. At the end of the day, the very bozo that stood in your way may get some of the credit for what you did.

Stay under the radar. Speaking of bozos who got in your way, you need to stay invisible as long as practical. Your initial reaction to an innovative idea may be to seek upper level and peer buy-in (although rebooting your brain should have taken care of this problem.) Not a good idea. Seek forgiveness (if it comes to this), not permission. As soon as you appear on the radar the flak will start flying. Let the vice-presidents come to you. When they appear and start suggesting new product, that’s the time to tell then you’re already working on it. Even better: make them believe it was their idea.

Collect and share data. Trust me, you will get in trouble if you are a good intrapreneur. This is because the higher you go in many organizations, the thinner the air, and the thinner the air, the more difficult it is to support intelligent life. Thus, at some point some bean-counting, status-quo preserving, milk maid is going criticize you for wasting corporate assets on something that no customer is asking for. At that point, you need to already know how much it’s truly cost the organization to get this far. If you have to spend weeks retracing your steps to figure this out, you’ll be in a much weaker position. If there’s anything a bean counter hates, it’s someone who’s already counted the beans.

Dismantle when done. This is the second dose of reality. If your intrapreneurship is successful, then your product and team will move into the mainstream of the company. That insanely great team of pirates must integrate into the system—hopefully they will improve the system and not become the scum of a new bureaucracy—but integrate they must. I laugh about it now, but at one time those of us in the Macintosh Division thought we’d never be more than one hundred people.

Knock yourself out!

Written at Ilikai Hotel, Honolulu, Hawaii