I was going through a paper shared by my new colleague Stefan Lindegaard: ‘The people side of innovation‘. One part struck me as the essence of innovation for intrapreneurship:
Definition of Intrapreneurship
Intrapreneurship can be defined as the practice of using entrepreneurial skills without taking on the risks or accountability associated with entrepreneurial activities (starting your own business). Instead, they build new businesses within the existing company while behaving as entrepreneurs; they just have the resources and capabilities of the larger firm to draw upon.
In addition, Intrapreneurs have a very operational role. They need to make things happen and develop new business opportunities that meet the needs of demanding customers. Of course, this also includes Intrapreneurship can be defined as the practice of using entrepreneurial skills without taking on the risks or accountability associated with entrepreneurial activities (starting your own business).
Instead, they build new businesses within the existing company while behaving as entrepreneurs. The People Side of Innovation & coordination with stakeholders from the corporate mothership and other external partners, but intrapreneurs must have a special talent for addressing the needs of paying customers. It is the role of innovation leaders to coach, facilitate, and sponsor intrapreneurs who work within the platform created by the innovation leaders to turn ideas and research into real products and services that move the business forward. Thus, in contrast to innovation leaders, intrapreneurs focus on the operational level instead of on strategy, process, and tactics.
Intrapreneurship in Organization
The bright side of intrapreneurship is within the resources, support, customers, brand, and many other assets that an existing enterprise has. Starting a new business from the ground up is incredibly hard. Entrepreneurs doing that on their own (starting their own business) usually start empty-handed. No money, no brand, no customers, or existing market. No products or services. Usually no support from other people.
There is this big field in front of you, nothing to hold on to, you can go in any direction and you need to figure out everything on your own. Now as an intrapreneur, you’ve got the opposite. You get help in defining the direction. Then, you get cash. You can start by asking existing customers what it is they’d like to get. And as Stefan describes above: you don’t have the risks associated with starting your own business. You may indeed not have the same level of accountability (as an entrepreneur you risk a lot, if you fail, you might lose everything you have).
The dark side is bureaucracy and command and control. As an intrapreneur, you need to report to someone. Whatever the program, there must be accountability towards the shareholders by means of management. An entrepreneur may have accountability towards co-founders or investors. But this type of accountability is different. The biggest challenge in setting up intrapreneurs for success is finding the right balance between control and freedom. Giving intrapreneurs the right accountability and support to succeed.
Read More: How to Start An Innovation Program?
The Eyes of Investors
An investor in a company looks at a startup through the lens of ROI. He looks at metrics and the performance of the team. In general, he won’t look at how the entrepreneur achieves the outcomes they are after. But many innovation projects in large organizations originate from the top. Or they come from the bottom but become pet projects of managers. And when that happens, management starts doing the job of the intrapreneur. They mix in the decisions on what to build, how to talk to customers, how to market, etc.
In my simple view, the only way to make intrapreneurs flourish is to take the lens of the investor: keep the intrapreneurs accountable for achieving the right outcomes (the WHAT), without influencing their actions to reach those outcomes (the HOW).