These days, almost everybody knows what an entrepreneur is: A person, usually an innovator, “who creates a new business, bearing most of the risks and enjoying most of the rewards.” Many of us have not, however, heard of what Richard Branson has called the “entrepreneur’s little brother“: the intrapreneur.
Like an entrepreneur, an intrapreneur innovates, but she does so within a company, not by starting a new one. Famous examples of intrapreneurship include the Facebook “Like” button, Post-It notes, Gmail, Sony’s PlayStation, and the ubiquitous computer mouse.
According to a report published by Deloitte, supporting intrapreneurship accelerates innovation and pays off for an organization in six main ways:
- It drives development of new products and services
- It breeds talent
- It helps the company gain a competitive advantage
- It motivates employees
- It grows the bottom line
- And it speeds up the development cycle
“Smart companies want you to become an intrapreneur,” writes Dan Schawbel in Forbes, “because it fuels business growth and allows them to gain a competitive advantage in their industry.”
But what’s in it for the intrapreneur? After all, doesn’t it make sense to take that innovative idea and form a new company?
Perhaps, but entrepreneurs have to assume a lot more risks than intrapreneurs. They have to work long hours for little or no pay up front, funding their own work or spending time finding and convincing people to fund it for them. They often don’t have the infrastructure to do things as well as they’d like — they have keep it lean. And if the idea doesn’t ultimately pay off, all their efforts are basically wasted.
An intrapreneur, on the other hand, may be able to do his or her innovation on company time — in some cases, even during normal work hours. They’re still earning a regular paycheck and benefits. The funding for the project is provided by their employer, who can often also provide all the infrastructure they may need. And if the innovative product or service doesn’t work out, in most cases the intrapreneur still has a job. No harm, no foul.
But what about the payoff?
Certainly the potential to have equity in a valuable startup that eventually gets sold is a prime motivator for many entrepreneurs. But intrapreneurs, too, can reap rewards. Depending on the company’s approach to innovation, successful intrapreneurship can lead to career advancement, a raise and/or bonuses, recognition, and in some cases even an equity stake in a spinoff company.
So why don’t we hear more about intrapreneurship?
For one thing, companies need to actively foster intrapreneurship — it’s unlikely to flourish in a company that doesn’t make a concerted effort to cultivate it. Or we may hear about it in the form of companies promoting innovation from within, even if they don’t call it “intrapreneurship.” Ways companies can actively promote and incentivize intrapreneurship include:
- Hackathons
- Giving employees a certain amount of time to work on their own projects on the side (like Google’s much-touted but possibly mythical “20% time”)
- An “idea fair” or other formal opportunities to pitch new ideas to leadership
- A “sandbox fund” where companies provide funding so that employees can “buy” time from other employees to enlist their help in innovative projects
Beyond that, according to this HBR article, “in order to develop, incubate, and scale game-changing innovation, organizations need a company-wide innovation management system.” Which means that, for starters, “innovation must be recognized as a permanent function of a successful company.” Otherwise, writes author Andrew Corbett, the would-be intrapreneur, instead of becoming a celebrated and successful inventor, he or she will end up “more like Steven Sasson, the engineer at Kodak who invented the portable digital camera. As is now well-known, instead of propelling Kodak into the future, the digital camera became a massive missed opportunity.”
Kodak saw the advent of digital cameras as a threat to its business, rather than as the future of its business. As a consequence of that limited vision, Kodak’s business had no future.
So history shows it’s not enough for an employee to have a brilliant, innovative idea. If organizations want to actually benefit from such ideas and promote innovation from within — not to mention prevent creative employees from leaving to found their own startups — they need to take steps now to nurture intrapreneurs and their ideas.
