What You Need to Know About Intrapreneurship and The Benefits for Organisations

We are now living in a disruptive world and it’s no use protesting or denying about it. Companies who cannot survive the disruption are forced to close down. Flip the coin to the other side, companies who can survive and grow out of the situation will thrive and even gain a competitive advantage in their industry. To survive the disruption, companies need to be innovative and to be able to adapt to the current and changing needs of their consumer. Having innovation alone is not enough – Kodak’s downfall isn’t because of they are not innovative and technology is not to be blamed at. In fact, the first prototype of digital camera was invented by an engineer in Kodak.

Spotting something and doing something about it are two different things. One of the differences between start-up and large organisation is that continuous drive and agility. So how does company grow and yet maintain the drive, flexibility and disruptive attitude of start up when they are growing bigger and bigger?

During the start-up stage, there were many ideas and people adapt to the changes rather fast. Investors are more open and supportive to ideas that could potentially turn into a feasible product or services. However, as the company grow, most investor and stakeholders tend to be more conservative and there were also more structures and hierarchy in the company. Managers and employees are more careful with what they do and say during the meetings. Companies get less of “Out-of-the-box” ideas. One way to save this situation is to cultivate the culture of “Intrapreneurship” into your company and inspire more intrapreneurs.

What is intrapreneur? What is the difference between entrepreneur and intrapreneur? 

Let’s start with the term “entrepreneur” that we are more familiar with. Entrepreneurship is the process of designing, launching and running a new business, which is often initially a small business. The people who create these businesses are called entrepreneurs. Entrepreneurship carries risk-taking, perseverance, innovation, and creativity to produce an idea and execute it in the real world. A successful entrepreneur pours out their best effort competing with the wolves in the industry, and they get a pie by either creating a niche of their own or make a better product or services than their industry players. 

An intrapreneur, as the word suggests, means for an employee working within an organisation to behave like an entrepreneur. Social scientist Joseph Schumpeter suggested that intrapreneurs carries quality characteristics of introducing new technologies, increasing efficiency and productivity and generating better products and services.

Table: Differences Between Intrapreneurship and Entrepreneurship (from HR Asia)

For a prime example of intrapreneurship in action, take Google as an example. They practise a “20% initiative” in the company where every employee spends 20% of their time to work on their own project. This initiative promotes creative thinking and cultivates a culture and atmosphere that employees are encouraged to fomenting disruption within Google. What’s better is that it reduces the number of people leaving to start on their own and disrupt from the outside. One of the greatest impacts from this is the creation of “Gmail” where it was first started as a messaging platform. Of course, there are challenges and failure along the way, but that falls right in line with the essence of an entrepreneur. Google has a very clear and compelling message for their employees, that they are not only open to new ideas, they are waiting for them. 

Hence, to answer to some of the thoughts you might have earlier, intrapreneurship doesn’t necessarily increase the turnover rate, it helps companies to retain the talent before they leave.Some of us might be thinking “Why should I pay someone to behave like an entrepreneur in my company? Will they get a hang of it and then leave the company and start their own business?” It’s understandable that some of us might have this thought but this also means we are keeping ourselves in the comfort zone of sticking to the old ways of running the companies where only the boss makes the decision. The employees are not empowered to make their own decision, let alone to be innovative and creative on generating new ideas that can help the company grow. Link this back to the story we had in the beginning, Kodak wasn’t killed by Technology, it’s the lack of innovation and most importantly the employee being empowered to run their own ideas. If that engineer was given an opportunity and resources to work on the prototype of digital camera, Kodak might still be leading the industry now.

In summary, cultivating intrapreneurship in a company is an exciting idea. It helps produce fresh ideas in the organisation and that is significant for the continued renewal and regeneration of the business. This is especially important when businesses are struggling to survive or thinking how to thrive in Industry 4.0 where the disruption is happening from the outside. It might be a better solution that we have the disruption from within the company that can make us stronger. However, we also understand that incorporating entrepreneurial concepts into traditional corporate environments is easy to promote in theory. In reality, intrapreneurship is often much easier to discuss in the paper than to integrate into an actual organisation. There are many factors to take into consideration such as size and corporate inertia. 

We will discuss about how do we incorporate intrapreneurship into an organisation and things to watch out for in our next post. Stay tune.