Tuesday, December 12, 2006

Intrepreneurship 101

- The History of Intrapreneurship

In an article in The Economist in 1976, Norman Macrae predicted a number of trends in business - one of them being "that dynamic corporations of the future should simultaneously be trying alternative ways of doing things in competition within themselves". In 1982, he revisited those thoughts in another Economist article, noting that the this trend had resulted in confederations of intrapreneurs. He suggested that firms should not be paying people for attendance, but should be paying competing groups for modules of work done. One suggestion was to set up a number of typing pools contracted for a certain amount of work over a certain time period for a lump sum. The members of the pool would be responsible for apportioning work, setting pay, setting work hours or even whether to subcontract out part of the work. Applied across the business spectrum such groups would provide the intrapreneurial competition he envisioned.

During the same time frame, Gifford and Elizabeth Pinchot were developing their concept of intra-corporate entrepreneur. They coined the word intrapreneur giving credit for their thinking to the 1976 article by Macrae. Under their model a person wishing to develop an intrapreneurial project would initially have to risk something of value to themself - a portion of their salary, for instance. The intrapreneur could then sell the completed project for both cash bonuses and intra-capital which could be used to develop future projects. Based on the success of some of the early trials of their methods in Sweden they began a school for intrapreneurs and in 1985 they published their first book,Intrapreneuring, combining the findings from their research and practical applications . (Note: A revised edition of that book, Intrapreneuring in Action is now available.)

By 1986 John Naisbett was citing intrapreneurship as a way for established businesses to find new markets and new products in his our-of-print book, " Re-Inventing the Corporation" and Steve Jobs was describing the development of the Macintosh computer as an intrapreneurial venture within Apple. The concept was established enough that in 1990 Rosabeth Moss Kanter of Harvard Business School discussed in her book, " When Giants Learn to Dance", the need for intrapreneurial development as a key factor in ensuring the survival of the company.
And, in 1992, The American Heritage Dictionary brought intrapreneurism into the main stream by adding intrapreneur to its dictionary, defining it as "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". Intrapreneurship was a concept here to stay.

- Human Resources Issues in Intrapreneurship

What has intrapreneurship meant in the reality of the business environment? The area of greatest impact has been, of course, in human resources. Intrapreneurship has not just become a method for revitalizing business processes, but of also revitalizing jobs.
In GTE's Information Systems Division that has paid off for the company and its employees too. This program was actually developed by a former GTE employee, Anthony Spadafore, who left GTE to form his own consultancy program, Pathfinders, which works towards developing self-directed employees. Spadafore spent extensive counselling the volunteer employees in this new way of thinking and working. From the initial group eight new projects were proposed and a number of them funded. A number of employees have defined totally new career paths for themselves. This program has totally redefined how GTE does business.
3M is another company that has reaped the rewards of intrapreneurism. 3M has a standard policy that allows all employees to work on developing their own business ideas at least 15 percent of the time they are at work. One of the big breakthroughs that came from this program was the concept of Post-It-Notes which was pioneered by an employees that wanted something that wouldn't fall out to mark pages in his hymn book at church.
One of the most exciting concepts in intrapreneurism is developing intrapreneurial competing teams within a company. The organization can be organized around teams that function as small businesses nested and networked together. These teams can be focused on a product such as a new car, a process, such as public relation or a service, such as the secretarial services of the organization. What evolves is a free market system with work coordinated more effectively and responsibility distributed more widely.

- The Intrapreneurial Organization

Intrapreneurs have been credited with increasing the speed and cost-effectiveness of technology transfer from research and development to the marketplace. While intrapreneurs are sometimes considered inventors, inventors come up with new products. Intrapreneurs come up with new processes that get that product to market. Part of the reason they are considered similar to inventors is that they are creative and are risk-takers in the sense that they are stepping out of their traditional role within the business. However, their risk-taking behavior is personal. In terms of the business, they actually work towards minimizing the risk through the innovative approaches they use to more efficient and effective product production and sales.
Some methods that have been used by businesses to foster intrapreneurship are:

ยท Users of internal services are allowed to make their own choice of which internal vendor they wish to use.
Intrapreneurial employees are granted something akin to 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(i.e, they are responsible for their own bottom line). One way some companies handle this is for the team to have their own internal bank account.
Team members are allowed a variety of options in jobs, in innovation efforts, alliances, and exchanges.
Employees are encouraged to develop through training programs.
Internal enterprises have official standing in the organization.
A system of contractual agreements between internal enterprises is 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.
Intrapreneurism in business has evolved to encompass a variety of concepts: identifying and fostering employees who have what a considered to be intrapreneurial traits, developing an intrapreneurial process for part or all of a business, and developing innovation through rewarding intrapreneurial behavior.

- The Intrapreneur

For the intrapreneurial employee, advice abounds. They are advised to be courageous, moderate risk takers, frugal, flexible, and creative about their pathway. Their task is to put together a team of enthusiastic volunteers, build a network of sponsors, and ask for advice before asking for resources.
Gifford Pinchot's out-of print book " Intrapreneuring, Why You Don't Have to Leave the Corporation to Become an Entrepreneur" provides 10 commandments for intrapreneurs:

  • Do any job needed to make your project work regardless of your job description.
  • Share credit wisely.
  • Remember, it is easier to ask for forgiveness than permission.
  • Come to work each day willing to be fired.
  • Ask for advice before asking for resources.
  • Follow your intuition about people; build a team of the best.
  • Build a quiet coalition for your idea; early publicity triggers the corporate immune system.
  • Never bet on a race unless you are running in it.
  • Be true to your goals, but realistic about ways to achieve them.
  • Honor your sponsors.

Online forums that encourage new thinking have evolved with Fast Company and The Intrapreneuring Cafe being among the favorites. Fast Company has the goal of chronicling the changes under way in how companies create and compete, highlighting the new practices shaping how work gets done, showcasing teams who are inventing the future and reinventing business, and equipping the people exploring this uncharted territory with the tools, techniques, models, and mind-sets they need. The Intrapreneuring Cafe, run by intrapreneur.com discusses a variety of specific intrapreneurship issues such as what the best businesses are for intrapreneurship and government agency intrapreneuring. They also run want ads for intrapreneurs.

Another direction intrapreneurship is growing is in developing scenarios to anticipate future trends and responses. Scenarios are stories about possible futures which enable organizations to learn, adapt and develop better strategies. Scenario planning begins by identifying the focal issue or decision. There are an infinite number of stories that could be told about the future; the purpose is to tell those that matter, that lead to better decisions. While scenarios to-date have primarily been used for large scale planning efforts for such projects as education in the United States, it is very applicable to the business environment today.


At 7:21 PM , Blogger Oritsega said...

Now here I was thinking I was an intrapreneur and not knowing this much anout it, ll

At 6:18 PM , Blogger Katie said...

Thank you for your very informational and insightful post. I have a link to a free article about scenario planning:


At 11:49 PM , Blogger Ron Davison said...

This is really a great recap of intrepreneurship. I very much enjoyed it. Thanks!


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