Name
Introduction to Global Social and Ecopreneuring and Innovation
Assignment #
Global Terminology Description
An Overview of Intrapreneurship
X/X/2022
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Definition
Intrapreneurship or intra-corporate entrepreneurship is the process of innovating and
creating new business opportunities within an already established company. Innovation can be
more than just another product perhaps some incremental improvement, a better customer
experience or a cost saving measure. For example, Amazon’s one click checkout is a product of
intrapreneurship invented by Peri Hartman. This simple addition improved customer experience
as it removed any friction for making purchases and Amazon filed the 1-Click patent to further
profit from its ingenuity.
Entrepreneurship Versus Intrapreneurship
During the initial stages of my research over intrapreneurship I was confusing the term
with the idea of entrepreneurship and when I was chatting with my friends regarding
intrapreneurship, they too confused the concept with entrepreneurship. Now I know
intrapreneurship and entrepreneurship differ considerably. As an entrepreneur one is exploring a
new idea or process to launch a company of their own while an intrapreneur works to further the
success of an existing one. There is also a different level of risk involved for the individual
practicing entrepreneurship. In part because an entrepreneur takes on far more responsibility and
experiences any loss suffered directly. With intrapreneurship loss is felt by the company not just
the individuals intrapreneuring, however, there is still the risk that an intrapreneur could be fired
if they are unsuccessful or exhibited poor performance. Further comparison would be the case of
a successful launch, intrapreneurs are further down the line for compensation while
entrepreneurs get to decide the terms of their payment. In my eyes intrapreneuring is a great way
for an individual to gain experience that they could apply later in life as an entrepreneur. I
believe everyone should aspire to be an entrepreneur as it could provide a means of financial
independence, freedom, and legacy.
History
Intrapreneurship can be traced back to the late 1970s which is around the time the word
began showing up in academic journals. Gifford Pinchot is credited with coining the word and
has written multiple books over the topic. He was crucial for the intrapreneuring movement as he
explained how through an intrapreneurial spirit both the company and employee flourish.
However, companies like 3M were practicing intrapreneurship decades before the term was ever
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coined. This was through their 15 percent rule where employees were allowed to spend 15
percent of their work week on their own inventions. This policy led to the invention of the Postit-note which is one of 3M’s most famous products. The Post-it-note came to mind when Art Fry
became frustrated with his bookmark falling out of his hymnal during choir practice. At that
moment he remembered Spencer Silver’s unique adhesive he demonstrated years ago in a
company event. Though Silver’s idea was not initially successful his demonstrations stuck in the
minds of his colleagues and led to the creation of an item found in every office.
Present
Today intrapreneurship has become a cultural staple in many companies. To name a few,
Google, Meta (Facebook), and Sony all value the importance of intrapreneur teams and
designated time for employees to pursue their own ideas and inventions. Google’s creation of its
famous Gmail is attributed to the 20 percent time policy. Sony’s PlayStation originated from a
side project one of their employees was working on and Facebook’s current interface is thanks to
the company’s hackathons. Intrapreneurship is not something that every company supports and
there can be significant discord between intrapreneurs and management. For example, Ken
Kutaragi, a Japanese engineer at Sony, faced significant criticism for his time spent on the side
project that led to the creation of the PlayStation. At that time most of Sony saw no future in
gaming, except for the CEO who shared Kutaragi’s vision and allowed him to pursue it. Last
year Sony’s Games and Network Services made up their largest revenue segment. Also, with the
announcement of Sony’s acquisition of videogame developer, Bungie, it is apparent that Sony
continues to recognize the value gaming presents. It would be difficult to imagine where Sony
would be had Ken Kutaragi been asked to stop his work on the PlayStation. Sony’s support for
intrapreneurship has allowed them to create a new growth engine and shift their company vision
to match the desires of consumers. Although Ken Kutaragi and Sony’s story ended in success, I
wonder how many countless ideas have been shot down too soon before the value of their
proposal was ever noticed.
Purpose
The Information Age has led to some of the most competitive times for businesses in
history and lack of innovation will only lead to a company’s demise. Adopting entrepreneurial
thinking into company culture will better prepare a company to remain responsive and adaptive
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in ever changing markets. Larger enterprises may be at more of a risk of rejecting intrapreneurial
processes as with their increased size and experience there is a shift towards more risk averse
practices. Amazon’s Jeff Bezos acknowledges this common downfall and has built the company
on a culture tolerant and even welcoming to failure. Bezos has said “failure and invention are
inseparable twins” and every single employee is encouraged to experiment and pursue potential
successes. As the size of Amazon increases, the risks it must take for true innovation grow
proportionally. This is a fact that every large company needs to accept if they plan to be relevant
in the future. The “we know best” attitude will become their undoing.
Implementation
As mentioned above, companies must encourage an entrepreneurial mindset within their
employees for intrapreneurship and innovation to take place. A clear vision of what the company
hopes to achieve must be established and then support and encouragement from managers is
essential. The organization’s structure may need to be altered to allow for a more decentralized
level of authority, allowing employees free rein with their ideas. When intrapreneurs have less
workplace restrictions productivity and efficiency is certain to improve. Depending on the size of
the business a complete restructure may not be feasible so, the formation of teams or departments
dedicated to innovation would be best. Another important note is that a team should be formed
around the people, not the idea. Rather than betting on a specific a plan that could change
without notice it is better to put faith and trust within a group of people who have the passion and
drive to make any idea a success. The Fleischmann company is an excellent example of how to
implement intrapreneurship when profits become stagnant. At one point their business was based
around only three brands and there was no more room left for growth. A team of intrapreneurs
was established with an intention of offering healthy supermarket food options. Many ideas
emerged and management gave lots of support. Fleischmann management reduced the authority
and restrictions over the team and within a year's time four new highly successful products were
launched. The Bosch Group has an even more developed innovation process that it established in
2015 when the CEO, Volkmar Denner saw a need to pivot and explore new business
opportunities to keep scaling the company. Their process is called the “Business Model
Innovation Department” and it is an entire “ecosystem” dedicated to the validation of new ideas.
Within the Business Model Innovation Department, the Accelerator Program was created which
consists of two phases where 20 to 25 teams work together over the span of two to ten months to
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test the scalability of a new idea or an already existing concept. After the completion of the
Accelerator Program teams with the best likelihood for success move forward to the incubation
phase. Since 2017 over 200 teams have been formed and 70% of them retired their projects
within the first phase and then 75% of the remaining teams abandoned their idea after phase two.
This gives great insight to the success/failure ratio of new business opportunities as innovation
never transpires as planned. These failures are necessary for finding the one winning proposition
that keeps the company scaling and relevant for years down the line.
How to Be a Successful Intrapreneur
Innovation takes place when a team of intrapreneurs are all dedicated to the same cause
each bringing their various backgrounds to the table in hopes of a successful venture. The
question that arises is what qualities are present among the successful intrapreneurs? Gifford
Pinchot believes there are certain characteristics one can embrace to improve the success of an
idea or “intraprise”. He stated that it starts with daydreaming to the extent that it becomes an
obsession. When thinking becomes this deep an intrapreneur can start to see obstacles in the
forecast and even methods of pivoting to continue progress. A sign that an idea may not align
with the views of oneself is if deep thinking feels forced and a more conscious effort. To turn
any vision into a reality it is essential each intrapreneur takes on the responsibility of doing
whatever it takes to keep the idea advancing. This may mean performing tasks outside one’s
background and if it is something that a person lacking the knowledge cannot perform then it
means finding someone who can get it done and getting them to do it. Another important detail is
that one must have the courage to bend the rules a smidge, but they must also remember to keep
the best interests of the company and its customers in mind. Throughout this whole process the
most difficult aspect will be finding and maintaining the correct balance and remaining focused
on the end objective. Each intrapreneur must be dedicated, courageous, and act with discretion if
they are going to launch a successful idea because no matter how detailed a plan there are always
the unknown unknowns that require quick thinking to avoid failure.
Conclusion
Companies will either innovate or fail and to drive innovation it requires teams of
intrapreneurs dedicated to the success and mission of their company. Intrapreneurship will
naturally arise it’s up to management to foster and support their passionate employees.
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References
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