What is an Intrapreneurship?
Intrapreneurship is a system and a process that allows its employees to develop their
entrepreneurial skill & mindset and act like an entrepreneur by working within the company.
Intrapreneurship is very close to entrepreneurship where people can learn and polish their skills
by working within the company, and then they can start their own business later. Intrapreneurs
are usually proactive and self-motivated individuals who have the skill and the mindset to
become the leader.
Intrapreneurship Definition
According to Skinner SJ & Ivancevich JM, Intrapreneurship is defined as
“An entrepreneurial person employed by a corporation and encouraged to be innovative and
creative”
“a person with entrepreneurial characteristics who is employed within a large corporation.”
“are usually found in enterprises that encourage experimentation, tolerate failure, recognize
success and share the wealth”.
Intrapreneurship Vs Entrepreneurship
Intrapreneurs is an individual who works within the company or an organization and act as a
leader of one’s startup business. Intrapreneurs usually have his team or group of people
working for him of his product or service which may be different from the company’s main
line of business.
Entrepreneur, on the other hand, is a person who doesn’t work for anyone and runs one’s own
business or company. For good or bad, he has complete autonomy and responsibility of his
company.
One of the main differences between Intrapreneurs and entrepreneurs is that entrepreneur just
focuses on his own business only. Intrapreneur keeps his focus on the entire image and
productivity of the company.
Compared to entrepreneurship; Intrapreneurship is less autonomous and less risky. Here are
some of the key Characteristics of Intrapreneurship which makes attracts Intrapreneurs;
Capital
An Intrapreneur doesn’t have to worry about the capital that how he’d be able to raise capital
for the development of his research. He just has to focus on his innovative idea and keep
working on it, the company will take care of the rest.
Many young entrepreneurs fail at the beginning of their startup is because they are unable to
raise sufficient capital to fund their research and creative work.
Resources
Whether it’s the office, building, technology, manpower, or any other resources; which
research requires to develop something new that’s likely to be the next big thing, all of these
resources are available to the Intrapreneurs if the idea of the product is viable and sustainable
in the long term.
Entrepreneurs, on the other hand, don’t have the luxury of all the resources, if the research is
limited, then they can manage. If the idea is big, then it’d require a lot of financial funding and
resources to execute their plan.
Dependency
By dependency I mean autonomy or freedom; Intrapreneurs usually have less dependency than
the entrepreneurs because the company is funding all the research and experiments and
providing all the resources. They also want some results in return; therefore, the funding and
all the resources have a price of delivering results.
This makes Intrapreneurs more productive, but they’re working on a tight deadline to produce
some outcomes. Entrepreneurs are their boss with fewer resources, but they have a complete
autonomy.
Risk
The risk factor is almost none in Intrapreneurship because Intrapreneurs use all the company’s
resources to experiment with new approaches to make their product work. Innovative ideas and
creative approaches often lead to something productive.
Entrepreneurs don’t have the luxury of experimenting with new approaches over and over again
because of fewer resources and funding. If the idea works, then it’ll pay off everything. If it
doesn’t, then it’d lead the entrepreneur to bankruptcy.
Reward
Intrapreneurs have to share with the reward with their team members and the company as well.
Win, win situation for everyone. It doesn’t mean a lower portion of the reward if the idea is big
and becomes successful; then the chunk of the reward is also big even after sharing.
Decision
Having said earlier, Intrapreneurs work in a team and within the company. Therefore,
intrapreneurial decisions are also based on the votes and the majority. If the idea is viable and
sustainable in the long term, then it’ll be voted yes. Otherwise, it won’t.
Entrepreneurs have the autonomy of making independent decisions on their own.
Benefits of Intrapreneurship for Businesses
Intrapreneurship is necessary for large organizations to keep the growth and productivity intact.
Some of the advantages of Intrapreneurship for businesses are as follows;
Increase productivity
Intrapreneur is the person with leadership skill and he’s working on the tight deadline to deliver
results. He will keep his team motivated so that they remain excited to meet their targets. In
the process of doing it, the productivity of the company keeps on increasing.
Problem Solver
Intrapreneurs are usually assigned to certain tasks of the company to improve different
processes. If the output of the company has slowed down, then they investigate the cause of
the problem and find creative ways to solve the issue in hand. If they see the gap in
performance, then they will evaluate different functions of the company to minimize the gap
or to finish it.
Innovator
Intrapreneurs adopt creative and innovative ways to keep things changing in the company.
Keep imagining and visualizing different scenarios innovative ways to increase the growth
level of the company.
Love to take Risk
Intrapreneurs are risk-takers and they are not afraid to fail. Lack of fear has a different level of
confidence because people usually make mistakes when they are under pressure. They take
calculated risks and their chances of failure are very low; because they know that the failure
would also teach a unique lesson of what to avoid in the future under what circumstances.
Example of Intrapreneurship
Here are some big companies which have adopted Intrapreneurship to keep the entrepreneurial
talent intact, not to leave the company.
SONY
Sony has been producing many products; PlayStation game is one of them. However, this game
was developed by one of its junior-level employee, Ken Kutaragi.
When Nintendo broke up his partnership with Sony; and made alliance with Philip. Sony
appointed Ken Kutaragi to look after the projects of Nintendo what he was working on. Ken,
however, saw the opportunity in the ‘PlayStation’ gaming project and kept working on it and
finally, launched the video on December 03, 1994.
Facebook
Facebook conducts an annual one-night competition by the name ‘‘hack-a-thone’’ where
programmers and coders work on an idea to produce something new. In started 2007 when they
developed a prototype Facebook ‘‘like’’ button and it’s been going on ever since.
Intel
Silicon Valley Entrepreneur for ‘‘new business initiative’’ is the intrapreneurial initiative
launched by Intel in 1998, where employees are invited to pitch their ideas if their ideas are
viable, then they receive funding and resources. Ever since it was launched, more than 400
hundred Intel’s employees have pitched their business ideas so far. More than two dozen
employees have received funding for their projects.
Pros and cons of intrapreneurship
Before deciding which path to take, examine the benefits and drawbacks of intrapreneurship.
As an intrapreneur, you will not own your idea — your company will. You may not be chosen
to turn that idea into a product. Furthermore, you may not even get credit for the idea. As the
saying goes, "success has many parents." And just as your financial downside is limited, so is
your financial upside.
On the other hand, intrapreneurship has many compelling benefits: You will not need to spend
excessive time procuring funding, setting up legal entities or deciding which health plans to
offer for employees you haven't even hired yet. Instead, you will benefit from a brand, a client
list and access to colleagues who will return your calls and offer help. You'll continue to get a
cash salary that's significantly above what typical startups provide, as will your team. And if
you have a family, you won't have to take them on a daily rollercoaster ride.
Factors to consider
It takes a while to decide whether, at heart, you are an intrapreneur or an entrepreneur. But
that's only part of the question: You must decide which path your idea fits best.
For me, the choice was relatively straightforward. When I was the CEO of Fox International
Channels, I wanted to pursue a project centered on creating podcasts that replicated the
emotional experience of leading character-driven TV shows. Fox actively encouraged
intrapreneurship, but the podcast industry in 2015 was tiny and not of interest to Fox. This
meant if I wanted to start what became Wondery, I would have to do it on my own. However,
if your idea could feasibly be launched within your current company, the question, "Should I
stay or should I go?" becomes harder to answer. Consider these four questions:
Does your company encourage internal innovation? Virtually all companies pay lip service to
innovation, but some wholeheartedly encourage it. How many projects have been launched
internally within your company?
How does the company treat projects that fail? In other words, if your idea flops, are you likely
to see your career derailed?
How long will it take? Are you and your boss likely to still be at your company when the idea
gains demonstrable traction and delivers results?
Have you already used any company assets? Even if you only wrote a business plan draft on
the company laptop while on vacation, you must bring the idea to your employer. Venture
capitalists would not fund a company if it was created using company resources.
Intrapreneurial issues
If, after answering the above questions, you are gravitating toward intrapreneurship, there are
other factors to consider before chatting with your boss.
Why you? Why should you be the one to champion this project? Are you a manager with a
team ready to turn your idea into a product? Or do you think your project could allow you to
step into a position of P&L responsibility?
Do you have the necessary internal support? Will your project receive the right tangible
resources, or will you fight for them daily?
Are you infatuated? If you've fallen in love with your idea, it's essential to seek disconfirming
views to assess its true worthiness. Be careful, especially if you have many yes-people around
you.