As large firms — both domestic and multinational — seek to maintain and actually increase their competitive advantage, the value of human capital increases; and for human capital that seeks an environment that fosters creativity, autonomy, flexibility and teamwork — minus financial risk-taking — companies that provide opportunities for intrapreneurship will benefit from a win-win proposition.
Just what is an “intrapreneur”? An intrapreneur is an entrepreneur working inside an established company who utilizes entrepreneurial skills to develop projects into a profitable venture for the company. Intrapreneurs take existing businesses and transform them, whereas an entrepreneur stakes an idea and builds around it.
The idea is not new. As far back as 1943, the “Skunk Works” at Lockheed Martin revolutionized aircraft design. In a September 1985 Newsweek article, Steve Jobs was quoted as saying: “The Macintosh team was what is commonly known as intrapreneurship — a group of people going, in essence, back to the garage, but in a large company.” Since then, intrapreneurship has truly blossomed.
Just what are the characteristics and skills necessary for becoming an intrapreneur? In a 2010 study by Ernst & Young, the survey identified five major ones:
• Knowledge of internal and external environments
• Visionary and willing to challenge the status quo
• Diplomatic and able to lead cross-functional teams
• Ability to build a professional-support network
• Ability to persevere, even when uncertain.
Undoubtedly, one of the most exciting things about being an entrepreneur is freedom from the exasperating and stultifying bureaucratic morass of a large corporation. The intrapreneur’s challenge is transcending this impediment and exhibiting the savvy, skill and patience to navigate the corporate environment. Diplomatic skill, the ability to work with individuals of varying backgrounds and experience, and sheer resilience are requirements to succeed.
Intrapreneurs are responsible for keeping companies current. They are the energy behind new ventures that make big businesses stay profitable. Whereas an entrepreneur can often act alone, intrapreneurs in almost all cases require others — colleagues to bounce ideas off, redirect efforts, examine all of the design and financial and marketing aspects of the product or service, and a “godfather” higher up the corporate ladder to champion the project.
To quote business icon Richard Branson: “While it’s true that every company needs an entrepreneur to get it under way, healthy growth requires a smattering of intrapreneurs who drive new projects and explore new and unexpected directions for business development.” He should know. Championing outside-the-box creativity, he supported a young designer, Joe Perry, who wanted to see if he could solve the problem of seat design for Virgin Atlantic’s upper class cabin —a problem none of the big, expensive seat design firms could tackle successfully. Joe solved the problem, leading Branson to exclaim that “CEO” should stand for “chief enabling officer.”
Other successes of intrapreneurship include 3M’s Post-it Notes, Sony PlayStation, Java programming language, digital light processing technology, and ELIXIR guitar strings.
Let’s face it, not everyone with entrepreneurial abilities and skills is willing to cast their fate to the wind, go off the high dive and create an enterprise. Due to family or financial reasons or their own behavioral makeup, they are just not going to pull the trigger.
However, there is an alternative to routine, drone-like, clock-watching employment with a nameless and faceless corporation — working in a modern, employee-centered enterprise that values out-of-the-box thinking and experimentation and invests the time and money in people who have the burning desire to be entrepreneurs but within the safety net of the business enterprise.
It is these companies where intrapreneurship exists and thrives and where firms that foster this climate will continue to exhibit stellar performance.
Jerry Haar is a business professor at Florida International University and a board member of the Miami Finance Forum.