It is widely believed that entrepreneurs have little or no place in Corporate America. Instead, the myth goes, they belong in start-ups or extremely small businesses. However, all organisations—regardless of size or type—would benefit from throwing a little caution to the wind and getting rid of the “because that’s the way we’ve always done it” attitude.
“Entrepreneurship is a mindset. It’s opportunity-driven, not resource constrained,” says John Torrens, assistant professor of entrepreneurial practice at Syracuse University. “The academic definition is ‘the pursuit of opportunities regardless of the resources controlled.’ Any firm can benefit from this mindset among their employees. If a company has a group of employees who can recognise opportunities, evaluate them, and then go after them while assembling the pieces they need as they go, then there is something to be gained.”
In fact, argues David Minter, principal of Minter + Reid, a Denver-based, market research and new product development company, entrepreneurs become more and more useful to the organisation as it grows.
“The larger an organisation gets, the harder it is to grow and drive revenue. The entrepreneur’s mindset is to grow because they either grow, or their entrepreneurial activity dies. This is an entirely different mindset than most folks in larger corporations, for example,” he says. “Many people in larger organisations are drawn to that environment because they have specialised skills, or don’t want to build a new business. Developing and taking new ideas for products and services to the marketplace is the bailiwick of entrepreneurs. It is what they are good at.”
How to Foster Intrapreneurship at Your organisation
There are four elements essential to fostering intrapreneurship— or internal entrepreneurship—within an organisation, also known as “The Four Pillars of Organizational Greatness,” coined by Cyndi Laurin and her co-author in The Rudolph Factor: Finding the Bright Lights That Drive Innovation in Your Business.
- Leadership that allows decisions to be made at the lowest levels. In other words, it requires having a leadership that is secure enough with itself that it can allow employees a voice to share ideas and the ability to implement viable ones.
- Having a culture that is fairly transparent. Deals are not being made behind the scenes. People understand and respect the mission and vision the executive staff has created and are engaged in its success.
- A political structure that closely resembles a democracy. Our country was built upon these tenets; however, most organisations tend to operate as bureaucracies, dictatorships, or oligarchies. Generally, becoming a democratic organisation requires an intentional consciousness — and often times the assistance of outside eyes (consultants specializing in organizational political structures) to turn the ship, so to speak, to a more democratic nature.
- A reward structure that encourages all employees to contribute to the success of the overall organisation. One size does not fit all when it comes to motivational tactics and reward structures.
To foster intrapreneurship, simply follow the principles entrepreneurs live by, says Jennifer Wang, director of marketing at futureTHINK, a New York City-based innovation and foresight firm that specialises in training.
- recognise that innovation is a strategic goal within your organisation. Many times, smart employees are afraid to take the risks that will result in big break-through. These potential intrapreneurs need to be reassured that smart risk-taking is part of your company’s backbone and that they will be rewarded for it.
- Give them some autonomy. Let the intrapreneurs run their business units as if it is their own business. If possible, structure their compensation to reflect that even more than it already does. Giving them the sense of ownership, from both a managerial and compensation point of view, engenders more innovative and entrepreneurial behaviour.
- Make sure intrapreneurs are working on products and services that they are passionate about. This dedication will get them through the long hours, the self-doubt, and the seemingly impossible problems. Intrapreneurs don’t thrive in an environment where they are working purely for someone else to get rich (the board, stockholders, CEO, etc.); they want to believe in what they are doing.
- Instill resourcefulness. When you only have a fixed amount of resources to work with, you’re forced to be creative. Give your intrapreneurs dedicated resources but don’t throw money and staff at them. Forcing them to be frugal and make choices can lead to more creative and resourceful problem solving.
recognising the importance of innovation isn’t enough, says Jeff Weber, author of I.D.E.A. to Exit: An Entrepreneurial Journey. In order to accomplish intrapreneurship, a company needs to create a process for innovation.
“Every company is made up of processes. Startups tend to be described as innovative and entrepreneurial, whereas mature companies are referred to as bureaucratic. All companies do migrate to the bureaucratic, even Apple and Google,” Weber explains. “The difference with companies like Apple and Google is that, as they grow and become more bureaucratic, they also incorporate a process for innovation and entrepreneurial thinking. Many companies fail to recognise that they need to develop procedures for innovation, just as they have for every other process in their company.”
Case Studies: Miller Brewing Company & CJP Communications
Think intrapreneurship can only work at technology companies or in tech-related roles? Think again, says Torrens.
“My favourite example of corporate entrepreneurship is the Miller Brewing Company in the mid-1970s. Beer sales were stagnant–or flat, if you will–and the market was very fragmented with Miller in seventh place and four per cent of the market. Some intrapraneurial people in the product development and marketing departments saw an opportunity and went after it,” he explains. “Specifically, they saw the trends of maturing baby boomers who were athletes not so long ago and now relegated to watching sports on the weekend. Lite beer represented less than one per cent of the market in 1975. But by figuring out a way to make drinking lite beer attractive to their target demographic, they were able to change an entire industry. After the introduction in Miller Lite, lite beers accounted for 94 per cent of all beer sales in the U.S. by 1994!”
Another example is CJP Communications, a mid-sized, independent communications consultancy headquartered in New York City.
“At CJP Communications, we are an ‘Army of Entrepreneurs,'” says Jennifer Prosek, founder and CEO of CJP Communications and author of Army of Entrepreneurs: Create an Engaged and Empowered Workforce for Exceptional Business Growth. “That means that everyone is trained and encouraged to be entrepreneurial at work; we are a firm of ‘intrapreneurs’.”
Prosek credits the Army model not just with growing the firm but literally saving it during the Great Recession. “Our Army of Entrepreneurs found new clients, developed new revenue sources, and expanded existing accounts. While 65 per cent of public relations agencies nationwide reported revenue declines, CJP Communications grew.”
CJP Communications fosters intrapreneurs using the following strategies, as explained by Prosek:
- Establish and nurture an entrepreneurial culture. Culture isn’t optional. To truly build an Army of Entrepreneurs, we try to maintain the right practices and outlook. The four elements of a core culture include authenticity, commitment to people, commitment to the business and continuous effort.
- Create a “nudge.” A “nudge,” according to behavioural economist Richard Thaler of the University of Chicago, is a harmless bit of engineering that manages to attract people’s attention and alter their behaviour in a positive way, without actually requiring anyone to do anything at all.
- Teach employees the business. While many businesses are focused on teaching employees the skills they need to do their jobs, an Army approach is focused on “teaching the business” — how it makes money, where clients come from, why they stay or go and other big-picture issues.
- Maintain momentum. Building and maintaining an Army of Entrepreneurs and the culture that sustains it takes ongoing effort, initiative, and originality. It’s critical to maintain momentum; inertia is the enemy. There are three key components to keeping the energy alive — compensation, morale, and communication.
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