intrapreneurs - the unsung heroes of large companies

A DETAILED INTRODUCTION TO THE TOPIC OF INTRAPRENEURSHIPAND THE FACTORS IMPORTANT FOR SUCCESSFUL IMPLEMENTATION

By Daniel hofmann

INTRAPRENEURSTHE UNSUNG HEROES OF LARGE COMPANIES

REALIZE YOUR COMPANY’S

FULL POTENTIAL

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AN IMPORTANT ASPECT OF CONSULTING is to understand the political structures and fabric of

your customers, and to identify the key players within the

project and the company. The best projects far too often

fail because of power struggles in upper management.

This makes it all the more important to identify “accom-

plices” in the form of well networked idea drivers early

on and get them on board. These persons are of primary

importance, especially for internal marketing, because

they have already earned the trust of their colleagues and

in the best case management as well. Their motivation

and the will to change and improve things can be equated

with entrepreneurship, with the difference that they are

full-time employees. This led to the terms intrapreneur

and intrapreneurship.

NOTHING NEWThe entrepreneur in large enterprises is not a new phe-

nomenon. Intrapreneurs have already brought numerous

innovations to market, such as the PostIt from 3M and the

Sony PlayStation. However, the names of the inventors

remained concealed behind the company names. These

unsung heroes are getting more and more important, es-

pecially in the digital transformation age, since they drive

digitalization in companies.

If the intrapreneurs fail then so will the company.

INNOVATION CONSULTINGAs innovation and strategy consultants, we also consider

it our responsibility to promote intrapreneurship in com-

panies and attract attention to the work of intrapreneurs

within companies and in the public eye.

In the following we are first going to examine the defini-

tion and origins of intrapreneurship, and then discuss the

fundamental elements for introducing and promoting

intrapreneurship within companies.

3tel. +49 89 416 177 00 l email: [email protected]

THE CHALLENGES FACED BY COMPANIEShave changed significantly in the last 20-30 years. Speed and

innovativeness were added to values such as efficiency and struc-

ture. Innovative solutions are in demand in order to develop new

market potential, notwithstanding saturated markets.

Today people take centre stage in this development as human

capital instead of merely a cost factor.

Menschen sind flexibel und erzeugen aus People are flexible and

generate valuable information from knowledge. Knowledge work

therefore found its place in the world of business. It was apparent

early on however that knowledge work is difficult to measure or

compare, and that large gaps can form when employees leave the

company.

This is where intrapreneurship comes. It provides approaches for dealing with this newly developed situation and describe the be-haviors of employees that exhibit entrepreneurial thinking. They act independently and take responsibility for implementing inno-vative ideas in their company. They take risks, act as idea drivers and motivators and normally participate in the possible profits. But they always remain part of the company framework.

INTRAPRENEURSHIP, ORIGIN AND DEFINITION

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IN DETAIL„INTRAPRENEURSHIP IS BOTH A SCIENCE AND AN ART.“

(2011, K. Desouza)

Science based on the underlying processes, art based on the ac-

companying ones Creativity and unpredictability. No company is like

another, which is why each needs its own strategy to introduce and

promote intrapreneurship.

This is not a single tool but rather an attitude and school of thought.

IDEA FINDING

ABILITIES OF THE EMPLOYEES

RESPONSIBILITY, THAT HAS TO BE TAKEN BY THE EMPLOYEES

AVAILABLE CAPITAL

PROCESS TO TURN IDEAS INTO REALITYj

BASIC ELEMENTS


Even a small idea can develop into a lucrative business. This is why

companies should capture the definition of an idea clearly and, in

particular, communicate it internally. Failing to do so means that

valuable thoughts of the employees may be lost because they

fail to pursue many flashes of inspiration or because these are

rejected by others as uninteresting.

LIFECYCLE OF AN IDEAAn idea is usually condemned to fail from the outset. When an em-

ployee comes up with an idea, the superior either reviews it based

on some predefined indicators or makes a subjective evaluation.

Then the superior may take the idea to the department manager,

who in turn goes to the division manager and so on, until the idea

in the best case scenario reaches the executive board at some

point. The topic is exposed to subjective opinions and criticism

again at every stage. If the idea appears too unusual, let alone to

risky, the person in question will be hesitant to endorse or even

actively support it. The fear of being made a scapegoat in case of

failure is enough to let the idea die through premature and insuf-

ficiently considered rejection.

MARKET FORCES The concept of intrapreneurship introduces market forces in-

stead of the multi-level hierarchical decision making process just

discussed. Here the goal is to develop a situation similar to the

market inside a company so that potential is promoted, new ideas

are supported and budgets approved for intrapreneurs.

Since innovations always have some-

thing to do with risk as well, companies

should offer an incentive system for their

employees that encourages them to take

certain risks and not only develop ideas

but to also promote and support them.

The system may include monetary but also

non-monetary incentives. Idea contests

or internal exhibitions can make potential

ideas accessible for all employees.

A person inspired by an idea can support

it as an idea sponsor and is backed by

the employer in doing so. This sort of job

enrichment helps staff develop a greater

enjoyment of their work and their personal

sense of purpose is enhanced. Usually

the employees of a company are capable

of more than just their everyday work.

Discovering and promoting these abilities

is another aspect of intrapreneurship.

INTRAPRENEURSHIP AS A SOURCE OF INNOVATION IDEAS AS VALUABLE COMPANIONS

INCENTIVESQUID PRO QUO

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INTRAPRENEURSHIP AS A SOURCE OF INNOVATION

POSSIBLEAPPROACHES

FOR THE IDEATION PROCESS

CREATIVE WORKSHOPSNo matter what methods are applied for the workshops, the key success factor is an

experienced moderator who is able to establish a friendly and also creative and

productive atmosphere.

w

CUSTOMER AND MARKET ANALYSES FROM NEW PERSPECTIVESAn independent view of the market and the company makes it possible to establish

analogies with other industries and therefore realize entirely new possibilities.

CO-CREATION There are numerous possibilities for introducing co-creation in companies, for example

though the development of a platform for employees or by networking with potential

partners for the further development of an idea.

INTRODUCTION OF AN INNOVATION FUNNELA successfully implemented innovation funnel makes it possible to filter out the ideas

with the greatest potential from a multitude and prioritize these based on the

company strategy.


INTRAPRENEURSHIP IN THE ORGANISATION EMPLOYEES AND ABILITIES

Companies and especially large enterprises forget over time how

they managed to get big: through innovation, drive and the readi-

ness to assume risk.

TALENT SEARCH A lot of time and money is invested in searching for talent at high-

er levels. The goal is to retain talented individuals over the long

term, realizing their full potential in order to drive the company

and obtain a competitive advantage. Yet these initially enthusiastic

new employees also have to follow old processes and approaches

shortly after they are hired. Their ideas and suggestions are often

seen as disruptive. It quickly becomes clear to them that climbing

the career ladder is more a question of time rather

than performance.

With the digital generation in particular, young people coming into

companies are accustomed to working on their tasks with the help

of the internet, for example through forums, knowledge portals

etc. This open communication approach is not compatible with

the previously accepted rigid and strictly hierarchical structures.

To keep the best of this generation in a company, one has to pro-

vide them with suitable platforms for their work and offer them

conditions similar to the market. Fixed career paths are no longer

mapped out either. Those who perform well should also be able

to advance quickly.

Employees should not be treated as property but supported and

developed, otherwise they will not remain loyal to the department

or company for long. This can be promoted even with simple

means such as granting more freedom in the workplace.

GOOGLE employees invest 70% of time in their job as such,

20% in ideas that have something to do with their field of

work and 10% in totally different ideas.

By officially making 30% available for the development of

ideas, the employees are actively encouraged to actually

utilize this time without having to expect consequences.

30%OF WORKING TIME

For years already, 3M has been giving its employees 15% of

their time for the development of ideas that have nothing to

do with their work, but could be beneficial to the company.

This encourages the employees to look beyond their own

field of work.

15%OF WORKING TIME

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INTRAPRENEURSHIP IN THE ORGANISATION

FOCUS NOT JUST ON R&DCompanies should avoid the mistake

of limiting themselves just to their R&D

department. R&D usually focuses on “big

ideas” and what are called mega-trends.

However, these will only become impor-

tant in five to ten years as a rule. Momen-

tum is essential, especially in digitalized

markets. Given the pace and changeability

of modern markets, companies who do

not manage to be successful today and

develop innovative solutions will find it

difficult to gain benefits from their R&D

department and its ideas in five years.

INVOLVING ALL EMPLOYEESAll employees should be involved in com-

ing up with ideas. Especially those who

work with various products and processes

every day (e.g. human resources, procure-

ment etc.) can contribute innovative ideas

and suggestions for improvements. Here

it is important to also permit ideas that

have nothing to do with the company’s

core business. Managers often focus on

internal topics while disregarding external

impulses.

This reinforces top-down thinking and

further limits innovation in a company.

Good ideas do not have to be sales-cen-

tered. Competitive advantages can often

be developed in departments that are not

sales-driven as well. A generally more open

innovation culture will automatically shift

the focus from maintaining the market

position to developing new business areas.

EMPLOYEE FEARTHE DEATH OF INNOVATIONEmployees are often afraid of taking

responsibility. This is why new ideas may

not even be proposed or supported in the

first place.

One of the fundamental elements of

intrapreneurship is to promote a sense of

responsibility and readiness to assume risk

among employees.


SUPPORTING EMPLOYEESSupporting employees, identifying their potential and developing it can be

promoted through various measures:

NEW WORKING ATMOSPHERETake employees out of their familiar corporate environment and allow them

to develop in a new working atmosphere.

LEARNING TO IDENTIFY POTENTIALTake seminars on assessing employee potential.

ANALYSISIdentify and promote employee potential (perform employee analyses).

FRESH BREEZERecruiting strategies – innovation instead of the norm. Career changers bring new

mindsets and modes of operation with them, and approach old problems from a new angle.

SOCIAL IMPACTInspire enthusiasm and transform employees into multipliers and intrapreneurs,

who in turn share their knowledge with their colleagues (social impact).

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Successful intrapreneurship requires

employees to take responsibility and man-

agers to give it. An intrapreneur cannot

be appointed by company management.

Roles and work sections are defined inde-

pendently of hierarchical structures.

FAIL-FASTAs described above, it should be clearly

communicated to employees that perfor-

mance and taking responsibility will be

rewarded and not punished. Clear rules of

conduct have to be defined for managers:

tolerance and the willingness to take risks

should be promoted and demonstrated.

Establishing a fail-fast culture, which

means accepting failure in the develop-

ment of innovations, is one of the greatest

challenges for the German economy. Mis-

takes are part of innovation just as much

as success. Only by trying things out is it

possible to determine early on whether

they work and are further developed.

Threatening consequences should be

avoided under all circumstances since this

provokes fear and can restrict entrepre-

neurial thought and action.

SPONTANEOUSNESS & AMBITIONIntrapreneurship is intended to reveal the

innermost motivations. This means an

intrapreneur cannot simply be appointed

nor responsibility assigned arbitrarily. As-

suming responsibility and the willingness

to accept the consequences of one’s own

performance must be based on sponta-

neousness. Those who consciously decide

to assume a central role through personal

incentive are able to ensure the necessary

commitment and reliability. It is unlikely

for persons who voluntarily assume the

position of intrapreneur to attempt blam-

ing others for possible failures. Rather they

develop the ambition of classic founders

and entrepreneurs, who are defined by

the will to carry on and the desire for their

idea to succeed. In the interest of their

goals, they are willing to not only perform

the tasks assigned to them but to promote

topics beyond their own field of respon-

sibility. Therefore the role of the intrapre-

neur is not defined by the assignment of

tasks and the decision-making authority of

a superior. The intrapreneur is dedicated

to the cause, thinks strictly in terms of

results and seizes upon tasks for which

responsibility has not been defined yet or

that take too much time to complete.

QUESTIONING THE CULTUREIn order to truly promote entrepreneur-

ial action, a company has to perform an

integrated review of itself and put its own

culture to the test. The desire for more

active employees must be accompanied by

establishing the required general condi-

tions.

The challenges identified above such as

taking responsibility, the willingness to

take risks and the competence of em-

ployee across department boundaries are

company values. Such values are hardly

widespread in the most common forms of

organization today, which focus primarily

on the efficiency of processes.

To combine diametrically opposed ap-

proaches, the topic of intrapreneurship

is not considered the responsibility of a

few employees but the attitude of a whole

company. The required transformation

can be promoted with the help of change

management. One needs to analyze which

employees and structures are ready for

intrapreneurship already – and which

are not. The conclusions that are drawn

demand an effective communication strat-

egy. Openness is an important principle

here: in communication and in regards to

pending changes. When company manage-

ment demonstrates what is relevant and

important in the future, then employees

can accept that.

In addition to an open communication cul-

ture, employee participation in important

company decisions is frequently cited as a

success factor. The goal of intrapreneur-

ship is to develop employees into internal

entrepreneurs. Involving them is essential

in order to reach this goal.

This can cause employees to truly become

interested in the success and strategy of

the company, rather than just going with

the flow.

RESPONSIBILITY AS THE KEY

INTRAPRENEURSHIPAS AN ATTITUDE


ASSIGNMENTTHE ASSIGNMENT OF RESPONSIBILITYalways poses a major challenge for companies. Improving internal communication

is an easy way to eliminate many problems:

SEMINARS (UNDERSTANDING ENTREPRENEURIAL THINKING, LEADERSHIP

AND MANAGEMENT CONDUCT TO SUPPORT INTRAPRENEURS)

SUPPORTING EMPLOYEES AGAINST SUPERIORS

ESTABLISHING BETTER COMMUNICATION BETWEEN EMPLOYEES

AND STAKEHOLDERS

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PROVIDING CAPITAL

INTRAPRENEURSHIPAS A PROCESSBudgets are allocated early on in most companies. Here the bud-

get figures from prior periods and internal political power play a

major role. Hierarchical structures frequently offer little freedom

for risky new ideas.

Disruptive innovations typically produce new market conditions

by changing existing markets or allowing new ones to emerge. But

since budget allocation is based only on historic values, potential

is wasted. Companies usually invest their capital in secure transac-

tions since losses from failed investments are revealed in control-

ling – quite unlike the unrealized profits.

CAPITALISTS AND ANGELS Venture capitalists and angel investors use a different approach.

They know that “no risk” also means “no opportunity”. But they

want to invest in opportunities. To minimize the overall risk,

they usually invest in more than one company at the same time.

Companies can use this approach as well. Internal venture capital

budgets are known under the term corporate venturing.

The process to allocate the funds is very similar to that in the open

finance market. Internal venture capitalists are provided with a

fund (pot of money) for meaningful investment. Their success

just like in the open market is measured according to the overall

development and yield of the fund. Intrapreneurs are comparable

to the founders of start-ups in this case. Initially their task is to sell

their idea to the venture capitalists through good planning and

convincing effort, persuading them to make an investment. Once

this is accomplished, the intrapreneur can start working on the

idea and developing a product.

SHOW ME THE MONEYDEBT OR EQUITY CAPITAL?

CAPITAL AND BUDGET MATTERS CAN MAKE A MAJOR CONTRIBU-TION TO THE INTRODUCTION OF INTRAPRENEURSHIP THROUGH THE USE OF MODERN APPROACHES:� Introduction of shared value propositions

� Corporate citizenship concepts

� Development of internal venture capitalists


GRANTING FREEDOMBut how can the employee in a tightly

organized structure that is streamlined for

efficiency position an idea with the venture

capitalist? Making time and resources

available is the solution. Employees need

the opportunity to work on and further

develop ideas. This requires working time.

Companies such as Google make up to

30% of the weekly working time available

to their employees for working on their

own ideas. More flexible solutions are

conceivable as well. In addition to time,

the idea driver also needs resources and

other colleagues for further development.

Therefore access to colleagues in technol-

ogy or sales to evaluate the chances of

success for an idea in the early phase is of

elementary importance.

Introducing staging processes can ensure

that the time invested in development is

controlled and projects with little chance

of success are identified and stopped early

on. This means ideas have to regularly

pass through quality gates and develop a

higher level of maturity. Those who miss

the targets cannot pursue their idea and

are no longer permitted to invest time in

it. This gives the company certainty that

no idea remains entirely disregarded while

money, time and resources are invested in

topics that promise a chance of success.

EXCUBATIONTransforming employees into internal

entrepreneurs can result in the actual

founding of new companies. Then the in-

trapreneur not only assumes responsibility

within the organization. As a partner of the

spin-off, he also shares in the entrepre-

neurial risk. At the same time he partici-

pates even more in the success of the idea.

The parent organization can also reap

benefits from such a spin-off. Integration

into the own processes does not have to

be as stringent as with internal projects.

At first glance this causes inefficiencies.

But upon further reflection, it can result in

greater freedom for further development

and scaling, especially in case of ideas that

are not aligned with the company’s own

core business.

PROCESSES – IMPORTANT SUCCESS FACTORSThe success of introducing intrapreneurship stands and falls with the processes. This is

why companies should focus on the optimization of the existing processes and the intro-

duction of new, more innovative processes early on:

• Close customer contact and customer-centered process models

• Process optimization for more entrepreneurial thinking

• Introduction of cooperation instead of conflict (essential for enabling innovation)

• Freedom of opinions and ideas instead of hierarchical restrictions and

• social blockades

• Iterative prototyping and the performance of user tests, directly with the user

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Intrapreneurship is both attitude and

company culture. The active will of com-

pany management to break away from

old structures and ways of thinking is the

critical success factor for the introduction

of intrapreneurship. Promoting entre-

preneurial action among the employees

requires establishing the right

general conditions.

The first intrapreneurs in a company are

often seen as agitators by their colleagues.

If those pioneers fail to receive very strong

support from the executive or manage-

ment, the entire program will not be ac-

cepted by the employees.

Management therefore needs to commu-

nicate that questioning what is established

and being inconvenient is desired. Open-

ness about the internal handling of new

ideas and direct interaction with custom-

ers and the market take centre stage in

the communication strategy.

Changes will also occur in terms of content

and modes of operation. When employees

are permitted to think more freely they

will choose new ways to reach their goals.

Insisting on fixed processes and methods

would therefore be counterproductive

for intrapreneurship.

But since intrapreneurs are after all still

employees, limits need to be set as well.

Intrapreneurs can and should not be

equated with the founders of start-ups.

They have consciously chosen a career in

an existing company. Therefore they can-

not expect the same degree of freedom as

founders. The right measure of freedom

and obligation will decide whether a

company benefits from intrapreneurship

or not.

Digitalization and the related market

changes can represent a great opportunity

for companies. They have the ability to

take the important step in the direction of

intrapreneurship, improving their overall

position. Should they miss this opportunity

and fail to develop their organization ac-

cording to modern markets, they will face

an uncertain future. The leading talents

will choose other organizations, and other

companies will develop better solutions for

their customers.

Intrapreneurship offers companies a

unique opportunity to make themselves fit

for the future. Are you ready?

- Daniel Hofmann (2015)

CONCLUSION

DANIEL HOFMANN

SENIOR INNOVATION CONSULTANT

Daniel’s roots are in digital and

electronic media (M.A.). As Senior

Innovation Consultant, he accom-

panies a wide variety of projects for

large international corporate groups.

He was able to accumulate experi-

ence with various work and com-

pany cultures abroad, starting with

his activities for mantro.net, among

others in Australia and Norway.

Combining these experiences, his

impressions as an external consul-

tant in companies and his work as

an intrapreneur within mantro.net

developed into a pronounced inter-

est in the intrinsic promotion of in-

novation in large enterprises. Daniel

has been intensively examining the

topic of intrapreneurship since then.

He attempts to promote it within his

projects and to build general aware-

ness of the topic.

THE AUTHOR


ZIELSTATTSTRASSE 19, 81379 MUNICH

GERMANY

WWW.MANTRO.NET

[email protected] | +49 89 416 177 00

intrapreneurs - the unsung heroes of large companies

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