If you read any random article on intrapreneurship, chances are the author points to Gifford Pinchot III as the one coining the term in 1985 as well as being the creator of the “the Intrapreneur’s 10 Commandments“ that have circulated widely since their creation.
Some even call him the father of intrapreneurship.
Why is intrapreneurship a must-do for companies?
In a rapidly changing world, innovation is the source of both profit and survival. The faster the world is evolving, the faster old ways of doing things, old products and and old service designs are made obsolete by innovative competitors. So innovation is essential.
The surprising fact is this: You don’t get innovation in large organizations without intrapreneurs. Dr. William Souder did a 10-year life cycle study of 289 innovations in 53 companies. He was hoping to discover a process for driving innovation in large companies. He came back a bit discouraged.
The only thing he could find in common between the successes was the presence of a passion intrapreneur. As he put it, “The intrapreneur is an essential ingredient in every innovation.”
Why do companies struggle with innovation in the first place?
Companies are organized to do what they are currently doing. Anything new cuts across organizational boundaries and probably is not directly helpful to the metrics by which people in all those boundaries.
Are companies really ready for intrapreneurship in its true form?
Most companies have a culture and a structure that makes innovation difficult. But that doesn’t rule out intrapreneuring. What works is a relationship between an intrapreneur and a sponsor. The sponsor helps the intrapreneur get through the challenges and gates of whatever system has been put in place to support (block actually) innovation. In general successful intrapreneurs gather a team of sponsors who collectively support them despite “the slings and arrows of an outraged bureaucracy.”
Another relationship is also important: the relationship between the intrapreneur and the team.
If all of these relationships are strong, there is a good chance of success. If not, it won’t happen.
What is the most surprising development in the field of intrapreneurship since you coined the term in 1985?
To me, the most surprising development has been the success of free intraprise. Free intraprise supports intrapreneuring of internal services. Most people in a large organization provide services to other people in the organization. What if the way those services were provided was fully intrapreneurial?
This system has proved to be 1.8 times as productive as more normal ways of providing internal services. It works also and especially in government, as I have outlined in this post: http://www.pinchot.com/2010/03/intrapreneuring-in-government.html
Some of the free intraprise system establishing dynamics:
- There is an internal bank that manages the details of the free intraprise system.
- The bank and its steering committee license “intraprises” to operate after they present a plausible business plan. It maintains accounting for the teams.
- The bank provides intraprises with a loan to get started.
- The intraprises get no allocated funds; they generate the revenue to support their salaries and costs by selling services inside the organization.
- As long as an intraprise does not break any fundamental rules they may pursue any internal customer in competition with other parts of the organization such as staff units, direct hiring by their customer, outside suppliers, etc.
- An intraprise may set its prices and choose what customers to pursue
- An intraprise deposits funds received in the bank. They carry over from year to year until they used. They may be used for any legitimate business purpose without requiring permission.
- Insolvent intraprises will be dissolved (HR will try to find members other jobs).
- An intraprise may chose its members from willing applicants
- No outside manager can force the team to accept a member or prevent one from joining
- No outside manger can commandeer an intraprise team member
- The leadership will be determined by the team and leaders will not be removed by outside authority except by the Steering Committee with cause
What have you been up to lately?
I have just created a series of 3 online courses in intrapreneuring. The first was a 3-hour course introducing the basic principles of intrapreneuring. It was a mandated course for 1100 IT professionals in a German firm. Despite the negative impression created by being forced to take it, it got a 95% approval rating at the end. This rarely happens with a mandated course.
The second course continued lessons on how to succeed as an intrapreneur, however the main content was on preparing a business plan for an intrapreneurial team. 12 teams began the course. 6 were funded by an executive review panel on graduation. Others found some time and resources to continue. The returns for the company so far are ten times the total investment.