The Pinchot Perspective

Intrapreneuring in Government

According to the 2005 Pandolfi report, employees in Forest Service  Enterprise Team Program were 1.8 times as productive as the average agency employee. The Forest Service has discovered a cure for bureaucracy that can work in any large organization.

The Enterprise Program is a intrapreneurial system for releasing the entrepreneurial passion of employees. The secret is choice and a well designed intrapreneurial system to make freedom work inside large organizations. This is the first of several blogs describing this miracle.

Imagine if the whole government, like the enterprise teams, were 1.8 times as productive. With that level of efficiency the Federal Government would save $1.578 trillion a year. Imagine if a major corporation became 1.8 times as productive.  

Because this new system for organizing work brings the freedoms and virtues of the free enterprise system inside large organizations, we call it “free intraprise.” (for intra-organizational enter-prise.) 

Enterprise team members remain Forest Service employees, but they live off the fees their intraprises earn by selling services to internal customers. The fees they earn support their salaries, overhead and expenses.

Among other services, Forest Service enterprise teams provide:

• Biological field work
• Planning services
• Ecosystem restoration
• Predicting fire risk and fire behavior 
• Trail construction
• Computer services such as database programming and website development
• Archeological services: preserving history and creating public experiences 
• Conflict resolution

In addition to making employees more productive, the free intraprise system also makes them happier. They have a level of freedom, honest feedback and personal growth that are rare inside a large organization. 

Typical comments:

“I think that my job with my Enterprise Unit is the best job that I’ve ever had.”

“The Enterprise program has made me what I am today.”

As long as they have enough work, an enterprise team can “fire” customers who don’t treat them with respect or who ask them to do something that they don’t want to do. They can redefine their own jobs. 

When Tim Holden and Blaze Baker found themselves doing more work than they liked on traditional timber harvests, they created the Above and Beyond enterprise team to focus on the ecological restoration projects that are their passion. They have found plenty of  customers who want the same thing. In their first 16 months their enterprise had over $1.3 million in sales. As a result the Forest Service is more effective at ecological restoration and Tim and Blaze are living the life of those whose work serves their deeper values. 

The Origins of Enterprise:

The Enterprise Team System began in 1994, when John Phipps, then the manager of the El Dorado National Forest, read The End of Bureaucracy and the Rise of the Intelligent Organization and invited the authors, my wife Libba and me, to join the team that was reinventing the Forest Service. The team produced a report recommending a well regulated internal market for intrapreneurial services within the agency. Libba and I were thrilled. We had created free intraprise to liberate employees to bring their whole selves including their values to work. We believed we were on the verge of liberating employees everywhere.

The report sat on the shelf until 1998. We were crushed. Then John Phipps, assembled a critical mass of  leaders for implementing free intraprise in the California region. We launched ten enterprises in 1998, six more in 1999. 

The Enterprise Program struggled through years of neglect by the headquarters, kept alive only by the enthusiasm of its customers. Now the program is suddenly getting major support from the Washington office. If it grows, the Forest Service might once again become, what it once was, the premier example of a government agency that works. 

In future posts we will cover:

• The three design features that make the enterprise systems work
• The secret financial system that supercharges free intraprise
• The Enterprise Operating Principles
• The intelligent organizations of the future
• Free intraprise success stories

See also: Back to Intraprenering & Intrapreneuring in Accounting

Intrapreneuring in Accounting

  In a comment to my blog post Back to Intrapreneuring, Hannah McCorrie asked:

“I have had a lot of trouble trying to convince my supervisors that intrapreneurial skills should be taught to accountants. They feel that accountants are only required to provide information using the tools they learn in training.

However, from my research it is evident to me that business is changing rapidly and all areas of business need to become more innovative, including accountancy. Management accountants are constantly reinventing the methods they use, the main example currently being the "beyond budgeting" movement.”

Right on Hannah!

In my coaching of intrapreneurs I have found that having the support of accountants and finance people who understand intrapreneuring is essential. If your future employer wants innovation, then having accountants who understand and value intrapreneuring will be necessary.

In my two greatest successes implementing the most advanced form of intrapreneuring, The Intelligent Organization, my primary sponsors for the implementation of internal markets and internal service intrapreneuring were from finance and the most essential partners were the accountants in the divisions served by the intrapreneurial teams. Without their desire to make the system work for the internal service providing intrapreneurs, they would never have received the internal transfer payments on which their existence depended. Given the inflexibility of most big company computer systems it often required courage and ingenuity to get the systems to do what was needed to make free intraprise possible.

I also believe that you are right about the need for innovative accountancy in general. Entrepreneurs and small and medium sized enterprises need accountants who can figure out how to account for new business models and new kinds of contractual relationships. So do innovators inside larger organizations. Increasingly routine accounting will move to countries with cheaper labor. If you want to be employed in accounting for a career in the United States and other advanced nations, you will need to be innovative. This means you will need to understand intrapreneuring, or work for an accountant who does.

Another area of innovation in accounting is triple bottom line accounting. Increasingly corporations reporting on their success in the economic, ecological and social arenas. Check out TriLibrium, a triple bottom line accountancy founded by Brian Setzler and André Furin, both graduates of the Bainbridge Graduate Institute. Extending the role of accountants beyond counting the numbers, they note:

“In a triple-bottom-line world, numbers rarely tell the whole story or serve as an adequate guide for making decisions or measuring performance.”

Triple bottom line accounting deals with the larger picture and thus prepares accountants to be better business partners with their clients.

To summarize: As routine work moves to lower cost nations, the work done in the US and other wealthy countries will increasingly be about innovation and major change issues like sustainability. Even if they are not driving innovation themselves, accountants in the richer nations will increasingly find themselves supporting innovation, which will require them to be flexible and innovative themselves. Hannah, don't give up on intrapreneuring. (I never thought you would.)

See also: Back to Intraprenering & Intrapreneuring in Government

The HappoDammo Ratio

In the summer of 2004, I was in a workshop at Hollyhock in BC when my son, then about 28, said, “Dad, you can’t stay indoors all week in weather like this. Why don’t you play hooky for one afternoon and let me show you how my generation has fun.”

He took me to the Linnaea School’s disc golf course. It was in a beautiful forest, mostly Douglas Fir and Western Red Cedar, with a knee-high understory dominated by Salal and Sword Fern.

Disc golf (or frisbee golf ) is played much like traditional golf, except that one throws Frisbee® like discs instead of hitting a golf ball. The “holes” are traditionally metal baskets, though in this case they were just old five-gallon paint buckets painted red and nailed on top of a cedar post.

We played 36 holes and then decided to go to for a swim. At Haig Lake we took off our clothes, swam to an island half a mile away, ran around on the cliffs, were chased by yellow jackets, dove back in and swam back to our clothes.

As I put them back on, I realized that we had had a very happy afternoon and done a tiny fraction of the environmental damage done by a typical afternoon of golf followed by a dip in the club pool. No bulldozers were used to make the Linnaea course. No trees were cut down; no sand hauled in; no pesticides, herbicides or fungicides or irrigation were used. I guessed that we had achieved at least the same level of happiness with less than one thousandth of the environmental damage.

As those thoughts were drifting through my head, I saw a simple arithmetic formula that seemed to me to point to an important and obvious truth.

The name “HappoDammo Ratio” seemed a little goofy, but I couldn’t think of one I liked better. Now it seems to have stuck.

As it turns out, the HappoDammo Ratio is a useful compass for navigating the challenges of our time. In order to deal with climate change, poverty, toxic accumulation, resource exhaustion and a host of other problems, we are either going to have to figure out how to get more happiness from less stuff or we will keep on increasing consumption until the systems on which we depend crash. The HappoDammo Ratio defines the fundamental challenge of our times. It points to the possibility for vast improvements over the current course of society.

I use the HappoDammo ratio for lifestyle and purchasing choices, new product design, organizational improvement, analyzing government policy, etc. In my own life, I fly less and enjoy life at home, which is higher Happo and lower Dammo. I have a motorcycle that gets 50 mpg and is more fun than a car. However, if I take a systems view it may not be higher HappoDammo because it makes my wife unhappy. So I take the bus and meditate along the way. I'm just learning.

In business, I look for creative ways to make customers and employees happier using less stuff. More happiness is what people want and will pay for. Less stuff is usually less cost. Understanding what makes people happy is a critical 21^st Century business skill. This way lies profit as well as hope for our society.

For those hoping to shape society in other ways, the HappoDammo Ratio provides a powerful creative paradigm. For environmentalists it suggests a shift:

From: Recommending sacrifice for the good of nature and future generations.

To: Advocating for greater happiness today as well as in the future.

This is a far more appealing proposition.

The HappoDammo Ratio gives me hope. Many current ways of striving for happiness are so ineffective that it won’t be hard to discover less resource intensive ways to produce greater happiness. In future blogs I will discuss business opportunities that the HappoDammo Ratio uncovers, ways to measure happiness and damage and more information about what actually makes us happy.

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(Credits: Photo of Disc Golf Woman by Oberazzi using cc-by-sa, Photo of Riviera Country Club Golf Course by Dan Perry using cc-by, Photo of Disc Golf Course by Dave and Lisa using cc-by-sa, Photo of Happy Cambodian Girl by mrcharly using cc-by-nc-nd)

Back to Intrapreneuring

Although in a fall 1978 paper with my wife Libba I originally coined the term intrapreneur, I have been ignoring intrapreneuring for a while to focus launching the Bainbridge Graduate Institute. Now intrapreneuring is suddenly becoming relevant to me again (and increasingly to others). 

Intrapreneuring means two things to me:

1. A set of business practices that liberates people with entrepreneurial personalities to innovate rapidly inside larger organizations for the benefit of that organization and its customers.

2. The actions of an individual and/or a team that is acting in an entrepreneurial manner to serve the best interests of larger organization and its supply chain, with or without official support.

Intrapreneuring is suddenly becoming more important because bureaucracy can’t respond rapidly enough to respond to challenges like climate change and cultural turbulence.

Civilization is at a turning point. We are becoming aware that our economies and lifestyles need massive amounts of innovation to remain viable. Only those institutions that can reinvent themselves will survive. Creating the climate for intrapreneuring is an effective way increasing innovation and sustainable innovation manyfold.

In advanced nations the need for intrapreneuring is even greater.

To maintain full employment in the face of low cost global competitors, advanced nations, must innovate far faster and more cost effectively than they do today.

In studying hundreds of innovations inside larger organizations, I found that in every case the success of the project was driven by a passionate and persistent intrapreneur. This does not mean intrapreneuring was company policy, in most cases it happened despite the rules. But the lesson is still stark. Intrapreneurs are essential to innovation in large organizations. For this reason it pays to create a culture that encourages intrapreneurial activity. Not doing so in today’s innovation hungry world will lead to an organization’s extinction.

In future blogs I will address both how to increase the effectiveness intrapreneuring and how to be a successful intrapreneur. 

See also: Intrapreneuring in Government & Intrapreneuring in Accounting