Intrapreneurship is a driving force for innovation
Most of what is written and discussed about risk taking by individuals in business is focused on entrepreneurship, which deals with taking risks to start, grow and expand businesses. However, another type of risk-taking occurs within established firms. Intrapreneurship is when employees take risks within an organization they do not own. It often is associated with larger businesses.
First coined in the late 1970s, the term intrapreneurship was popularized by Tom Peters and Bob Waterman in their 1982 best-selling book, “In Search of Excellence.” Intrapreneurship refers to employees’ initiatives in organizations to undertake something new, innovative or creative on their own, usually outside the formal structure of the organization. They sometimes are referred to as inside entrepreneurs.
Intrapreneurship borrows the principles of entrepreneurship. While entrepreneurship usually means starting a new business, intrapreneurship means taking risks within an existing organization. It can be a driving force in creating programs, products, services, innovations and policies.
Intrapreneurship has taken on meaning as a career option. Choosing to be an intrapreneur can give an individual the ability to gain greater job satisfaction by exercising creativity, exhibiting leadership or otherwise taking a risk in the more secure environment of an existing company.
For the organization, intrapreneurship is crucial because companies need people who will take initiative and use their entrepreneurial spirit to try to create a competitive advantage for a firm.
While it may seem like it should be easy for a company to encourage employees to embrace this intrapreneurial spirit, it is less common than one might suspect. Managers may be asked to support these intrapreneurial efforts by committing some level of the company’s resources and, more importantly, need to be willing to accept the failure that is part of intrapreneurial efforts.
Managers often are reluctant to share in the risk-taking that is part of this intrapreneurial spirit. If a manager’s employee risk-taking fails, it could reflect badly on that manager. Many managers do not want to take that risk.
While it might be understandable some managers may not want to take on the perils associated with supporting intrapreneurial risk taking, a number of studies show the importance of these activities. Strong correlations exist between firms that at least tolerate, if not support, intrapreneurship and innovation.
New ideas, including successful new products, often are the fruit of these
firms’ support of intrapreneurs and their efforts.
One of the legitimate fears managers have is the loss of these intrapreneurial employees.
It is not uncommon for intrapreneurs to convert their projects into businesses of their own. This is especially true for those in their 30s or 40s who are more likely to take on the chance of venturing into their own businesses.
While some managers and organizations resist these efforts, others famously have endorsed them.
One of the first publicized intrapreneurial efforts was Lockheed Martin’s program known as Skunk Works. The 3M Company’s formal intrapreneurship program that provides financial support and allocates time on the job to develop projects may be the most well-known. Google also has developed a reputation for its entrepreneurial spirit.
More recently, three social intrapreneurs at GlaxoSmithKline created a program to help diagnose disease in places without access to medicine and were able to convince their bosses to support their efforts. The three researchers from the large pharmaceutical company have spent much of their free time developing low-cost kits for diagnosing health problems in developing countries such as India and Bangladesh.
These principles associated with risk taking are being taught in entrepreneurship classes in colleges and universities. While most students taking an entrepreneurship class may not become the next Steve Jobs, or for that matter may not even start their own business, they still can apply these concepts in the organizations in which they become employed.
It is beneficial for students to be exposed to and understand the ideas behind entrepreneurial and intrapreneurial thinking.
Perry Haan is professor of marketing and former dean of the business school at Tiffin University. He can be reached at (419) 618-2867 or firstname.lastname@example.org.