Why Intrapreneurs Are Not Just Entrepreneurs Working Inside Large Companies
In a previous article, I wrote about how people wrongly assume that entrepreneurs working in startups create more transformative innovations than intrapreneurs working in large companies. The research data reveals the opposite. In fact, over 70% of transformative innovations are conceived, developed and commercialized by employees working within large companies. This finding stands in stark contrast to how contemporary society currently celebrates entrepreneurs as heroes.
It is important to ensure that people do not misconstrue the point I am trying to make here. My goal is not to denigrate entrepreneurs. Entrepreneurship matters. The creation of new companies makes a significant contribution to the economy, as well as the advancement of society. The inventiveness and proactive risk taking that entrepreneurs engage in should be admired and celebrated.
Let’s Not Overdo It
But even as we celebrate our entrepreneurs, we should do this in a manner that is consistent within their actual contributions to society. The celebrity status we give entrepreneurs means that we spend a disproportionate amount of time studying and talking about them. When we do that, we are ignoring the people that actually contribute the most to innovation. If employees working in large organizations create over 70% of transformative innovations, then we should be paying more attention to them and learning how the great intrapreneurs succeed.
Another challenge with their celebrity status is that we start to teach the qualities that are typical of entrepreneurs to innovators working in large companies. For sure, there are some shared qualities between entrepreneurs and intrapreneurs. Both need to be proactive and risk taking, comfortable with ambiguity, engage creative problem solving and be aware of market needs.
While some of these shared qualities with entrepreneurs can be helpful for corporate innovators, there are also some qualities of entrepreneurs that can be down right counterproductive. I have seen many innovators flame out within large companies because they did not have enough self-awareness to recognize that they were working in a different context to startup founders. Just like entrepreneurship may not be for everyone, the same could apply to intrapreneurship.
There Are Important Differences
Corporate innovators are not simply entrepreneurs working in large companies. There are certain characteristics that successful intrapreneurs need to have. These characteristics are connected to context in which corporate innovation takes place. A key difference with startups is that many large companies already have an existing core business that is successfully generating revenues and profits. Even with the threat of disruption, this existing business still needs to be managed and this often takes up the time and attention of leaders.
To innovate, corporate innovators have to successfully navigate the complexities of a bureaucracy designed to run an existing business. They have to build relationships with leaders who may fear that their innovations will cannibalize existing businesses. For corporate innovators, it is not just about working on their ideas. They have to focus on three other elements in order to succeed:
- Leadership Support: Typically, we tell both entrepreneurs and intrapreneurs that, for their innovations to succeed, they have to focus on meeting their customers’ needs. However, for intrapreneurs there is an internal customer that they also have to serve. Very few innovations inside companies can succeed without leadership support. This means intrapreneurs have to understand their leaders’ strategic goals and ensure that their innovation projects are aligned to this. Unlike, entrepreneurs who can seek funding from several venture capital firms, intrapreneurs have only one venture capital firm to work with. This is why strategic alignment and leadership support matters.
- Bridge To The Core: The most unsuccessful intrapreneurs I have met in my work with companies are those that are frustrated by corporate politics. In contrast, research by Abbie Griffin and colleagues on serial innovators shows that the most successful intrapreneurs view corporate politics as part of the challenge that they have to manage in order to succeed. They enjoy overcoming corporate hurdles and building a bridge to the core business. For corporate innovators to succeed, they need to build support from colleagues in business functions as diverse as legal, compliance, finance, marketing, branding and human resources.
- Innovation Practice: This is one area where there is the most overlap with entrepreneurship. Just like entrepreneurs, intrapreneurs need to design and test their value proposition and business models. However, intrapreneurs do face the challenge that their leaders are risk averse. They live in this double-bind world where they need resources to validate their ideas, but can only get those resources if their ideas have already been validated. As such, intrapreneurs need to use their political acumen to get resources and create space to validate their ideas. As they start to show traction, they are then able to attract more resources so that they can scale their innovations.
Learning how to navigate corporate politics and leverage relationships is the great intrapreneur’s super power. This is what they have going for them, beyond having breakthrough ideas. Without this super power, corporate innovators cannot succeed. It is true that corporate politics has a negative brand. It is often viewed as an unjustified power grab or the self-serving blocking of the careers of others.
In the context innovation, what I mean by politics is that intrapreneurs need to have the ability to build relationships with key stakeholders. The need for power and legitimacy within the organization cannot be ignored. Without power and legitimacy, innovation cannot happen in a repeatable and sustainable way.
As such, we need to be focusing on how we can train and support intrapreneurs to develop their skills in building relationships with key stakeholders. This is because if they succeed at this, they will have access to resources that entrepreneurs can only dream of. This includes access to the multiple capabilities within their company, a well known brand, access to customers and resources to scale.
In Driving Innovation From Within, Kaihan Krippendorff writes about an interview he did with Hoby Darling — the executive who led the Nike+ digital business that created the Nike Fuelband. In the interview, Hoby Darling remarks that corporate innovators have to spend a lot of time “lining up the cannons”. But if they succeed and the cannons go off, “they go off with a big bang”. This is a remarkable insight and something for all intrapreneurs to always remember. We are not just entrepreneurs working in large companies.