Concept of Intrapreneurship

Very simply put, Intrapreneurship is Entrepreneurship practiced by people within

established organisations. That really begs the next question...

CONCEPT OF ENTERPRENEURSHIP:
1. Entrepreneurship is the process of creating value by bringing together a unique
package of resources to exploit an opportunity.
2. Entrepreneurship is the pursuit of opportunity without regard to resources currently
controlled.

From both definitions above, we can note that Entrepreneurs are opportunity driven.
Opportunity comes from changes in the environment, and one characteristic of
Entrepreneurs is that they are good a seeing patterns of change. It is also evident
that Entrepreneurs are not resource driven - while the manager asks, "Given the
resources under my control, what can I achieve?" the Entrepreneur asks "Given what
I want to achieve, what resources do I need to acquire?"

Difference between Intrepreneur and

Entrepreneur:
Intrapreneur is a person who focuses on innovation and creativity and who transforms
a dream or an idea into a profitable venture, by operating within the organizational
environment. Intrapreneurs, by definition, embody the same characteristics as the
Entrepreneur, conviction, passion, and drive. If the company is supportive, the
Intrapreneur succeeds. When the organization is not, the Intrapreneur usually fails or
leaves to start a new company.
An Intrapreneur thinks like an entrepreneur seeking out opportunities, which benefit
the corporation. It was a new way of thinking, in making companies more productive
and profitable. Visionary employees who thought like entrepreneurs. IBM is one
of the leading companies, which encourages INTRAPRENEUR.

MAIN DIFFERENCE BETWEEN ENTERPRENEURSHIP

AND INTRAPRENEURSHIP:
There are, of course, a few things that are different between Intrapreneurship and
Entrepreneurship. For starters, the Intrapreneur acts within the confines of an existing
organisation. The dictates of most organisations would be that the Intrapreneur
should ask for permission before attempting to create a desired future - in practice,
the Intrapreneur is more inclined to act first and ask for forgiveness than to ask for
permission before acting.

The Intrapreneur is also typically the intra-organisational revolutionary - challenging

the status quo and fighting to change the system from within. This ordinarily creates a
certain amount of organisational friction. A healthy dose of mutual respect is required
in order to ensure that such friction can be positively channeled.

One advantage of Intrapreneurship over Entrepreneurship is that Intrapreneur

typically finds a ready source of "free" resources within the organisation which can be
applied to the opportunity being exploited. Intrapreneurs seek out the organisational
slack or fat, and co-opt it into Intrapreneurial ventures.

However, innovation tends to be come harder as an organisation gets larger for the
following reasons:

• 1. The larger a company gets, the harder it is for anyone to know what
everyone is doing.
2. The specialisation and separation that help business units maintain focus
also hamper communication.
3. Internal competition magnifies the problem, because it encourages groups
to hoard, rather than share what they've learned." (Hargadon, A. and Sutton,
R.I., 2000, "The Knowledge-brokering", Harvard Business Review, May-June
2000, pp158-166)

IMPORTANCE OF INTRAPRENEURSHIP NOWADAYS:

No-one needs another web page telling them that the world is changing now faster
than ever before. Organisations are finding it harder and harder to survive by merely
competing. They are, therefore, increasingly looking towards their Intrapreneurs to
take them beyond competition to create new businesses in new markets.

• "As competition intensifies, the need for creative thinking increases. It is no

longer enough to do the same thing better... no longer enough to be efficient
and solve problems. Far more is needed. Now business has to keep up with
changes... And that requires creativity. That means creativity both at a
strategic level and also on the front line, to accompany the shift that
competitive business demands... from administration to true
entrepreneurship." Edward de Bono

• "Develop success from failures. Discouragement and failure are two of the
surest stepping stones to success. No other element can do so much for a man
if he is willing to study them and make capital out of them." Dale Carnegie

According to Gary Hamel, innovation will be the critical element in creating wealth in
the future. (Marrs, D., 2000, "Old Companies given Second Chance", Business Day,
September 21, 2000, pp20)

CAUSES BEHIND RETARDATION OF

INTRAPRENEURSHIP:
The primary factors retarding Intrapreneurship are:

The costs of failure too high, and the rewards of success are too low.
Intrapreneurs need to be given the space in which to fail, since failure is an
unavoidable aspect of the Intrapreneurial process. This is not to say that organisations
should simply condone failure, but rather that organisations need to begin to measure
and attribute failure to either Intrapreneur fault, or circumstances beyond the
Intrapreneurs control - and punish and reward accordingly. Similarly, the rewards for
success are usually inadequate - few organisations provide rewards for Intrapreneurs
that even closely approximate the rewards available to the Entrepreneurial
counterparts. Most incentivisation systems need to be upgraded accordingly.

• "Enron: If we've broken a paradigm, it's the compensation paradigm. We pay

people like entrepreneurs. A lot of companies talk about intrapreneurship and
ask people to take risks, but if those people succeed they get nothing more
than a small bonus, and if they fail they get fired."

"You can't create wealth unless you are willing to share it." Fortune Magazine
(Gary Hamel, 2000:120, in Fortune Magazine, June 12, 2000)

Inertia caused by established systems that no-one is willing to change. Most

organisations are governed by implicit and explicit systems, and in many cases people
are reluctant to change them. Intrapreneurs are met with "this is the way we've
always done it around here", "if it ain't broke, don't fix it", and "changing it now would
just take too much effort..." Many organisations use their existing systems to prove
they already have the "right answer" (see above), effectively dousing creativity.

Hierarchy. Organisational hierarchies are what create the need to ask for permission
- the deeper the hierarchy, that harder it is to get permission for anything new.
Hierarchies also tend to create narrow career paths and myopic thinking, further
stifling creativity and innovation. People lower down in the hierarchy have a tendency
to become dis-empowered through having to ask permission, eventually developing
the "victim mentality" that causes reactivity.

Why do many Intrapreneurs remain within bureaucracies despite these factors? One
reason may be for the thrill of outwitting the Pointy-Haired Boss (ref: Dilbert comics).

Each of the elements above can become deeply ingrained into the culture (the
symbols of acceptable behaviour) of the organisation. Consequently, bureaucratic
behaviour may remain entrenched despite management's overt attempts to create an
Intrapreneurial organisation. What then can organisations do to encourage
Intrapreneurship? Here, the old adage applies: "You get what you measure." (A little
bit of measurement based incentivisation wouldn't hurt either.) Organisations,
therefore, need to find ways to measure and reward Intrapreneurship - both in terms
of its frequency, and the rigour with which it is pursued. Organisational processes and
structures are required to foster Intrapreneurship, just as they are for any other
aspect of the organisation.

REASONS BEHIND INTRAPRENEURSHIP INITIATION:

• "The best innovators aren't lone geniuses. They're people who can take an idea
that's obvious in one context and apply it in not-so-obvious ways to a different
context. The best companies have learned to systemise that process."
(Hargadon, A. and Sutton, R.I., 2000, "Building and Innovation Factory",
Harvard Business Review, May-June 2000, pp157)
 EXPERT OPINION ON ITRAPRENEURSHIP:
In my mind, Intrapreneurship at a group level is inextricably intertwined with
organisational learning. I therefore end with a quotation from Gandhi which sums up
the spirit of Entrepreneurship as well as any does:

• "Live as if to die tomorrow. Learn as if to live forever."Mahatma Gandhi

REALITIES OF INTRAPRENEURSHIP:

“intrapreneurship” is nothing more than a myth that academics and

consultants create to sell books. Their contention is that the
ownership of the final product or service does not rest with the
intrapreneur; since the paycheck of the intrapreneur is not tied to the
success of his venture, the blood, sweat, toil and tears are not
invested at the same level; the parent organisation usurps intellectual
property and that there is no lifelong equity involvement possible.

ADVANTAGES OF INTRAPRENEURSHIP:

Having said that, intrapreneurship does have a lot to recommend it.

Given that technology and globalisation are driving competition, it is
only agile organisations that can pounce quickly on new
opportunities, which will retain an advantage over slower competitors.

MODERN TRENDS:

A case in point is the hand-held device giant, Palm. As the company

expanded, it began stifling intrapreneurship, and the founders left to
start Handspring, which is when Palm realised its mistake and
purchased the company back at a cost of close to $170 million.

Business transformation in the IT space is not just about the numbers

game any more but about differentiation through customer
relationships and operational excellence. Tom Nies, CEO of Cincom
and one of the longest-serving active CEOs in the IT industry, feels
that the advantage of intrapreneurship lies in the ability of a company
to utilise its larger economic and technical resources to expedite
decision-making processes. However, he points out that an
organisation “should be able to demonstrate the willingness to break
with traditions by embracing initiatives that run counter to the way the
company had done things in the past.”

This also entails a change in the way that profits are shared because
the kind of involvement that an IT organisation requires for an
effective business transformation, can only come if every employee
truly has a stake in the business and not just as an employee but as a
stakeholder with a share in the profits. In other words, by creating
entrepreneurs within the business, or “intrapreneurs” by introducing
profit-sharing in a more immediate context.

INTRAPRENEURSHIP AS A SOURCE OF INNOVATION:

It is this “intrapreneurship” then, which will drive innovation and

growth. How does one foster it? Intel seems to have worked a way
around it. They established an in-house “new business initiative” in
1998 to bootstrap new businesses that employees propose by
financing businesses that the company’s own employees start. The
Xbox story is a similar one. Game designer Seamus Blackley had
joined Microsoft in 1999 after a big project of his failed. At Microsoft,
he was able to develop his concept in relative freedom and get credit
for it.

This open policy has paid off for GTE’s Information Systems Division,
as a company and for individual employees. The program was
developed by a former GTE employee, Anthony Spadafore, who left
GTE to form his own consultancy program, Pathfinders, which works
towards developing self-directed employees. Spadafore extensively
counselled the volunteer employees in this new way of thinking and
working. From the initial group eight new projects were proposed and
a number of them funded. As a direct result of this, a number of
employees have defined totally new career paths for themselves and
the programme has totally redefined how GTE does business.

ADVANTAGES OF APPLYING INTRAPRENEURSHIP:

Key learnings from companies that have successfully implemented

intrapreneurship in business encompass several elements, including
identifying and fostering employees who have what are considered to
be intrapreneurial traits; developing an intrapreneurial process for
part or all of a business, and developing innovation through rewarding
intrapreneurial behaviour.

CONTRIBUTION OF INTRAPRENEURSHIP TOWARDS

INDUSTRY:

Ultimately intrapreneurship links innovation and business

transformation to create a sustainable profit-sharing model that, in
turn, works towards creating a stable organisation and industry.