I’m invited on a regular basis to participate as one of several panel ‘judges’ at the Stanford Graduate School. At the end of their term, the Stanford MBA students have to pitch their ideas as ‘intrapreneurs’, and the panel acts as the board members within a bigger organization deciding about the funding or rejection of the demonstrated ideas.
Intrapreneurship means driving change from within organizations.
An ‘intrapreneur’ acts in an entrepreneurial fashion within an organization to innovate rapidly for the benefit of the organization and its customers. They need to be ‘dreamers’ and ‘doers’. Or, in other words, doers that still dream, imagine and act. They should not be confused with inventors, who often start out with a longer-term, often incomplete vision. ‘Intrapreneurs’,on the other hand, are under constant pressure to convert a vision into prototype and into market success in a very short time frame.
Two weeks ago my colleagues from takepart.com invited me to a private meeting with Al Gore in Beverly Hills. Al Gore mentioned an executive survey that asked CEO’s whether they would make an investment that would meet their internal ROI targets and make their business stronger, more profitable and sustainable. One hitch: It would also make the company slightly miss its next quarterly earnings estimate.
Result: 80% of CEO’s said ‘no’.
Why do I mention this?
The ‘enemy’ of ‘intrapreneurs’ is short-termism and organizational structure.’Intrapreneurs’ get frustrated if they constantly have to seek permissions at different levels of the organization. It stifles mobility, creativity and innovation.
As a result, ‘…..the venture capital industry is producing 35% ROI by taking frustrated R&D people and their rejected ideas out of large companies, and financing the commercialization of those ideas. The fact that the venture capital community can make 35% ROI on rejected ideas and people should be a constant rebuke to everyone in the R&D community’ [Source: Innovation Through Intrapreneuring, Gifford Pinchot]
Intrapreneurship cannot be mandated by top management. Its based on grassroots innovation and requires stamina, courage, opportunism as well as political and networking skills. But top management has the responsibility to create an environment that fosters a global culture of collaboration to keep ‘intrapreneurs’ engaged. These people need to feel that they can ask the demanding questions, be creative and pursue their ideas.
Intrapreneurship leads not only to new ventures, it leads to other innovative activities and orientations such as development of new products, technologies, services, strategies and competitive postures. So it certainly pays to create a suitable environment for ‘intrapreneurs’ where its possible to learn from failure, rather than punish it.
Emma Stewart, head of sustainability solutions from Autodesk, is leading the mentioned MBA program. This is one of her slides:
Conclusion: ‘….Managers need to be open to new thinking but colleagues need the courage to push when they really believe. Let’s be clear: this will be messy. Change usually is.’ [Bill McDermott’s response to Mario Hergers comments]