Intrapreneurship – Key to Long-Term Survival

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The Business of Intrapreneurship Series

The business of intrapreneurship series tackles key strategic and operational aspects that every established business must consider if they wish to remain entrepreneurial, attract innovators and develop future business leaders.

The series is authored by Guillaume Hervé, the Business Families Foundation resident expert intrapreneur and the author of Winning at Intrapreneurship: 12 Labors to Overcome Corporate Culture and Achieve Startup Success. Mr. Hervé is the President of G3point0 Consulting, the Chairman of the Board of CTS Health, an executive mentor to entrepreneurs and a sought after speaker on strategy and intrapreneurship.

Intrapreneurship – The Key To Long Term Survival

Well-documented examples of some of the world’s most successful intrapreneurial companies include Virgin, Boeing, Cisco Systems, W.L. Gore, Google, Apple, 3M, the Walt Disney Company, HP, Fujifilm, Procter & Gamble, Audi, Whirlpool, Toyota Motor, GM and Fuji Film, to name a few. These companies have understood that to remain relevant in today’s fast-paced and internationally competitive markets, they need to focus as much time looking to new markets and lines of business as they do working on innovating their existing core products and services.

 

Intra Survival [In-Text - Branson]Virgin CEO, Sir Richard Branson said it best in a 2011 Entrepreneur Magazine interview, “Virgin could not have grown into the group of companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities often leading efforts that went against the grain.”

Intra Survival [In-Text - BCG Logo]Intrapreneurship remains top of mind for today’s CEOs. According to the Boston Consulting Group (BCG) report on the world’s most innovative companies, innovation is among the top three priorities of executives worldwide, but only a small percentage feel confident that their organization can successfully deliver on their innovations. It is this ability to successfully deliver on innovations that separates intrapreneurship from other business processes.

 

Intra Survival [In-Text - Google Logo]Google leads in this regard and has gone as far as creating, earlier this year, Google’s Area 120 where Google intrapreneurs will be able to pitch their business ideas to receive funding to build their (corporate) startups.

 

Intrapreneurship is the bridge between entrepreneurship and corporate innovation.  It is for companies who wish to follow an organic growth strategy.  In Winning at Intrapreneurship I define intrapreneurship as,“Monetizing an innovation and turning it into a profitable and sustainable business within a corporate environment.” A lot is packed into that simple definition.

  • First, notice the emphasis on “monetizing.” This highlights the need for a business process that can take innovations out of the lab and into the real world and find customers willing to spend money for it.
  • Second, is the emphasis on “turning it into a business” which distinguishes intrapreneurship as the vehicle to create new businesses or lines of business and enter new markets. This is in contrast to the core business, which is intensely focused on maintaining or growing the existing portfolio of products and services.
  • Third, the words “profitable and sustainable” refer to the need to develop and validate a business model that allows for a reasonable profit and for the new business to be scalable to a sustainable level.
  • Finally, and often the most underestimated, are the words “within a corporate environment.” These simple words distinguish the intrapreneur from his cousin the entrepreneur. The reality of intrapreneurship is that it comes with some constraints, which are never faced by standalone entrepreneurs in the world of independent startups. Some of these include a limited freedom of movement, more aggressive time expectations to demonstrate results, limited funding options, less decision-making authority, and corporate resistance to change.

machine-ideeUnfortunately, many companies fail to maintain their leadership and in some cases become extinct because they are so focused on the incremental innovations for their existing business that they fail to see the disruption happening around them. This results in being surprised by a startup moving faster then they are or an aggressive and intrapreneurial existing corporation moving into their markets. As Clayton Christensen pointed out in his ground breaking book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail (Harvard Business Review Press), companies that have reached a position of dominance in their markets become very good at improving their existing businesses and are so overly preoccupied defending these established businesses, that they fail to see disruptive technologies entering on the fringes of their client base. To avoid being left behind, today’s businesses must invest in intrapreneurship and develop it as a separate business process, with its own expertize, funding, best practices and intrapreneurial leaders.

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