ORGANIZATIONAL CHARACTERISTICS THAT ENCOURAGE INTRAPRENEURSHIP
Intrapreneurs are employees who work within a business in an entrepreneurial capacity, creating innovative new products and processes for the organization. Intrapreneurship is often associated with larger companies that have taken notice of the rise in entrepreneurial activity in recent years; these firms endeavor to create an environment wherein creative employees can pursue new ways of doing things and new product ideas within the context of the corporation.
Smaller firms can also instill a commitment to intrapreneurship within its workforce as well. In fact, small businesses, which originate as entrepreneurial venture, are often ideally suited to foster an intrapreneurial environment, since their owners have first-hand knowledge of the opportunities and perils that accompany new business initiatives. For larger companies, intrapreneuring is a way to recapture the spirit that put them on the road to success in the first place. For smaller companies, it can be a way of maintaining the entrepreneurial drive that gave them birth.
Intrapreneurship practices have developed in response to the modern world’s rapidly changing marketplace. While businesses of varying sizes have long had internal units for the development of new products, many found such arrangements were inadequate in today’s business environment, Creative young people chafed under corporate bureaucracies and frequently left to develop their ideas as entrepreneurs. Their former employers lost not only highly promising talent, but also a chance for profitable new lines. Intrapreneuring in its current form represents the determination of such employers to solve their particular brain drain problem. They are doing so by creating the environment – and providing the incentive – for entrepreneurship within their business operations.
Internal corporate “incubators” are one innovative example of this trend. In these programs, employees can use the company’s resources (including their established name and reputation, as well as management experience, financial assistance, and infrastructure) to build and promote their own business ideas. These and similar arrangements enable companies to stem the loss of ambitious and talented employees to entrepreneurial ventures. Entrepreneurial-minded employees, meanwhile, get the challenge – and the profits – of creating their own “companies” with little of the risk they would face on their own.
The single most important factor in establishing an “intrapreneur -friendly” organization is making sure that your employees are placed in an innovative working environment. Rigid and conservative organizational structures often have a stifling effect on intrapreurial efforts. Conservative firms are capable of operating at a high level of efficiency and profitability, but they generally do not providean environment that is conducive to intrapreneurial activity (and organizations that do not encourage creativity and leadership often alienate talented employees).
Companies that establish a culture of innovation through 1) formation of intrapreneurial teams and task forces, 2) recruitment of new staff with new ideas, 3) application of strategic plans that focus on achieving innovation, and 4) establishment of internal research and development programs are likely to see tangible results.
Other keys to instilling an intrapreneurial environment in your business include the following:
- Support from ownership and top management. This support should not only consist of passive approval of innovative ways of thinking. Ideally, it should also take the form of active support, such as can be seen in mentoring relationships. Indeed the small business owner’s own entrepreneurial experiences can be valuable to his firm’s intrapreneurial employees if he makes himself available to them.
- Recognition that the style of intrapreneurialism that is encouraged needs to be compatible with business operations and the organization’s overall culture.
- Make sure that communication systems within the company are strong so that intrapreneurs who have new ideas for products or processes can be heard.
- Intelligent allocation of resources to pursue intrapreneurial ideas.
- Reward Intrapreneurs. All in all, intrapreneurs tend to be creative, dedicated, and talented in a variety of areas. They are thus of significant value even to companies that do not feature particularly innovative environments. Their importance is heightened, then, to firms that do rely on intrapreneurial incentives for growth. Since they are such important resources, they should be rewarded accordingly (both if financial and emotional terms). For while intrapreneurs may not want to go into business themselves, they will still have a hunger to make use of their talents and a wish to be compensated for their contributions. If your business is unable or unwilling to provide sufficient rewards, then it should be prepared to lose that intrapreneur to another organization that can meet his/her desires for professional fulfillment.
- Allow intrapreneurs to follow through. Intrapreneurs who think of a new approach for process deserve to be allowed to maintain their involvement on the project, rather than have it be handed off to some other person of task force.
Ensuring that the individual stays involved with the initiative makes sense for several important reasons. The intrapreneur’s creativity and emotional investment in the project can be tremendously helpful in further developing the process or product for future use. Moreover, they usually possess the most knowledge and understanding of the various issues under consideration. Most importantly, however, the business enterprise should make sure that its talented and creative employees have continued input because not allowing them to do so can have a profoundly morale-bruising impact.