Intrapreneurship Definition – Characteristics of an Intrapreneur
Having recently written an article on the difference between entrepreneurship and intrapreneurship, I decided to look at intrapreneurship definition. This article has been researched and written by Russell Bowyer, who has been both an Intrapreneur and an entrepreneur himself.
Within this article, I will be looking at the following subheadings relating to the Intrapreneurship Definition:
- Characteristics and Elements of an Intrapreneur – What Defines an Intrapreneur?
- Why is Intrapreneurship Important?
- Advantages of Intrapreneurship From the Perspective of the Intrapreneur.
- Advantages of Intrapreneurship From the Perspective of the Company.
- Disadvantages of Intrapreneurship From the Perspective of the Intrapreneur.
- Disadvantages of Intrapreneurship From the Perspective of the Company.
- Examples of Intrapreneurs and Intrapreneurship.
- Examples of Intrapreneurship Companies That Encourage an Intrapreneurial Spirit.
- Insights into Intrapreneurship and Intrapreneurial Spirit.
1. Characteristics and Elements of an Intrapreneur – What Defines an Intrapreneur?
According to Wikipedia ‘Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization.‘
Intrapreneurs have many of the qualities and characteristics of an entrepreneur, which include:
By definition intrapreneurs have to have confidence. Many times intrapreneurs are swimming against the current ‘like a salmon swimming against the flow of a river.’ As leaders, intrepreneurs need to have enough self-confidence for management and staff to trust them and want to follow their lead. Successful intrapreneurs are like entrepreneurs and exude confidence. They’ll either be in-charge of a team of people or a whole section of a company. In both situations, self-confidence is a must have attribute.
Leading on from confidence or ‘Self-confidence’, entrepreneurs need to be self-starters to begin with. Having this quality will also make a good intraprenuer. It could be argued that intrapreneurs are not created by companies, but are simply given the environment to flourish. Intrapreneurs will show themselves up, and if they’re not given the right environment to grow, they’ll like more on or startup their own business.
Intrapreneurship Definition – The answer to growing and thriving business – Innovation within a company
Entrepreneurs have creative minds. They come up with new and better ways of doing things. ‘Thinking outside of the box‘ is the norm for entrepreneurs and is a trait carried by intrapreneurs too. In an intrapreneur’s world, it’s about not accepting things as they are, but instead it’s about finding another way to achieve the end goal either, cheaper, in a better way or faster.
To be a leader, having determination as a characteristic is an absolute must. Not allowing setbacks or negative views stop you achieving what it is you set out to do. Intrapreneurs have a stead-fast determination to succeed, and to succeed well.
Without passion, you couldn’t be either an entrepreneur or an intrapreneur. To carry anything through to the end to any degree of success, you must be passionate about your work.
2. Why is Intrapreneurship Important?
Intrapreneurship in important for a number of reasons. Top of the list of why intrapreneurship is important has got to be innovation. As already discussed, intrapreneurs are similar to entrepreneurs, except from an ownership of the business perspective.
Without innovation and creative thinking, companies would stand still. There are employees who have many of the attributes of an entrepreneur. They are intrapreneurs who want to contribute to the growth of a business. However, they are not cut-out to take on the ‘full-risk’ of business ownership.
Entrepreneurship is an incubator for future entrepreneurs. So rather than creating new business inside an organisation for the rest of their careers, they go on to create new businesses independently.
3. Advantages of Intrapreneurship From the Perspective of the Intrapreneur
There are many advantages of intrapreneurial spirit from a company perspective (see below). But what about the intrapreneur perspective? Being an entrepreneur carries with it excitement and the freedom to do whatever you want. However, this freedom can come at a cost.
One of the costs of being a business owner and an entrepreneur is the risk of failure. If the business fails, then the entrepreneur could potentially lose everything.
Whereas for an intrapreneur this is not the case. The high level risks of business ownership and the potential for loss of money is borne by the business owner, and not the intrapreneur. So one the advantages of intrapreneurship is to receive similar rewards of an entrepreneur, whilst not carrying the risk burden at the same time.
To a degree an intrapreneur can ‘switch-off’ when they leave the business, whereas most entrepreneurs cannot do this. Although, it is likely, with the intrapreneurial characteristics listed above, they will probably eat, sleep and dream about the business anyway.
Intrapreneurship Insight 4: Intrapreneurs know the rules and break them effectively (Deloitte Five Insights into Intrapreneurship (see below)
Major failures are not borne by the intrapreneur
Any major failures will be borne by the company. These would not fall on the shoulders of the intrapreneur. However, this could lead to dismissal, depending upon the type and reason for the failure. However, the loss would end there for the intrapreneur.
The intrapreneurs doesn’t have the worries associated with raising finance. They may get involved with helping the company to raise finance, but not have the associated stress.
You may have heard the story of a 1940’s IBM employee who made a mistake that cost the company about one million dollars. Knowing that he was about to be fired, the employee typed up his letter of resignation, and handed it to Watson. Watson responded: “Fire you? I’ve just invested one million dollars in your education, and you think I’m going to fire you?”
4. Advantages of Intrapreneurship From the Perspective of the Company.
There are many advantages to a company to have a person with intrapreneurial characteristics. Firstly, the company will have a person who eats, sleeps and dreams about the business. They’ll have the company running through their veins and the employee will go out of their way to make the company a success.
As intrapreneurs are passionate about what they do, the company will have a driven person to lead a section, department or the whole of the business.
The business owner will have an ally and a person to confide in. Intrepreneurship promotes sharing and trust, ultimately resulting in higher employee morale within the business. There’ll be more of an outside confidence in the business, which can lead to better financial backing.
88% of Fortune 500 companies in 1955 are no longer present in 2015. Some of which is through merger or acquisition, but most have gone bankrupt. So all companies should encourage innovation to maintain growth and profitability.
The business is more likely to be an overall success and have better than average growth. The business will be stronger against the competition and in a better position to protect against change.
Intrapreneurship Definition – innovation is key…
Ultimately, company’s that embrace intrapreneurship will thrive. Innovation is one of the life-bloods of business. Without innovation a company will die, an example of this is Kodak. Whereas, a company which embraces innovation and invention is Apple, but also the likes of Google and DreamWorks too (see below).
Encouraging intrapreneurs within the company and having employees who are happy to ‘stick their necks out‘ is key. Otherwise the employees get comfortable with past successes and the company will eventually go out of business.
There are many examples of this happening around the world, with the likes of Blockbuster and Woolworth. Just think about where Blockbuster could be today if its employees had been innovative and migrated its business across to business models like Netflix.
5. Disadvantages of Intrapreneurship From the Perspective of the Intrapreneur.
Whilst on the one hand an intrapreneur will be given plenty of independence and encourage to work on their own initiative, they will not enjoy the added benefits associated with business ownership.
They will be always be an employee of the business at the end of the day. They will ultimately have to answer to the business owner. So unlike an entrepreneur who has complete freedom, an intrapreneur will have certain boundaries to adhere to.
An intrapreneur is building his dream into another persons business. They are creating value and wealth for someone else to reap the biggest rewards. The only way in which an intrapreneur is going to have access to the spoils of business ownership, is to switch to being an entrepreneur.
All the innovative ideas and creative changes brought about by the intrapreneur, will ultimately be owned by the company and entrepreneur, and not the intrapreneur. Any patents for inventions or trademarks for ideas, will be owned by the business or the entrepreneur and not the intrapreneur.
This leads on well to the next point…
6. Disadvantages of Intrapreneurship From the Perspective of the Company.
There’s always the risk that a person with an intrapreneurial spirit may eventually want to set up their own business. They may ‘use’ your business to build their confidence and knowledge in their industry, for at some stage in the future to set up in competition.
‘Are intrapreneurs tomorrow’s competition? There is a fine line between encouraging intrapreneurial spirit and inspiring the next wave of entrepreneurs. How can business leaders retain intrapreneurs without stifling their ambition?’ Virgin.com
It will depend upon the person of course, and their aversion to risk. However, if they have the level of confidence and determination of an entrepreneur, they my well choose to go-it-alone.
The business will ultimately bear the cost of any failures, as a result of any projects that go wrong that are implemented by the intrapreneur. In the event of catastrophic failure, the intrapreneur can simply walk away, if they so wish.
7. Examples of Intrapreneurs and Intrapreneurship.
One example of successful intrapreneurship is someone like Indra Nooyi an innovative leader at PepsiCo. Indra is the current chairperson and Chief Executive officer of the Pepsi-Co. She has develop her own methods of leadership, coming up with the Five C’s of leadership.
A second example is Ken Kutaragi. Ken was nearly fire from Sony when they discovered that he’d been developing a digital chip dedicated solely to sound to improve the quality of Sony’s Nintendo game console.
After watching his daughter play, he was dismayed by the system’s primitive sound effects. It was only when CEO Norio Ohga realised the value of his innovation and encouraged Kutaragi’s efforts. In the end, Kutaragi worked with Nintendo to develop a CD-ROM-based Nintendo.
A true case of where intrapreneurship meets business success.
8. Examples of Intrapreneurship Companies That Encourage an Intrapreneurial Spirit
I’m going to make reference to two examples of intrapreneurs and intrapreneurship, which are ‘DreamWorks Intrapreneurship‘ and ‘Google Intrapreneurship‘.
i. DreamWorks intrapreneurship
Most of us have heard of DreamWorks, they are the creators of several Hollywood blockbuster movies. More recent films they’ve created include The Baby Boss and Trolls, with other famous favorites like Shrek and Madagascar too.
DreamWorks encourages all staff, which is regardless of their job title, to be a part of the film-making process. This is achieved through them sending in their own ideas.
At DreamWorks employees take free classes to learn how to pitch their ideas. They then pitch these ideas directly to executives.
ii. Google intrapreneurship
A second one of our examples of Intrapreneurship Companies is Google, have managed to formalise the role of the intrapreneur through official positions. Google have positions such as the Entrepreneur In Residence (EIR) or ‘Chief Innovation Officer‘.
Google’s Innovation Time Off intrapreneurship program empowers and encourages its staff to spend 20% of their work time on projects that interest them. Projects that employees think will benefit Google.
If a member of Google’s staff has a great idea, they don’t wait until it is cleared with a “boss.” But instead, a Google intrapreneur is empowered to take their idea to their fellow engineers.
The Entrepreneur in Residence program at Google encourages great ideas. These spread fast, it fosters constructive input and means that Google thrives.
9. Insights into Intrapreneurship and Intrapreneurial Spirit.
Here are Five Insights into Intrapreneurship and a Guide to Accelerating Innovation within Corporations pdf from Deloitte. Here is a taster of these insights:
Intrapreneurship Insight 1: Intrapreneurship describes a people-centric, bottom-up approach to developing radical innovations in-house.
Intrapreneurial Insight 2: Intrapreneurship pays off many times over in terms of company growth, culture, and talent.
Intrapreneur Insight 3: It’s not about creating intrapreneurs, it’s about finding and recognising them.
Intrapreneurship Insight 4: Intrapreneurs know the rules and break them effectively.
Intrapreneurship Insight 5: Intrapreneurship requires a different management approach.
To read about the difference and to understand intrapreneurship definition, plus the between entrepreneur and intrapreneur with examples my previous article on this subject is: here.
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