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.Russell 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:
i. Has an entrepreneurial spirit…
Whilst an intrapreneur is not an entrepreneur, they still need to have entrepreneurial spirit. The definition of an entrepreneur is ‘The activity of setting up a business or businesses, taking on financial risks in the hope of profit, as per my article on the difference between entrepreneurship and intrapreneurship.
An intrapreneur will not usually own shares in the business (although many do), but this doesn’t distract them from the two key elements of entrepreneurship, which are ‘to setup up a business(es)’ and take on ‘financial risk.’ The ‘setting up’ of the business and the risks involved for an intrapreneur are not to the same extent as it is for an entrepreneur, but nevertheless the spirit is there.
ii. Is prepared to task risk for reward…
Whilst the level of risk for an entrepreneur is different to that of an intrapreneur, intrapreneurs still need to be prepared to take on more risk than the average employee of any business. The money that an intrapreneur is risking ultimately belongs to the entrepreneur, but the risk of failure is still huge.
iii. Has confidence and high self-esteem…
By definition entrepreneurs must have confidence. Many times entrepreneurs are swimming against the current. The same is true of intrapreneurs…to stand out and to be a leader, it is vital to be self assured.
‘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. Trust leads to ‘a following.’
They must be leaders. Successful intrapreneurs are like entrepreneurs who 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.
iv. Must be a self-starter…
Leading on from confidence or ‘Self-confidence’, like and entrepreneur,, intrapreneurs must be self-starters.
Arguably intrapreneurs are not created by companies, but are simply given the environment to flourish. Intrapreneurs will show up; given the right environment.
If they’re not given the right environment to grow, they’ll probably move to another company that has the right approach to intrapreneurship. Alternatively they’ll start their own business.
Intrapreneurship Definition – The answer to growing and thriving business – Innovation within a company
Related: Five successful people who failed – famous entrepreneurs who failed big before becoming a huge success and a household name.
v. To be creative and enjoy creating…
Entrepreneurs have creative minds. They find new and better ways of making things happen.
‘Thinking outside of the box‘ is the norm for entrepreneurs. This trait is held 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, faster or in a better way.
Innovation is what helps business to survive for the long-term. Without innovation and business development, a business will ultimately fail and die. To be innovative and to push the boundaries of whats the norm, it takes a creative mind and an open mind. These are key traits of both entrepreneurs and intrapreneurs alike.
vi. Determined with a commitment for innovation
To be a leader, having determination as a characteristic is an absolute must-have. In my article on the most important characteristics of an entrepreneur, determination and tenacity are two key traits of an entrepreneur. They don’t allow setbacks or negative views stop them from achieving what they set out to do.
vii. Be passionate about what they do…
Without passion, you couldn’t be an entrepreneur nor an intrapreneur. To carry any project through to its conclusion, to any degree of success, being passionate about the work you do is a vital ingredient to success.
In my article on the five keys to success for a business, passion is the first key I include. However, passion is not necessary only for success, it is the vital ingredient to the enjoyment and fulfilment of life.
2. Why is Intrapreneurship Important?
Intrapreneurship in important for a number of reasons.
Top of the list of why intrapreneurship is important has to be innovation. As already discussed, intrapreneurs are similar to entrepreneurs, excepting they don’t own the business.
Without innovation and creative thinking, companies would stand still. Employees who have many of the entrepreneur attributes, except for taking entrepreneurial risk, are more likely to be an intrapreneur instead.
They want to contribute to the growth of a business, but they’re not cut-out to take on the ‘full-risk’ of business ownership.
Entrapreneurship is an incubator for future entrepreneurs. So there comes a point when instead of creating a new business inside the organisation they work for, 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 from 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’s likely, with the typical intrapreneurial characteristics listed above, they’ll 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.
Intrapreneurs don’t have the same worries associated with raising finance. They may get involved with helping the company to raise finance, but will not have the associated stress.
You may have heard the story of a 1940’s IBM employee. In this instance a mistake made by the employee that cost the company around $1 million. Knowing that he was about to be fired, the employee typed his letter of resignation. He handed the letter 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. 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. This ultimately results 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.
Related: One of the most notable entrepreneurs failed spectacularly before he helped to change the automobile industry…Henry Ford
The business is more likely to be an overall success and have better than average growth. The business will be stronger against the competition. It will be 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. Also, the likes of Google and DreamWorks too (see below) embrace innovation.
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 fail and go out of business.
There are many examples of this happening around the world. The likes of Blockbuster and Woolworth are good examples. Just think about where Blockbuster could be today. If only its employees had been innovative and migrated the business across to the Netflix business model.
5. Disadvantages of Intrapreneurship From the Perspective of the Intrapreneur.
Whilst on the one hand an intrapreneur will be given plenty of independence. They’ll be encouraged to work on their own initiative. However, they’ll not enjoy the added benefits associated with business ownership.
They’ll always be an employee of the business. Unless they perform a management buy out like Jenny Campbell did at RBS.
Employees 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. Any patents for inventions or trademarks for their ideas, will be owned by the business or the entrepreneur and not the intrapreneur.
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. At some stage in the future to set up in competition.
This is something that happened to one of my past businesses. The circumstances weren’t too good for me, as the person concerned was stealing from the business. However, they acted as an Intrapreneur in the business despite the theft. After the long HR disciplinary battle, they left to setup their own business.
‘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
This situation will depend upon the person of course. Many times it revolves around their risk-aversion scale. However, if they have the confidence and determination of an entrepreneur, they’ll probably choose to go-it-alone.
For any projects that go wrong implemented by the intrapreneur, its the business that’ll ultimately bear the cost of any failures. 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. She defined the Five C’s of leadership.
A second example is Ken Kutaragi. Ken was nearly fired from Sony. When they discovered that he’d been developing a product without permission. This product was a digital chip dedicated solely to sound to improve the quality of Sony’s Nintendo game console, his bosses weren’t too happy.
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. These 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. They have 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 encouraged by asking employees to put forward 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. They 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. They are encouraged 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 difference between entrepreneur and intrapreneur with examples my previous article on this subject is: here.
The conclusion is that entrepreneur and intrapreneur go hand in hand…
For a business to become hugely successful there needs to be a link between entrepreneur and intrapreneur, like Yin and Yang. Entrepreneurs and intrapreneurs are interconnected and interdependent. They give rise to each other as they interrelate to one another.
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