Intrapreneurship: Fuel for Economic Recovery
By Brian D. Goodman
Entrepreneurs and small businesses throughout the U.S. are helping to spark economic recovery through innovation. Corporate America must now play its role in creating a generation of intrapreneurs, or entrepreneurs within large companies, to add further fuel to not only economic resurgence, but our nation’s long-term competitiveness. While corporate earnings are beginning to rise, the improvement in quarterly financials at far too many multi-billion-dollar companies has been primarily a function of reduced expenses from slashed headcount and overhead – including research and development (R&D). Unfortunately, many of these “positive” earnings reports are not a function of intrapreneurship. During the recession, employees at many larger and mid-sized entities adopted a “keep your head down, take no risk” mentality and employers rewarded this behavior. Now that the recession is turning, this mindset must be altered if the economic recovery is to gain steam. Boards and C-suites must foster and reward intrapreneurship to cultivate innovation and economic sustainability.
According to the Small Business Administration, entrepreneurial innovation continues to play a significant role in the nation’s economic competitiveness in a global marketplace. A recent advocacy study by J. Isom and David R. Jarczyk took a look at the patent activity of small businesses and analyzed how employee headcount, sales, and R&D expenditures affect the drivers of innovation. What is startling is the lack of understanding of this corollary at the top of many of America’s corporations. Pressured by institutional shareholders or private equity owners to meet quarterly numbers, management may unwittingly short-change innovation and cut-off opportunities to create new revenue streams and hence, intrapreneurial ideas. Nevertheless, there are steps both management and individuals working within large or mid-sized companies can do to change this course and ignite intrapreneurialism. These corporate management transformations can include the following:
- Starting with the CEO, the concept and culture of intrapreneurialism should be officially introduced – or reintroduced – as a priority within the company. With clear and consistent internal communications, senior management must incite and inspire its employees to break through barriers, take chances and question and create what customers want in the future. These messages must cascade throughout the organization so that all layers of management sincerely embrace and reward this behavior.
- Make organizational changes to facilitate intrapreneurship. Whether it is appointing a Chief Intrapreneur Officer or an Intrapreneurship committee with representatives across the company, employees must not only hear, but see that things are different within their organizations.
- Publicly and financially reward intrapreneurialism. Recognition must go to those who take chances and embody the spirit of intrapreneurship. Management must acknowledge and commend these individuals, whether their efforts result in enormous or minor successes.
- Invest in intrapreneurialism. Beyond the internal pronouncements, employees will only welcome intrapreneurialism into their daily routines if management invests time, energy and resources in the processes. This may entail the creation of intrapreneurship pods, the institutionalization of intrapreneurial training, or simply the allocation of additional research and development funds, but it must be tangible and significant. Boards must support these efforts.
For employees within these organizations, the path to intrapreneurship may include bold leaps for the aspiring brave new leaders and small steps for the pack:
- Volunteer to be a part of the intrapreneurial steering committee. Whether the employee serves as head of the committee or as secretary, it is important to get involved early on.
- Stay close to customers and engage them in discussions about the future. Understand what drives their decisions and listen to their needs. Consider conducting additional market research or survey groups focused on future needs. Discuss these findings with team members and use this as a spark for intrapreneurialism.
- Form broad relationships within and outside the organization. Take time each week to have breakfast, lunch or coffee with colleagues from different departments, service providers, and others in the industry and use professional social media (e.g., LinkedIn, XING) to keep these relationships strong. This will ensure that employees are connected and knowledgeable in various aspects of the business and are building the alliances and support to succeed in intrapreneurial ventures.
Corporations can be poised to contribute vitally to fueling economic recovery through intrapreneurship, with a powerful voice at the top advocating for ideas and innovation, concrete changes in place, and employees motivated to step out of their safety zone. At the same time, these companies can take their rightful place next to entrepreneurial small businesses in playing a critical role in global competitiveness.