The word “entrepreneurship” is commonly used and often misinterpreted. The people who practice entrepreneurship — entrepreneurs — are frequently misunderstood and, alas, too often portrayed in pop culture as billionaires-in-training mining for digital gold in Silicon Valley. A more accurate definition of entrepreneurship involves a businessperson at a small- to medium-size company who toils away far afield of the media’s spotlight. That person — the entrepreneur-next-door — sacrifices much and works incessantly to satisfy customer demands, adapt business operations to ever-changing market conditions and meet payroll so company employees can support their families.
The term “intrapreneurship” — and the “intrapreneur” who practices it — refers to entrepreneurship performed inside a company. Usually, the company is a large(r), established one. In many circles, the term “corporate entrepreneurship” is used to describe intrapreneurship, though the term “internal entrepreneurship” is also common. The terms describe an intrapreneur, according to the American Heritage Dictionary, as “a person operating within a large corporation who takes direct responsibility for turning ideas into profitable finished products through assertive risk-taking and innovation.”
Intrapreneurship — and the intrapreneurs who practice it — has been alive and well for decades. Products like Post-it notes from 3M and a legendary business unit with the moniker “Skunk Works” at Lockheed Martin are well-known products and practitioners of intrapreneurial activity. In those organizations — and in millions more companies around the world — resources and support are provided to intrapreneurs so these dreamers can do what they do best: design, commercialize, and bring to market the products, processes and services that fuel the global innovation economy.
Regardless of an organization’s size, the potential for successful intrapreneurship can be found across the board. The key determinants of success depend on commitments by leadership, the design and implementation of a correct strategy, fulfilling the strategy’s objectives via disciplined execution, identifying the best-qualified people to perform the right jobs, and instilling an intrapreneurial spirit and culture throughout the organization.
Jim Collins’ book “Good to Great” comes to mind when I think about intrapreneurship. A key principle in “Good to Great,” according to Collins, is to “get the right people in the right seats on the bus.” In intrapreneurial activities, the right people must be in the right seats because in today’s global innovation economy, companies move forward by their success at tackling vexing problems, embracing new problem-solving solutions, and operating a culture where processes are enhanced, procedures are more efficient and customer value is improved. When entrepreneurship inside the organization is applied correctly, intrapreneurs’ contributions can advance the organization to the next level.
I am often asked about the differences between an entrepreneur and an intrapreneur. Besides the differences in their first syllables, the following are distinguishing characteristics — even ever so slightly — between entrepreneurs and intrapreneurs.
1. Organizational Environment and Performance Expectations
An entrepreneur is responsible for conceiving and operating a new company or nascent organization. Think of an entrepreneur as a person who seizes an opportunity to launch a ship with the goal of skippering it in a direction that is entirely new for the vessel and its crew. Oftentimes, the ship’s course is unknown, its crew untested and the vessel’s performance unknown.
The intrapreneur, on the other hand, works within an existing company or organization. That ship is already underway, so the intrapreneur’s objective is to improve the vessel’s performance. Although the ship has proven seaworthy, it is not performing at a level that matches or exceeds the captain’s expectations. Although not the captain of the ship, the intrapreneur contributes much input in how the ship is navigated — sometimes to the point where the ship’s course and its operating performance are drastically improved under the captain’s watch.
2. Corporate Culture
The degree of an organization’s success depends on whether or not its corporate culture is aligned with organizational goals. To succeed, any initiative undertaken should be actively supported and consistently promoted; the same holds true whether at an entrepreneurial venture or an intrapreneurial project. When it comes to innovation — as practiced in entrepreneurial or intrapreneurial environments — risk is always involved. In nearly all business situations, risk is never fully eliminated but instead is mitigated to a level deemed acceptable and profitable by organizational leadership.
A healthy organizational culture is one in which rewards are distributed in response to following practices aligned with the organization’s goals. A not-so-healthy culture results when punishments are doled out when operating goals are not achieved. Of course, many factors can contribute to why an organization’s culture is unhealthy. Conversely, a healthy organizational culture is often reflected by the practice of open communication combined with employees possessing a high degree of confidence when performing their jobs.
3. Risk
Both entrepreneurs and intrapreneurs face risks. Entrepreneurs invest time and money into launching and operating a new enterprise; many entrepreneurs work without pay — or receive compensation that is below their market value — and often find themselves constantly barraged by uncertainty. With little or no guarantee of positive (profitable) outcomes, uncertainty reigns. Intrapreneurs may not worry about if and how payroll will be met, yet they still experience risk by the nature of what they do: question the status quo, second-guess management, or recommend steering the organization in directions where potential outcomes are unknown and untested.
But, again, the intrapreneur is almost never responsible for the fate of a company. Not having that pressure is different than the pressure faced by an entrepreneur, who is usually faced with — at almost all stages in a company’s life cycle — keeping the company afloat at all times and under all conditions.
The results are encouraging. That’s because the entrepreneurial or intrapreneurial spirit — and innovation mindset — help to produce profitable innovation outcomes. The innovators’ mindset is driven by a vision in which they go “all in” to take their problem-solving solutions to market; to do so is not easy, as all innovations face hurdles getting to market. The hurdles exist both inside and outside the company — and can kill the most promising innovations; examples of how innovations die can involve the presence of employees driven solely by money, promotion or status. Also, innovation failures occur at the hands of employees who do not possess the grit to get a problem-solving idea to market; not all employees buy into the organizational goal. But, for those who do, the entrepreneur or intrapreneur with the determination and persistence to get innovations to market is one of the primary reasons why an organization’s innovation ecosystem succeeds — or fails.
A seminal book on the topic of intrapreneurship and intrapreneurs is as timely today as it was when released in 1985. The book “Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur” is authored by Gifford Pinchot III and Elizabeth Pinchot; I read it while in business school and maintain that the authors’ description of intrapreneurial characteristics are still true today. According to a section from the book, the characteristics of successful intrapreneurs include:
1. Adaptive
The ability to learn from mistakes. Intrapreneurs do this by adapting to situations in order to find solutions that meet the needs of the organization and/or its customers.
2. Creative
Ingenuity. Intrapreneurs bring creativity to the workplace and apply it to everyday situations.
3. Slightly Rebellious
The drive to practice innovation with passion and resolve. Achieving successful innovation outcomes is the goal, so having a rebellious spirit can make intrapreneurs strong and contribute to the quality and originality of their work.
4. Internally and Externally Focused
Intrapreneurs understand the needs of the company and its customers — and know how to go about fulfilling those needs. Intrapreneurs’ mastery of networking and effectiveness at communication helps them operate successfully, as does their ability to see the world through a myriad of lenses.
5. Self-Reliant
Intrapreneurs are leaders. Like successful and effective leaders, intrapreneurs trust their judgment and leverage their abilities. Possessing confidence and operating with autonomy allows them to convey and pursue problem-solving ideas — even the controversial and unpopular ones. Because intrapreneurs — according to their role in the organization — tend to disrupt the status quo, they are not always understood and/or appreciated.
6. Visionary
Advancing and bringing to market a problem-solving idea is one thing. But, quantifying its costs and benefits, understanding its short- and long-term implications, and successfully selling the solution both inside the organization and outside in the marketplace are the attributes of a successful intrapreneur.
Naturally, every new problem-solving solution has its share of detractors and doubters. That’s expected, especially in organizations where the status quo can be sacrosanct. So, why do intrapreneurs operating in intrapreneurial environments inside companies succeed? My observation of why and how the best intrapreneurs succeed:
- They will do anything — and everything! — to move a problem-solution forward. Doing anything and everything is not always appreciated by colleagues, so the best intrapreneurs seek forgiveness — but don’t ask for permission! If intrapreneurs go around asking for permission, they’ll get answers that affirm the status quo, which is not the goal. The intrapreneur’s goal is to disrupt the status quo.
- They come to work every day willing to be fired. That’s a difficult mindset to get used to, yet having this attitude means intrapreneurs can think clearly and operate with conviction in doing what they know is right — not what pleases or placates others.
- They operate “under the radar” for as long as they can. Most organizations sidetrack, if not outright kill, new ideas, simply because that is the way things are done. So, to navigate around this reality, intrapreneurs seek out internal champions who protect innovative advances; the best champions possess the power and position to prevent intrapreneurial output from being prematurely exposed inside the organization, potentially succumbing to a premature death.
In conclusion, companies with intrapreneurial cultures position themselves to win in an increasingly cutthroat global economy. Given innovation’s vital role in helping a company survive (and thrive), intrapreneurship can produce innovative technologies, introduce proprietary products, improve service offerings and implement better internal processes that increase a company’s survival rate. In many cases, being intrapreneurial is the difference-maker between success or failure — and survival or death — for organizations trying to succeed in the global economy’s increasingly unpredictable seas.
DAVID WHITNEY serves as the assistant director in the UF Engineering Innovation Institute. Whitney previously served as the Entrepreneur in Residence in the University of Florida’s Herbert Wertheim College of Engineering and teaches both undergraduate and graduate students in the college. The courses, Entrepreneurship for Engineers and Engineering Innovation, use real-world examples and the experiences of entrepreneurs, intrapreneurs and innovators to teach engineers how to change the world. In addition to his roles at UF, Whitney is the founding managing director of Energent Ventures, a Gainesvillebased investor in innovation-driven companies. Whitney is also co-chair of Innovation Gainesville 2.0, a regional-based initiative in which people and organizations collaborate to strengthen Gainesville’s innovation economy by bringing 3,500 jobs and securing $250 million in capital investment to the region.