Today’s companies are under pressure to become more "intrapreneurial," or dedicated to using entrepreneurial strategies within the context of an organization. However, not all cultures can make it work, and you should understand what’s really essential if you want to go down this path.
Intrapreneurship was first defined in 1978 by Gifford and Elizabeth Pinchot and referred to free market entrepreneurship within the corporate organization. Lately, however, this practice has become a critical means for companies of all sizes to ignite innovation within their ranks and leapfrog ahead of the competition.
According to consulting firm Ernst & Young’s article on intrapreneurship, there are two cultural factors necessary for an intrapreneurship initiative to get off the ground: encouragement and support from senior management and reassurance that even when ideas fail, intrapreneurs will not lose their jobs or be punished in other ways.
This is easier said than done. After all, the post-recession business climate is a risk-averse one. Senior managers’ priority is to keep the organization afloat, sometimes at the expense of driving new growth. Intrapreneurship sounds good written down, but when the time comes to actively implement it, many executives are understandably squeamish.
One Step at a Time
Some conglomerates are championing the concept anyway. On Fast Company’s co.exist blog, Jennifer Silberman, the vice president of corporate responsibility at Hilton, says her company’s intrapreneurial efforts mostly reside in corporate responsibility (CR) for now.
Silberman claims that some of Hilton’s most significant accomplishments of late, including LightStay (which calculates a hotel’s environmental impact), were developed as a result of intrapreneurship. “Employees identified the opportunity to create a new product to track the sustainability footprint of our properties,” she says. “This tool was rolled out across the enterprise and has not only resulted in reduced energy, water use, waste and carbon outputs, but also has generated over $147 million in cost savings.”
Silberman rightly argues that securing buy-in for projects is the most difficult task intrapreneurs face, even in companies that allegedly support the concept. To make this easier, Hilton has established a global CR Council composed of senior leaders that represent all key business functions. The council’s sole task is to evaluate and support promising innovations, which are then tested to determine large-scale viability.
Hilton clearly understands the value of a good idea from the top down, but there are a few other must-dos for a small business that wishes to sustain intrapreneurship. Among them:
Institutionalize intrapreneurship: Do it like Google: Assign a specific amount of time for employees to work on creative projects and develop a process through which promising ideas can be vetted.
Share responsibility: As the ones in the trenches, your employees know what the market needs. From the initial interview on, encourage them to come up with ideas and pinpoint opportunities and give them the right tools to stay on the cutting edge.
Reward contributions: An absence of negative consequences isn’t enough. You want to incentivize your people to innovate. Give them face time with senior leaders and greater exposure in the organization as a whole.
Committed support of intrapreneurship no doubt requires a cultural shift for many organizations, so make it less daunting by starting, as Hilton did, with one group—and watch the effects radiate outward.
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