What is Innovation? Before Invention Product Technology Driven Internally Generated Engineering’s job After Commercialization Business Process & Business Model Value Proposition Integration of internal & external stuff Everyone’s job! 5
Definitions 6 What is Entrepreneurship? Two definitions spring to mind: 1. Entrepreneurship is the process of creating value by bringing together a unique package of resources to exploit an opportunity. 2. Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.
Intrapreneurship Intrapreneurship, which many still refer to as Corporate Entrepreneurship, comes from the idea of using entrepreneurial ideas, innovation and start- up business techniques within an large (or medium sized) organization. An intrapreneur is really an entrepreneur who has less risk in a venture. He also has much less control of when, or whether, the product will be launched. Being an intrapreneur takes a unique set of skills beyond creativity, including being willing to take some risks at sharing and pushing an unique idea, having the perseverance to wait for senior management’s approval to create and launch the product or service, and the drive to see it through to fruition, no matter what.
Why is Intrapreneurship important? Changing – dynamic business landscape Innovation as a corporate growth driver Organic growth Emerging Innovation business models Closed Innovation Open Innovation Challenge Driven Innovation Employee Retention & Growth – Opportunities 8
Today’s Operating Model… 95% of senior executives say that they doubt their companies have the right operating model (of which structure is a key component) for today’s world. - Accenture Study, 2011 9
Innovation – Giving Rise to the Intrapreneurial Opportunites… In-house entrepreneurs, -- those "dreamers who -- can increase the speed and cost-effectiveness of technology transfer from R&D to the marketplace. Situation 1: In a situation where a firm needs to develop new technology and there exist high levels of internal management support for innovation, an individual with high levels of risk-taking propensity will be more likely to engage in intrapreneurial activity. Situation 2: In a situation where there is a substantial change in management (structure or style) which provides enhanced rewards for innovative behavior reinforcements, individuals with high need for achievement will be more likely to engage in intrapreneurial behavior. Situation 3: If a firm is forced to reduce costs due to environmental changes, and the firm has created a workplace characterized by high levels of work discretion, individuals with a desire for autonomy will be likely to engage in intrapreneurial activity.
The Intrapreneur’s Skill Sets Team-building skills Business & Marketplace reality Ability to make rapid decisions in the absence of adequate data Must be comfortable acting without much guidance from above Be a leader Execute – Execute – Execute
The Roles In A Business Life Cycle The New Corporate Venture The New Corporate Venture Source: Intrapreneuring by Gifford Pinchot III
Challenges to be Expected A successful Intrapreneurship program requires an intrapreneur to be able to overcome the formal organizational structure, internal roadblocks, and deal with the organization’s slow moving bureaucracy. The Corporate Entrepreneur will need to be able to convince both their organization’s middle and senior management that a new creative idea or service has strong market, and would be profitable for the organization, and also synergistic to the organization’s basic mission. To be a successful intrapreneur takes much more than just creativity or an idea. The successful intrapreneur has to be willing to take real risks at sharing and pushing an unique idea. Intrapreneurs may have to be patient and have wait for their organization’s senior management’s final approval to create and launch a product or to create a new service, and they must be willing to push- wait-push-wait and never quit. However, if the effort is developing a product or service that competes with the existing bread-and-butter business of the company, the effort could be seen as a threat to many inside the company.
Key Success Factors Executive Sponsorship (Div/Grp/Corp) Alignment with the core business Assess the products to be produced (disruptive +30% chance of success; while a slight better product against an incumbent has only a 3% chance of success 14
Intrapreneurship Notable Successes Intrapreneurship has been called the secret weapon for success used by 3M, GE, Lockheed, Prime Computer, Toyota, Sony, Rubbermaid, United Artists/TeleCommunications Inc., and many other successful corporations! Effective Intrapreneurship or Corporate Entrepreneurship programs are essential to survival in the business world and through tough economic conditions.
The most successful Intrapreneur Steve Jobs, Apple’s Chairman …specifically helped in popularizing the term “intrapreneurship.” Job’s, in a September 30, 1985 “Newsweek” article, in which he said, “The Macintosh team was what is commonly known as intrapreneurship… a group of people going, in essence, back to the garage, but in a large company.” TIME magazine also in 1985 published an article entitled “Here Come the Entrepreneurs.” The management consultant Gifford Pinchot III used the term intrapreneuring in his book “Intrapreneuring” which was published in 1985.
Success for today’s students… Entrepreneurship as chief career interest… University of Michigan graduates work as employees for seven to ten years before starting their own business. Entrepreneurship programs are excellent for preparing future Intrapreneurs!
Resources Fry, A. (1987). The Post-it-Note: An intrapreneurial success. SAM Advanced Management Journal, Summer, 4-9. Kanter, R. M. (1988). How to be an entrepreneur without leaving your company. Working Woman, November, 44-47. Kuratko, D. F., Sabatine, F. J., & Montagno, R. V. (1987). Intrapreneurship and innovation in the corporation: An introductory guide. Muncie, IN: Ball State University Press. Pinchott, G. (1985). Intrapreneuring. New York: Harper & Row. Quinn, J. B. (1985). Managing innovation: Controlled chaos. Harvard Business Review, May-June, 73-84. Sathe, V. (1985). Managing an entrepreneurial dilemma: Nurturing entrepreneurship and control in large corporations. In B. A. Kirchhoff, W. A. Long, W. E. McMullan, K. H. Vesper, W. E. Wetzel, Jr. (Eds)., Frontiers of entrepreneurship research, pp. 636-656. Wellesley, MA: Babson College. Von Hippel, E. (1977). Successful and failing internal corporate ventures: An empirical analysis. Industrial Marketing Management, 6, 163-174.