Innovation is the new obsession in business. In the first three months of 2012, more than 250 new books were released on Amazon.com with innovation in the title. The word innovation was used 33,528 times last year in SEC filings of annual and quarterly reports, up 64 percent from five years ago, according to Leslie Kwoh in a May 23 Wall Street Journal article titled “You Call That Innovation?” This new obsession is based on a sense of both opportunity and fear. Most business executives are watching the game-changing disruptions in their industries, but not enough pay attention to how the fundamental game of work is changing underfoot. There is disruptive thinking inside every workplace, led by a breed of intrapreneurs who expect work to satisfy their needs for innovation and accomplishment.
The digital age generated a media glut of role models of successful innovation — from Internet billionaires, to social entrepreneurs, to success stories on Kickstarter, a global funding platform for creative projects, to innovator Steve Jobs. These are the Cinderella stories of innovation, and they have inspired a whole generation to think differently about work.
As the millennials enter and dominate the workforce, their mental concepts about work, success and innovation are being shaped by the norms and ideas of these star entrepreneurs. Millennials, or Gen Y, demand meaningful work, socially responsible employers, and open and flexible workplaces that offer balance, choice and growth, according to the 2011 Deloitte Millennial Survey. At the same time, they may shun hierarchy, and prefer a peer-driven networked model that is often leaderless. The most gifted and talented of this demographic also want to lead breakthrough ideas, tackle society’s toughest challenges and change the world.
From this convergence of entrepreneurialism, corporate envy and anxiety, and shifting Gen Y attitudes, a whole generation of intrapreneurs is emerging. Driven partly by Gen Y’s maturing workforce needs, and partly by the need for organizations to reinvent themselves at a faster rate to remain competitive in this digital age, businesses need to take a closer look at “Gen I,” an emerging generation of intrapreneurs; they will be the most highly sought talent type in the coming decades.
Knowing how to cultivate and motivate the disruptive innovators within their midst will be a game-changer for most businesses. It starts with culture rather than strategy. Designing a culture of innovation means combining the acumen of the anthropologist with the skills of the business strategist. It requires leadership that is open to change, willing to lean into ambiguity and able to create an environment where great ideas can flourish.
Who Are Intrapreneurs?
Intrapreneurs think and act like entrepreneurs, but they do so within the context of an existing organization. Unlike entrepreneurs who garner wealth and media attention, intrapreneurs generally make dramatic contributions while keeping a lower profile. Lesser known are the great intrapreneurs in business history who drove 3M, Sony Playstation, Sun Microsystems and others. Journalist Jake Swearingen honored “Great Intrapreneurs in Business History” on a CBS News program in April 2008. This often-hidden talent is the brain trust that businesses today need to nurture to survive and compete.
Intrapreneurs exist in every organization, simply because great ideas and the “innovator’s DNA,” as author Clayton Christensen describes it, can be found in every individual. But to develop, hone and celebrate those attributes and strategically put them to use is what drives value creation. Intrapreneurs understand organizational constraints, yet they push against the status quo. Just as it is for their entrepreneurial counterparts, work is a form of play for intrapreneurs, a sandbox in which to exercise creativity, a stage for improvisation, a place to lead change.
In today’s market, where even established brands rise and fall faster than ever before — think Kodak and Blockbuster — new business models and new ways to engage customers are replacing proven business models. There is a greater-than-ever need to anticipate new customer needs, while leveraging new technology, new social norms, new products and new business models. Organizations need to deliberately consider how to compete for the best Gen I talent. Being adept at developing a culture of intrapreneurship may be the competitive differentiator for this century, the real game changer of work.
Working on Management Issues
Intrapreneurs can be a vital creative force to enter new markets, invent new products, strike new partnerships and test new marketing approaches, but it is not always easy for organizations to manage them.
Intrapreneurs become attached to their ideas and inventions. The same drive that motivates new discovery and new productization can manifest in ego, pride of ownership and sometimes lack of objectivity. Mixing intuition with fact-based observation and testing is the real engine of innovation.
Intrapreneurs can be disruptive. While their ideas and their affinity for experimentation have merit, intrapreneurs can be highly disruptive if the timing or culture fit is wrong. An organization needs to be at a point in its growth and evolution to seriously contemplate these new ideas. The culture needs to be open to change.
Supporting intrapreneurs can become a contest of wills. Some stakeholders may feel their agendas are undermined because people, energy and resources are diverted to support new, edgy ideas that may never materialize into viable revenue streams. This kind of political combativeness can cause new ideas to die under the weight of persuasion, unless intrapreneurs have a strong executive sponsor.
Intrapreneurs may invite conflict and mistrust. Sometimes the political combativeness originates from the intrapreneurs themselves. Arrogance can develop among intrapreneurs who are trying to make the dark side shine brighter, resulting in an us versus them mentality. Further, intrapreneurs sometimes view the “them” as people who “just don’t get it.”
The inherent conflict between those who get it and those who don’t usually results in mistrust. Without strong leadership and frequent communication to help everyone “get it,” relationships between intrapreneurs and the rest of the organization can quickly deteriorate.
Intrapreneurs can move too fast. In their zeal to get results, intrapreneurs may bypass the accepted diplomatic norms expected by key decision makers.
Without clear lines of authority and transparency to senior leaders, intrapreneurs may sometimes bear surprises that didn’t get socialized sufficiently with stakeholders. In the worst-case scenario, some decision or commitment made by the intrapreneur backfires. Internal stakeholders get upset and lose faith in the bigger picture. Worse, unanticipated conflicts in market offerings start cropping up.
The prevailing organization may not be able to keep up and adapt. Business-as-usual business processes can move too slowly to meet today’s market demands. Consider the case of Research in Motion (RIM), maker of the BlackBerry phone, where CEO Thorsten Heins shared what went wrong in a July interview with CIO magazine: “What I’ve learned in my discipline, in my 25 years in R&D and in telecom, once you have decided on a project, you must keep it stable. With our eagerness to be extremely innovative, we had the tendency to put new stuff into existing project programs, and that is not a recipe to deliver on time and on quality.”
New products sometimes require reinventing existing business processes. A culture may need to speed up or be redesigned from scratch to facilitate rapid invention and rapid failure, followed by rapid reinvention.
How to Lead Intrapreneurs
Getting intrapreneurs to co-exist successfully within an organization takes advance preparation. For organizations whose survival and competitiveness depend on being open to, or responding to change, being able to attract and retain Gen I talent enables them to play defense and offense in the game of disruptive innovations. Becoming known for having a culture of intrapreneurship can be a game-changer for a business.
1. Define decision power. Knowing who has decision power can help alleviate organizational angst about new initiatives. Being clear about decision authority will alleviate power struggles and align energy toward shared goals.
Many established businesses with entrenched decision-making processes may feel discomfort giving decision power to intrapreneurs. Agreeing on milestones to hear recommendations and new waves of investments can provide upper management with more opportunities to weigh in. The tradeoff is in speed and agility of execution.
2. Create a win-win culture. Intrapreneurship can unintentionally create a combative environment of win-lose. To cultivate intrapreneurship without combativeness, organizations should ensure there is open communication, clear lines of authority and clear assignments of responsibility. If there is a win-lose dynamic, leaders need to find ways to get everyone behind the same bets, and win over resistors within the organization to align the workforce’s competitive energy to face external competition.
3. Give everyone a stake in organizational success. The senior leaders’ job in driving innovation is to create excitement and clear a path for the new. Incentives need to be aligned to ensure all parties involved feel like they will benefit from innovation. Ken Zolot, founder of First Robotics and faculty member at MIT School of Engineering, said, “You have to create the cauldron where people come together to amplify ideas and to incrementally build on each other’s ideas. This is an environment where people can improvise and fail in controlled ways, without betting everything.”
4. Manage conflict. Especially for the stakeholders who may feel threatened by change, senior leaders need to be ready to step in to encourage collaboration and help resolve conflict. As Christensen writes in The Innovator’s Dilemma, innovation is the enemy of the status quo. One aims to destroy the present and create the future. The other depends on customers and stakeholders to deliver the present.
5. Celebrate both success and failure. “Celebrate failures for the right reasons,” Zolot said. “No one would think that dishonesty and laziness are worthy of celebration. Learning how to fail in incremental ways is a way of improvising and improving … and learning incrementally.” At the same time, create an environment that celebrates incremental innovation. Innovation is often overrated and overdramatized as game-changing. “But if you can inspire people to do just enough better in their current jobs, you can improve your business a lot,” he said. “Sometimes you don’t have to do something that radical. You can create change agents who can make small improvements.”
6. Make heroes of intrapreneurs. Praise them, recognize them, celebrate them as role models for an innovation culture. Encourage them to mentor others. Change requires a whole army of change agents.
Innovators have an insatiable need to learn. Frequently they improvise in their learning and problem-solving approaches. Len Schlesinger, president of Babson College, has studied entrepreneurs, and describes this as a means-based problem solving approach, something like a chef who looks inside a refrigerator or at a garden and sees what he’s got. They are willing to mix it up and see what happens.
To attract this generation of intrapreneurs, organizations need to design an innovation culture that values continuous learning, improvisation, experimentation, risk taking, failure and high work standards. By creating cauldrons that brew intrapreneurship, organizations will be able to stay relevant and competitive, and become exciting centers for innovation.
Wendy Wong is a member of the leadership team at The Ken Blanchard Cos., a global leadership training and development firm. She can be reached at firstname.lastname@example.org.
Attributes of Intrapreneurs
Intrapreneurs tend to fit these descriptions:
Passionate employees. Intrapreneurs are motivated by a desire to leave a mark and make a difference. They seek meaning in their work.
Learners. They constantly need new challenges. A retention strategy for intrapreneurs needs to include not only new learning opportunities, but new business problems to tackle.
Change agents. They work to render a change in the environment and conditions in which they work. As such, intrapreneurs challenge the status quo, just as innovation challenges the status quo.
Advocates. They seek to bring about a new order, methodology or vision. They are often able to sell and persuade, and to influence others to see their vision or worldview.
Collaborators. They know how to function effectively in teams, and incubate new ideas as part of a team. They’re usually not loners. They’re connected to a social peer group that is interested in innovation.