Despite intrapreneurship becoming a more viable innovation strategy, 90% of intrapreneurship programs fail to deliver the hoped-for results.
According to intrapreneurship program design expert Jan Kennedy, it’s time we get serious about making these programs work. As CEO at the Academy for Corporate Entrepreneurship (AfCE), he helps Fortune 500 companies design and implement programs to cover various stages of the innovation process. And as Director at the Founder Institute, the world’s largest mentoring program for early stage entrepreneurs, he helps launch over 1,000 companies per year.
At Innov8rs Singapore, Jan shared how his programs have evolved over that time and identified the critical factors that increase their ROI - what he calls the “steroids” that help you become more rigorous in your approach and double the impact of your intrapreneurship program.
Here's his talk, and an overview of the 5 super steroids that will help you scale your program for best results.
Steroid 1: Structure
To build new business models or have faster product launches, we have to get more ideas into the launch and scale part of the innovation cycle; and, to get there, we need strong ideation and incubation phases. But while companies have these phases, there seems to be a big gap somewhere along the way.
“People doing ideation tended to complain that ideas were not getting off the ground and progressing to the next stage. We also saw a lot of investment into labs and incubators to develop select ideas, but the people running them complained that the ideas lacked validation so few products got launched.
There was this massive gap in the middle which people seemed to have forgotten about. Nothing was connecting ideation to incubation! The discovery phase, where you explore and test new ideas to see if they are viable, was either missing or not executed very well.”
Effective intrapreneurship programs are designed so that ideation leads to discovery, and discovery leads to incubation. After taking the Structure Steroid, Bayer, for example, attracted 120 ideas from applicants and sent 25 through to the 3-month discovery phase. 11 of those ideas were deemed to be solving a real problem for a real customer in a viable way, and were selected for incubation.
Jan recommends you think of the process as a funnel, and target specific metrics: a 30% conversion of projects from discovery to incubation is a good starting goal, and this can easily grow to 60-70% conversion and boost your program’s ROI by 25%.
Steroid 2: People First, Ideas Second
Many companies open up their intrapreneurship programs to all employees. LaPost in France, for instance, invited mail carriers to get involved in the ideation process. While this democratic approach is appealing, Jan says it’s not generally effective.
“We often select intrapreneurs based on who submitted the idea, which is why I hear quotes like this all the time: ‘We’re only receiving incremental ideas! Our people don’t have the right mindset! They aren’t engaged enough!’
Just as we know that most CEOs have a particular personality profile, successful entrepreneurs and intrapreneurs tend to share common personality traits. We need to select for those traits.”
When you take the People First, Ideas Second steroid, you create a filter to identify and select people who are more likely to be strong intrapreneurs. Some indicators include high adaptability, ease of building strategic relationships, and a natural ability to analyze data. Once you identify these people and bring them together in teams, you’re ready to focus on which ideas to pursue.
With this filter in place, Germany’s Klüber Lubrication was able to identify 54.6% of their program applicants as being a good fit; Switzerland’s Migros identified 37.6%; and insurance company Allianz identified 26.9%. Without a filter in place, anywhere from 50%-75% of participants in these programs would have been a poor fit for intrapreneurship. But seniority has an impact too.
“We’ve seen that often, the more senior they are the less of a fit they are. This was very evident within Allianz, where the program targeted their own ‘High Potentials’ for COO positions. In fact, for the first program which we tested retrospectively, only 11.6% were a strong fit. This realization helped them rethink how they identify high potentials for leadership positions.”
Programs that run with this steroid in place, according to Jan, see a 30%-40% positive increase in team performance - so that’s an easy ROI boost.
Steroid 3: Lonely Planet
Once you identify the right people and put them into action, you’re set...right? Not quite. Usually, these people have not launched new businesses or even new products before, so some training is necessary.
Companies often rely on things like business model canvas workshops, expert talks, and moving to a co-working space. While these can be great at various points along the way, they don’t provide the ongoing guidance and support intrapreneurs need. This is when Jan says you need the Lonely Planet steroid.
“When you’re going on a long voyage of discovery, it helps to have a guidebook - like a Lonely Planet guide.”
Jan has found that intrapreneurs achieve strong results with about ten hours per week of step-by-step guidance, and it is especially critical during the discovery and incubation Phases.
Ideally this guidance includes tutorials that teach relevant theory, and assignments and frameworks that help intrapreneurs apply the theory to their own idea and give rise to critical assumptions that need to be tested. It’s also crucial to give intrapreneurs ongoing access, via weekly calls and slack or whatsapp, to multiple external mentors who can help them interpret their assumptions and set up lean experiments.
This steroid can easily add another 25% to your ROI - which means choosing the right guidebook or training is key.
When Bayer sought help from external agencies, they invited 40 agencies to send in a proposal and selected 20 to pitch. Eight were awarded intrapreneurship teams to work with over a three month Discovery Phase and, at the end, two agencies were selected to help refine and grow the entire program moving forward.
Steroid 4: Slush Fund
The Slush Fund steroid is exactly what it sounds like: money set aside to support your intrapreneurship teams. This is often only addressed during the incubation phase, but Jan has found it vital during the discovery phase as well. When intrapreneurship teams have the resources to bring on designers, developers, marketers and project managers, they are able to create and execute experiments much quicker - pretotyping - and collect real customer data.
“Since we introduced this steroid as standard the quality of final pitches, and therefore projects getting into incubation, increased by 30-50%. So this is easily another 30% ROI boost for your teams.”
Steroid 5: Scalability
Once your program is up and running, the challenge becomes keeping it alive. It needs to expand and diversify across the organization - only then does it become part of the business strategy and contribute to a culture of innovation.
That’s where the Scalability steroid comes into play. Most programs are not designed to scale. The people involved go back to their day jobs, and are not utilized to help the program grow. Instead, this steroid provides a Train The Trainer approach where intrapreneurs, based on their performance, are trained to take over mentoring roles and eventually run the program. Based on evaluating engagement, mindset and attendance during the discovery phase, Jan has seen around 25%-50% of participants could go on to become coaches if given more training.
“To be able to show others, you must have first done it yourself. So, this approach should not be confused with simply training certain managers on what to do and then hoping they can go and do it. That’s a short-cut and it rarely works. The best mentors are people who have already been successful intrapreneurs.”
According to Jan, it’s also vital to train senior leaders.
“Only 10-15% of senior leaders 'get it', so asking them to evaluate pitches and make incubation funding decisions is not effective. I've seen about 40% of the funding decisions made are questionable, biased, not based on what the team achieved. Often, people are playing internal politics to get the idea they like moving forward.” Senior leaders need training around innovation accounting and KPIs so they judge based on merit, and around frameworks so they can help build a self-sustaining innovation ecosystem.
Jan has seen the results of the Scalability steroid first-hand. When he started working with Allianz in 2015, they developed a high potential program geared to future COOs. While they got better and better results as they went on, they program was always limited to four teams - as Jan put it, “They never swallowed the scalability pill, so they ended up doing the same thing every year. They get a result, people are happy, but they're not expanding into other departments and creating a culture of innovation”
Bayer, on the other hand, swallowed the Scalability steroid from day one. “After the first program they doubled its size, and trained the top performers to mentor the next cohort. They got support from the board level to create an ecosystem elsewhere in the business. This year, they are developing 48 teams of pure intrapreneurs, and a hybrid program that will help them go to 250 teams - and have a much bigger impact.”
Whether you’ve been running intrapreneurship programs for awhile or are just getting started, any one of these steroids can double your ROI. But, as Jan reminds us, steroids often give the best results when you combine them into a cocktail. Only 8% of ideas from a typical startup weekend survive; with his five steroids, Jan sees a survival rate of 72%.
“I don’t usually advocate taking steroids,” Jan says, “but in this case, they’re a healthy advantage.”
