If you haven't heard about intrapreneurship yet, it's essentially a large company going back to the garage, inventing the future from within.
Below are three reasons why intrapreneurship is a critical asset of any organization, serving long-term survival, sustainable growth, competitiveness and attractiveness.
Long-term Survival
Most of the large companies we know today will no longer exist as such, 20 years from now.
Industrial revolutions always precede Disruptions. The first industrial revolution (1765) used water and steam to mechanize production, the second (1870) used electric energy to create mass production and the third (1969) used electronics and information technology to automate production.
Only 12% of the Fortune 500 companies included in 1955 were still on the list in 2017. On the remaining 88%, there are bankruptcies, mergers, acquisitions, as well as companies that still exist, but are simply not part of the Fortune 500 anymore.
Today, the exponential evolution of digital technologies such as Big Data, Artificial Intelligence, Connectivity, Augmented Reality, Virtual Reality, Cloud Computing, Blockchain, Nanotechnology, Autonomous transport, 3D printing, Robotics, etc. is the fourth industrial revolution.
Going forward, the risk is very high for any large company around the world to face a “Kodak moment”, to be overtaken by new digital offers and end up with a business that dies out. Therefore, many large companies may already be on the verge of extinction without knowing it. The good news is those digital technologies, with their tremendous innovation power and exponential pace of change, open up huge opportunities for any business to reinvent itself.
In this context, there is a need for radical business innovation. There is a need to come out with that kind of innovation which has the power to change the rules of the game of the markets as we know them today — not only to meet today’s customer needs and ambitions, but certainly to meet tomorrow’s.
There is a need for intrapreneurship to create something new alongside the core business and reinvent things, as if it were Day One, leveraging collaboration in both ways, from the outside and the inside.
Sustainable Growth and Competitiveness
On the one hand, the structure of large companies is designed to generate growth and profitability through existing business lines. As a matter of fact, each of those lines has proven business models and is designed to deliver predictability — As consequence the natural bias is to put the business innovation focus on looking after exploiting proven business models, and generate the maximum level of growth and profitability from them overtime.
On the other hand, Radical business innovations have no revenue, no margins, no existing business line and no proven business models. One of the biggest obsessions is to figure out how to find them.
The “business as usual” management focuses mainly on current operations, putting the focus on developing an innovation that primarily think in the current “core-business-box”, while occasionally thinking in some adjacent ones — but not really explores uncharted territory of growth and competitive advantages implying to move forward in a very high degree of uncertainty while requiring to think out of the “core-business-box”. Hence, from a “business as usual” perspective, failure means damage.
Yet radical business innovation is a journey into the unknown where failure is the most critical prerequisite to success and where what we earn is what we learn.
Fundamentally, it is no secret: there is a conflict between what it takes to successfully guide a business that generates growth and profitability today, and what it takes to guide the invention of businesses that will generate tomorrow’s growth and profitability.
Guiding an existing business requires quite different skillset and mindset from those required to start a new business from scratch. Therefore, there is a need for Corporate Entrepreneurs — intrapreneurial leaders who have learned and practiced the required skillset through experience — intrapreneurial leaders who demonstrate not only a deep knowledge of the market and how to create new customer value, but also a sustained commitment to turning that knowledge into promising opportunities for long term growth.
No business model lasts forever — They all have an expiry date.
Benefiting from the sustainability provided by new growth and the resilience provided by new competitive advantages, is only made possible under the conditions to foster intrapreneurial behavior by better cultivating the multifaceted role that intrapreneurs can play to invent the businesses of the future. The benefits gathered along the way will help move towards the invention of radically new value creation that explores new growth levers opportunities, which may give birth to new line of business.
In other words, there is no quest for sustainable growth and profitability without questioning what makes today’s growth and profitability.
Attractiveness
It is no coincidence if leading digital-native companies such as Palantir, SpaceX, Microsoft, Alphabet, Amazon, Apple — all offering or about to offer solutions that will revolutionize many industries — are developing Intrapreneurship as a key pillar of their normal way of working which greatly contributes to their attractiveness towards the best talents around the world.
Being part of the world’s most attractive companies to work for and be a world-leading company outperforming the competition in all its markets are the two sides of the same coin.
To attract talents, whatever their age, their wishes, their background, their difference, their gender, their passport, it is necessary to go beyond just offering a job Monday to Friday from 9am to 6pm, to make a living. It is necessary to go even beyond just offering a fancy job-title, a status, a good salary and salary increase. Above all, it is all about being able to offer the chance to do something that matches passions, to be part of a team in which one finds a personal sense to one’s action, in which core values are carried in standard to guide decisions, in which one feels to be useful and in the service a great cause, a big ambition, at all levels of the organization. As Steve Jobs had told John Sculley that day:
“Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
Radical innovations are needed for a long-term survival of any organization as well as for sustainable growth and competitiveness, and the talents to carry out radical innovations need to work with organizations allowing them to do something that is meaningful — organizations where they can aspire to make a difference. They are the ones who are able to get the moon, going forward because of their passion, where others will stop because of their reason.
They need to be recognized as intrapreneurs, they need to be encouraged in their intrapreneurial approach, they need intrapreneurship type of career, and — as a matter of fact — that’s exactly what any organization need for succeeding in today’s digital economy and making the impossible, possible.
Building on the above, here are three factors to accelerate organization’s ability of “Exploring” new horizons while continuing the battle of “Exploiting” the existing business rules of the game.
Organization
The examples of intrapreneurial projects that emerged from initiatives such as call for internal startups, hackathons, etc. show the potential that can be drawn from Intrapreneurship for the benefit of any organizations.
However, beyond such internal contests, it is clear that intrapreneurial assets need to be managed.
As a matter of fact, the intrapreneurs, the people who feel the desire to undertake a project that comes from them to explore new things for the benefit of their organization, are often left to their own devices in many organizations. In that case, those people are not always identified for their ability as innovators.
They are struggling to find the right conditions to unleash their full potential. They have difficulties to get the support they need to overcome internal issues for running intrapreneurial projects.
We know the intrapreneurship strategy implemented by some digital leading companies, such as this one allowing its talents to devote 20% of their working time to research and personal projects. We know what Macintosh, Java, Post-It Notes, Amazon Drones, Amazon Web Services, Gmail, AdSense, Google Talk, the Facebook Like (originally called the “awesome button”) and the PlayStation, have in common.
Other than being innovative (and profitable), all those products and services were born of intrapreneurship. Rather than being launched by a “top-down decree”, all those products were, at least initially, conceived by employees. As a key success factor, their respective organizations (Apple, Sun Microsystems, 3M, Amazon, Google, Facebook, and Sony) recognized and encouraged their visions.
People not technologies are the company’s most critical innovation asset.
Needless to say, it is not about one people but groups of people working in the spirit that Steve Jobs was describing when he was talking about the Macintosh team, in the 80s and 90s (Newsweek article, September 30, 1985).
“A group of people going in essence back to the garage but in a large company”.
They need a company-wide support that institutionalizes the authorization to fail and fuels creativity by setting up process and policies that will formally support and reward intrapreneurship efforts, as part of the overall innovation framework defined and orchestrated across their organizations.
About "Exploiting" and "Exploring"
Basically, companies are successful in the present as soon as they are (becoming) really good when it comes to “Exploit” the current rules of the business game, which is all about: studying the market — trying to discover and understand existing markets — analyzing the competition — forecasting the future — setting strategies — defining goals and then finding the resources needed to accomplish them — sticking to the strategy — writing business plans — seeking to make decisions and choices based on an expected return on investment — selling to the customer — seeking to avoid surprises — focusing on analysis before action — determining the causes that will produce the best performance effects, etc.
However, because of the fourth industrial revolution we are living, the reasons for the past and present business successes will certainly not be the same in the future.
While it is obviously needed to continue to harness how to exploit the current rules of the business game, it is vital to be really good on how to “Explore” things for inventing new rules of business game, which is all about: creating new markets — experimenting in-market — striving for counter-intuitive partnerships opportunities (aka coopetition) — focusing on creating the future — co-creating with the customer — starting with the resources available and then define goals according to them — composing according to hazards — seeking to make decisions and choices on the basis of acceptable loss (return on loss!) — seeking to take advantage of surprises — focusing on action before analysis — determining the possible profitable business effects of given cause, etc.
Exploring — that’s what intrapreneurship is all about. That’s what intrapreneurs do.
The intrapreneurs’ mission
Beyond the business innovations organized at “business as usual” level, which naturally subscribe to the definition of the future that organizations plan and validate (aka the “Strategy”), there is also a need to get surprised by creating possible future. Those for which the only strategy is “Do Things”, and which could give rise to the invention of new business models for their future.
Beyond the approach of defining the expected results and the necessary budget to achieve this, there is also a need to make radical experiments in the field of business innovation, off the beaten path, whose expected results are not defined in advance, and that will allow them to explore the unknown and discover things that only explorers do.
Beyond process, built to leave nothing to chance and increase the level of certainty before any executive decision, there is also a need to leave room for chance and create the conditions in which the certainties are built by experimentation; there is a need to install a holding environment, providing appropriate supports to teams while allowing them to test, fail and learn, so that what seemed impossible can emerge.
Beyond the investment decisions based on the calculation of the return on investment, there is also a need to be equipped with something that give the freedom to make decisions based on an acceptable return on loss, in order to increase the volume of experiments and mistakes from which it is possible to seize the opportunity to learn faster.
Beyond the day-to-day recurring activities, the daily tasks of everyone there is also a need to offer to employees who wish it, the opportunity to be even more useful within and for their organization. There is a need to give everyone something that helps them discover the meaning of the next ten years of their life, and build a story they will be proud to tell their grandchildren.
In other words, there is a need to make a space for what seem uncontrollable, inconsistent, imprecise, unpredictable, to challenge the needs for control, consistency, accuracy, and predictability, that if we pay too little attention to it, will stifle big ideas, vocations, passions, motivations that only serve the interest of any organization for its future. In this lies the seed of unsuspected strengths and potential to address the biggest challenges of our time.
This is a guest post by Hamilton Mann, Group Director, Digital Marketing and Digital Transformation at Thales, and speaker at our upcoming Innov8rs Paris (10-12 April 2019). Check the full agenda via https://innov8rs.co/paris/speakers-sessions
