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Intrapreneurship and Internal Innovation

Written By: David Whitney

Organizations, both large and small, create marketplace opportunities by jumpstarting and accelerating innovation. To effectively and successfully commercialize innovations, organizations empower their employees to think and act like entrepreneurs. This practice — intrapreneurship — is found in successful organizations that understand the importance of having their teams’ rates of internal innovation exceed that of the global economy’s rate of external innovation.

An organization’s intrapreneurial effectiveness is rooted in its ability to solve problems — and to execute its strategic plan successfully. As my clients and students know, I am singularly focused on an organization’s ability — or inability — to solve problems. Successfully executing problem-solutions, and not just producing ideas, are what winning organizations do best. This is why industry-leading organizations initiate and implement programs centered on the theory and practice of intrapreneurship; their success is partially due to having teams operating entrepreneurially within the companies’ existing operational structures.

My eureka moment involving intrapreneurship occurred in October 2015. It was then that Dr. Kevin Desouza delivered a guest lecture for a course I taught on innovation. My students and I learned from Desouza that being an intrapreneur combines the stability and structure of working for a company with the challenge and opportunity of working on your own. During his talk, Desouza reminded us that there is no shortage of problems (internal and external) for an organization to solve; by unleashing entrepreneurs on the inside, organizations can accelerate the speed of how problems are identified and researched — and how quickly solutions are pursued and applied. His research and insights resulted in a terrific book, “Intrapreneurship: Managing Ideas Within Your Organization.”

I recommend this book to both present-day and future intrapreneurs. From the book’s description: “Based on Dr. Kevin Desouza’s research and experience consulting with thirty global organizations, Intrapreneurship outlines ways to mobilize all types of problem-solving ideas — including blockbusters with the potential to create radically new external products and services — along with producing more incremental innovations for improving internal processes and practices. With practical frameworks and real-life examples for leaders, managers, and employees, Intrapreneurship guides organizations on commercializing problem-solving ideas.”

The book contains plenty of lessons along with actionable guidance. The key lesson I learned from reading “Intrapreneurship” involved leadership’s responsibility to have platforms (or processes, or systems) where employees can identify problems and propose problem-solving solutions — regardless of what department they work in or whether or not the employees’ functional responsibilities align with the identified problem or the proposed solution. That is, leaders should enable, encourage and support intrapreneurship openly and widely throughout their organizations. Doing so instills operational cultures that leverage organizations’ competitive advantages while channeling creativity, collaboration and communication into creating and launching commercial products and/or services.

In “Intrapreneurship,” Desouza is spot-on in describing why leadership advocacy of intrapreneurship is so vital to organizational success: “Finding ways for employees to connect with others around a problem, and then enabling employees to showcase their proposed solutions (prototypes) in order to receive feedback, is how most organizations with intrapreneurial cultures build the capacity to repeatedly produce and commercialize successful innovations.”

I have practiced lessons learned from “Intrapreneurship” with organizations I work with as a business strategist. From those engagements, I collected and distilled the feedback from leaders and employees to produce a five-step framework that helps organizations enlist and deploy successful intrapreneurial teams. The framework supports organizational efforts to generate a rate of internal innovation that exceeds the global economy’s rate of external innovation.

Additionally, the framework helps organizations become more adept at identifying problems. Simultaneously, it helps intrapreneurs become more effective at designing, testing, improving and implementing (launching) commercially successful problem-solving products and/or services. And lastly, the framework allows for the growth and development of employees by teaching them how to create and use “tools” they can apply for years to come.

The five-step Intrapreneurship and Internal Innovation framework is as follows:

1. Be an Expert on Industry Trends and Marketplace Factors

Today’s global markets shift quickly, usually without warning. Competition is pervasive and evasive; new competitors surface overnight. Business models change instantly, and technology transforms market segments unexpectedly. That is why so much of what happens externally — often beyond organizational control — impacts how organizations react and respond.

These marketplace challenges are real and continue to grow increasingly complex. In order to rise up to these challenges, intrapreneurial teams — besides being commercialization engines — must accurately measure the pulse of the industry (micro) and gauge the global economy (macro) simultaneously if they wish to produce successful commercialization

outcomes. Once this practice is in place, a team’s primary responsibility is to create and launch products and/or services that accurately reflect solutions that align with customers’ correctly identified problems — while fulfilling the organization’s mission and purpose.

2. Operate Lean and Perform With Urgency

An intrapreneurial team that is resource-constrained relies on its creativity and ingenuity to succeed. Not being flush with resources promotes a sense of urgency and requires a certain degree of “hustle” by intrapreneurial team members. The quote “more companies die of indigestion than they do of starvation” is attributed to many business giants (Buffett, Gove, Packard, et.al) and serves as a reminder that a resource-constrained team can — and should — succeed on account of its creative confidence and sense of urgency.

Creativity and urgency are key contributors to intrapreneurial teams’ success. But, successful teams also need processes, procedures and systems in place to produce profitable products and/or services. This need is no different from how the rest of the organization should be structured operationally. However, intrapreneurial teams may be uniquely positioned in the organization; where they go for support and approval could be different from the normal “chain of command” that is found elsewhere in the organization.

3. Know the Needs of the Internal Audience and the External Customer

Intrapreneurial teams need to know who is championing their efforts internally. This knowledge — and the degree of support received from leadership — influences team performance. It can encompass how much support they receive from leadership and when new products and/or service offerings are approved internally as well as where products and/or services are introduced in the marketplace. Plus, a team’s level of understanding of its customers’ needs and wants (“What problem is being solved?”) is an important factor in determining a product and/or service’s degree of commercial success.

This key step serves as a litmus test for intrapreneurial teams’ effectiveness. My experience has been that intrapreneurial teams’ failure to have near-total understanding of customers’ problems are “flying blind” and fail to see their efforts produce commercial success. Therefore, don’t allow your organization’s intrapreneurial teams to liftoff and fly without a detailed flight plan!

4. Move Fast and Break Things

“Move fast and break things” is how a younger Facebook described its operating philosophy. I subscribe to this philosophy and encourage you to do so as well. For successful intrapreneurial teams, correctly identifying problems is followed by testing potential solutions quickly and cheaply. Building proof-of-concept — often described as Minimum Viable Product — solutions most often results in insightful user feedback. This feedback is used to pivot the proposed product or service in ways that better align it with customer needs and wants.

When moving fast, limit the screening and evaluation of prospective solutions. That is, don’t suffer “paralysis by analysis.” Instead, teams should create minimally functional products or services (e.g., build proofs of concept that are 25 percent functional) and continue to integrate prospective user feedback until the prototype rises in its functionality. The goal is to launch not when the product and/or service approaches perfection but when it is “good enough” to be used by prospective customers. Good enough, not perfection, is the goal.

5. Mitigate Marketplace Risks by Placing Small Bets

In building on step No. 4, intrapreneurial teams should take steps and leaps in entering the marketplace. Teams that spot trends, recognize patterns, intelligently hypothesize prospective solutions, test, iterate and pivot are improving the organization’s chances of commercial and financial success. Conversely, a “wait-and-see” intrapreneurial team’s insistence on getting it 100 percent right diminishes the team’s purpose and questions its existence in the organization.

The book “Little Bets: How Breakthrough Ideas Emerge from Small Discoveries” describes how making little bets is an effective tactic for commercializing innovations. The book’s author, Peter Sims, wrote an insightful and entertaining book on how to innovate problem-solving solutions successfully by deliberately experimenting with small, exploratory steps. By placing small bets, intrapreneurial teams reduce the risks of bringing new products and/or services to market.

When using this five-step framework, remember to account for your organization’s unique characteristics. Many larger organizations are structured differently than smaller organizations, so apply the framework in ways that best reflect your size and structure. Whatever the organization’s size and structure, this framework is a tool that leaders and team members can use to design, implement, support and improve intrapreneurial teams’ output.

And, please be patient. That is because intrapreneurial success does not occur overnight — or easily — so when success does occur, most organizations find their rates of internal innovation exceed that of the marketplace’s rate of external innovation. When internal rates are greater than external rates, organizations strengthen their stature in a global economy that rewards nimble, creative and innovative performance. This practice applies especially to those organizations most capable of recognizing — and adapting to — continuous change.

It is no secret that continuous change is today’s new normal. Navigating continuous change vexes most organizations, which is why industry-leading organizations turn to my friend and colleague John Spence for guidance on how to achieve business excellence by successfully addressing change. Spence’s expertise in this area is widely respected and admired. In 2017, Spence was recognized by Thinkers50, a London-based organization, for his work. Thinkers50 identifies, ranks and shares the leading management ideas of our age; the organization is known as the “Oscars of management consulting” and short-listed Spence in its ‘Breakthrough Ideas’ category.

I saw the connection between Spence’s insights on change and the increasing role intrapreneurship plays in organizations. When applied correctly, intrapreneurship produces internal rates of innovation that outweigh external ones. What results are more commercialized innovations along with greater degrees of organizational nimbleness and effectiveness, which are key for organizations seeking to overcome the challenges posed by a continuously changing global economy. According to Spence, “To be successful, the rate of internal innovation must exceed the rate of external innovation. In other words, you can’t simply embrace change — you have to be the one who creates and drives the change.”

I associate Spence’s insights on change with that of intrapreneurship’s contributions in today’s organizations. Effectively and successfully driving change — along with making an organization’s internal rate of innovation exceed that of the marketplace’s external rate of innovation — is what intrapreneurship is all about.


Author Bio: 

David Whitney writes about innovation and entrepreneurship and advises companies on all-things related to innovation and entrepreneurship. David is an international speaker and has taught courses on innovation and entrepreneurship in both college classrooms and corporate boardrooms around the world. Whitney is the Innovator-in-Residence at LeadingAgile Innovation Labs as well as serves as a business strategist at Advisory.Works. In these roles, David applies his operational experience and subject matter expertise when advising LeadingAgile’s and Advisory.Works’ clients and strategic partners. Whitney’s guidance helps companies achieve business excellence, commercialize innovations and attain operational breakthroughs by applying strategic planning techniques and implementing disciplined execution tools. Whitney works with companies of all sizes on how best to assemble and operate entrepreneurially-minded, innovation-oriented and profit-driven teams that repeatedly conceive, create, and launch commercially viable products and services.

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