If you are a decision maker or an influencer in an established corporate organization that faces the challenge of adapting to market changes, you will want to learn about intrapreneurship. It is the process of adopting an entrepreneurial point of view in the context of an existing or established business that intends to reinvent itself.
We still don’t see many successful examples of intrapreneurship, despite the buzz and the huge amount of interest it has attracted. I’ve worked with a growing organization in an established market as well as run startups in nascent markets.
Looking back over my experience, five key ingredients make a recipe for what not to do.
5. You and your team get salaries, administrative support, in-house expertise and a sales force that you can tap — go do your intrapreneurship thing
How many times have you heard of this? Do the existing incentive structures and resources help or hurt your objectives? Let’s peel away a layer of the onion here. Imagine your peers with a certain fixed salary and performance measures. They’ve been given their targets and have their bonuses and promotions linked to them. Now ask yourself — would this work if they were on a journey through unknown roads and destination? Is the incentive aligned to the real nature of that road and to taking risks?
When I was setting up my own venture, a mature incentive structure did not make sense. These very established structures work against us as they’re the product of evolution in response to a very different market. Standardization does not guarantee a process will work everywhere. In-house expertise or an existing sales force lull us into believing that all you need to do is create the product and everything else is available for reuse. Guess what? In-house expertise has its own challenges to deal with. The sales force that is used to selling an established product to an established customer has not crossed the sales learning curve for your product. Even if they have, they may not have the right incentive to close a sale.
Now, how do you do your intrapreneurship thing? What will help is to think of your efforts as that of an independent organization and grow from there.
Recommendation: Ask for isolation and freedom – in office space and incentives, build your own support and sales team. Rely on your own expertise and use the in-house expertise (if available) only to troubleshoot, not as a sounding board. Don’t conflate resources that can make or break the success of your initiative with reusable commodities such as office space, administrative staff and the Internet.
4. From the get-go, this needs to work on scale
Most entrepreneurs give the greatest priority to figuring out what customers will pay for. On the other hand, success patterns in a corporate career tempt the intrapreneur to build to perfection without first asking this most basic question. Steve Blank, a serial entrepreneur and lean startup coach encourages entrepreneurs to “get out of the building.” He couldn’t be more right. The intrapreneur too must get out of the building to go to the customer to learn real challenges before attempting to solve anything. He needs to repeat this several times with each release before he can successfully scale up.
Recommendation: Get the freedom and more importantly, time to get out of the building and talk to customers. You need these to iterate, calibrate and re-calibrate the product before it’s ready for scale.
3. I have a dire need for resources who can contribute to topline directly. Let’s move some from your team so we can deliver within the client’s deadline
15 years in an IT services setup ought to make me an authority on their priorities. Often, benched resources are the first to be committed to a new initiative. Are they the best fit? This question is conveniently ignored in the greater interest of not disrupting resources that are billed. It doesn’t stop there. After you’ve taken the pain of establishing your team and are making progress, Murphy’s Law kicks in and your best team members will get pulled out to ‘keep customers happy’. It’s not the organization’s fault – the decision makers are delivering on their KRAs.
Recommendation: When going on the intrapreneurship path, ask to assemble your own team either from in-house resources or by hiring afresh. Get approved budgets in place for such steps. Don’t leverage benched resources. This short term approach will hurt your entire initiative in the long run.
2. Follow established organizational processes. They work for us. They will work for you.
Large organizations function best on objective processes but that is not necessarily the case for a startup. Entrepreneurship is an art more than it is a science. “Aha I got this idea today, I implemented it over the weekend and I’m trying it out with the customers the next day.” Don’t shackle intrapreneurship with long-drawn, unwieldy processes if you want your initiative to ever see the light of day.
Recommendation: Set the expectation around existing organizational frameworks. Existing processes that work may be right for the current business but if you are trying to do something new or disruptive, it requires the evolution of its own framework.
1. Failure is not acceptable
This one is my favourite. It’s never spelt out explicitly in an established organization. You have goals, targets, tasks, KRAs, et al. You achieve them, you are good. You don’t, you get fired. Applying this in the context of intrapreneurship could be one of the biggest mistakes management can make. On the contrary, the message should be: Failure is expected. If you must fail, fail fast. This is true of entrepreneurship and the startup world has embraced it body, soul and mind. But where this should be embraced even more is in intrapreneurship. Why? The magnitude of failures and therefore the costs are high in an established organization. This is the fundamental reason why failure isn’t accepted. Changing leadership mindsets and empowering the intrapreneur to expect and adapt to failure are key to improvisation and agility.
Recommendation: Clearly set out the expectation that this may fail and if it does, there will be tremendous learning for the organization for improved chances of success as they embark on the path to change.