Fostering Intrapreneurial Ideas
"Intrapreneur" is the name given to employees who come up with their own ideas and then bring those ideas to life with the assistance and resources offered by their employers. (Intrapreneurs can also be found in service industries, creating innovations that draw customers away from the competition.)
Large corporations like General Motors, IBM. General Mills, and AT&T have reaped the rewards of intrapreneurial employees. However, business owners at companies of all sizes can benefit from their own intrapreneurs. This discussion will help you discover who your intrapreneurial employees are and how you can encourage, shape and mold their creativity. The discussion also focused on how to establish the lines of responsibility for intrapreneurial employees and their projects, as well as examining some of the potential drawbacks. By the time you finish this article, you should have a wealth of ideas about how to develop an intrapreneurial spirit within your organization.
- The Value of Fostering Intrapreneurial Employees
- How to Identify Intrapreneurial Employees
- Ways to Encourage Employees to Pursue Ideas
- Criteria for Choosing Which Ideas to Implement
- How to Establish Lines of Responsibility
- Drawbacks and Cautions
I. The Value of Fostering Intrapreneurial Employees
Why is it important to foster intrapreneurial employees? Intrapreneurs can provide a fantastic boost to your company's bottom line. Not only do innovations add to your revenue stream, they also increase motivation and empowerment among your intrapreneurial employees.
Intrapreneurial employees are typically energetic and enthusiastic, imaginative and inventive. Most likely, they already have ideas for creating new products or services. Perhaps they're even working on developing their ideas in their off-work hours. So why not provide them the encouragement, resources and manpower? If you don't, they may move on to another company, or they may start their own and become one of your competitors taking customers and business away from you!
Intrapreneurial environments also promote expansion. You are only one person, trying to do a hundred different things all at once. When you look at the scope of your day, how much time and energy do you have left over to devote to creating new products and services that could help your company grow? The likely answer is, very little. As the old saying goes, two brains are better than one. So, wouldn't it make sense to utilize all of the brain power that you are already paying for? Yes, fostering intrapreneurial employees means taking chances, but these chances can pay off big. In fact, the Ford Mustang, IBM's personal computer and Kenner Toys' "Star Wars line" were all forged by intrapreneurs working for other people.
Another example of the value of intrapreneurship is the genesis of Post-It Notes®. In 1974, a 3M Corporation employee couldn't keep his hymns marked properly in his church choir book. After attempting various methods, he decided he'd try using some non-permanent adhesive that was available at his workplace. By placing this adhesive on the back of his markers, he found he could keep them secured in place and then easily peel them off when he was done.
The man took his new discovery to the management at 3M, a company that encourages employees to spend no less than 15 percent of their time at work developing their own ideas and projects. With the company's support, the resourceful man researched and developed a new product. Twenty-five years later, Post-It Notes® continue to be one of 3M's top-grossing products.
You don't have to own a large corporation to foster intrapreneurship. All you need is the ability to encourage employees to develop new ideas, and then give them the time, space and resources needed to turn those ideas into reality. You may think you already encourage your employees to be innovative, but the question is, do you do it in a formal way? The following questions can help you determine whether you are indeed currently fostering an intrapreneurial environment at your company:
- Do I have a clear view of my company's future goals? If so, how have I expressed these goals to my employees? _______________________________________________________________________________
- Have I set ground rules for an intrapreneurial environment? What are they? _______________________________________________________________________________
- Have I established a clear system that encourages my employees to be innovative and creative? How does it work? _______________________________________________________________________________
- Do I encourage my employees to spend at least 15 percent of their time at work creating new products or services? _______________________________________________________________________________
- Have I earmarked funds specifically for developing ideas proposed by employees? What percentage of my company's overall budget is dedicated for this purpose? _______________________________________________________________________________
- When employees come to me with sound ideas, do I take immediate action to get these ideas up and running, or do they tend to get lost in company policy and red tape? _______________________________________________________________________________
Back to Outline
II. How to Identify Intrapreneurial Employees
You can't assign someone the job of being an intrapreneur. Either someone is an intrapreneur or they aren't. How do you find the potential intrapreneurs in your company? Unfortunately, there is no clear-cut profile that helps identify them, but many do share similar personality traits. They tend to be highly motivated people who can work on their own with little supervision. They are highly dedicated and creative, with clear visions about how to help the company. Generally speaking, intrapreneurs aren't status seekers they are usually willing to jump in and roll up their sleeves in any situation to get the work done. They are extremely goal oriented doers, not talkers. Perhaps most importantly, they won't take "no" for an answer.
A perfect example is the employee from 3M. Here was an intrapreneur who faced many obstacles, yet found a way to persevere. Once he developed the Post-It Notes®, the company's marketing division told him that customers would not be interested in his product. The manufacturing department was equally pessimistic, claiming the product was just too difficult to produce. So the employee worked out the manufacturing bugs himself, even though this was not his area of expertise. Now, Post-It Notes® can be found on almost every desk in America.
- The employees who are self-starters are: _______________________________________________________________________________
- The employees who tend to set and achieve their own goals are: _______________________________________________________________________________
- The employees who are the most innovative and creative are: _______________________________________________________________________________
- The employees who appear most dedicated to my company are: _______________________________________________________________________________
- The employees who require the least amount of supervision are: _______________________________________________________________________________
- The employees who regularly finish tasks are: _______________________________________________________________________________
- The employees least concerned with status are: _______________________________________________________________________________
- The employees who tend to overcome obstacles are: _______________________________________________________________________________
Now, go back over the list of names. Most likely, you'll find names that appear over and over again. These are the people who are most likely to become intrapreneurs. If no names appeared more than once, you may want to take a closer look at the people who work for you. These days intrapreneurs can be the key to giving your company a competitive advantage. If you don't currently have any intrapreneurs on your staff, perhaps it is time to bring some additional talent into your company.
III. Ways to Encourage Employees to Pursue Ideas
A little encouragement can go a long way, especially when fostering intrapreneurs. However, before you can inspire employees, you should have a clear vision of where your company is headed and be able to express this direction to your staff. After that, you can work on getting the creative juices flowing.
Allow employees to spend at least 15 percent of their work time on new ideas for products and services. This is a sure-fire way to send a message that you encourage and support intrapreneurial employees. No doubt, you will find this rule makes most, if not all, of your employees much more productive. Why? People tend to work harder on the things they really enjoy doing. It's human nature.
Brainstorm with employees about new ideas. Ask them to develop some ideas in their off hours, then discuss their thoughts at breakfast meetings over coffee and bagels. Encourage other employees to jump in with suggestions on how to make some of the ideas better. When you find a suggestion that might be viable, ask the employee to fully research the idea. Then have the employee put it all on paper, clearly stating the goal, the steps needed to meet the goal, and the approximate timeline. An idea put in writing seems more real, and the timeline will help push the intrapreneur forward.
In listening to ideas, remember not to discount employees in lower-level positions. Often, people in entry-level jobs are ambitious and eager to prove themselves.
Another way to encourage intrapreneurial employees is to have a clear reward system in place. For most intrapreneurs, money is not the primary reason for developing new products or services, though it is indeed important that they get recognition for their accomplishments. And you don't have to break the bank to do this. If you can afford to, you may want to structure an agreement that gives the intrapreneur a percentage of the profits resulting from his or her product idea, although there are other options, such as a lump sum or a bonus program based on sales levels. The Post-It Notes® inventor, for example, did not receive any profits from his innovation; rather, he was rewarded with a promotion that included a pay raise and many new company benefits.
Beware, though, of the type of promotion you give. Intrapreneurs are creative people, and burdening them behind desks with lots of managerial responsibilities can frustrate them and be counterproductive for the company. Sometimes, it is better to leave the intrapreneurs to do what they do best: create.
For those of you in service industries, you might set up an incentive program for employees who devise new services or better operational practices that save money. In this case, you might consider setting up a percentage incentive where the employee would receive a certain percentage of what he/she saved you.
Even if the intrapreneur's idea flops down the road, it is still crucial that you reward his or her effort. You may choose, for example, to give that employee a certificate of appreciation and a dinner at a nice restaurant. The bottom line is that whether you decide on percentage points, promotions or other fancy perks, it helps to give your employees a reason to take a chance on their ideas.
The following questions should give you a better understanding of whether or not you are currently encouraging your employees to be intrapreneurs:
If you answered "No" to more than one question, you may need to spend more time nurturing intrapreneurship within your employees.
IV. Criteria for Choosing Which Ideas to Implement
Obviously, you won't be able to use every idea. So how do you choose which projects to greenlight? Sometimes, you simply trust your business instincts. If, however, you're on the fence about an idea, consider these questions:
- Does the product or service fall under the intrapreneur's area of expertise? Most likely it will, as people tend to develop ideas that interests them. However, intrapreneurs also tend to be risk takers, so it is not unusual for them to branch out and try something totally new.
- Will your customers have a need for this new product or service? Ask yourself which of your current customers the new idea will serve. Also consider whether the new product or service will attract new customers.
- How about your competitors? Is the proposed product or service better than what is currently on the market? If there is no clear competitive advantage, you may want to stop and consider why customers would buy your offering instead of the competitors'. See also Creating a Competitive Edge.
- Do you have sufficient resources? Is your company currently able to produce the product or provide the service without substantial investments in equipment and/or staff? If a major investment is involved, a cost analysis is in order to judge the appropriateness of the project. Marketing costs and sales projections can also be deciding factors.
If you are still undecided, you may want to sit down and list all of the potential risks and potential rewards. Once the facts and figures are before you in black and white, you and your management team will have a better idea of the big picture and, thus, should have an easier time deciding what intrapreneurial ideas to pursue.
For additional reading on this topic, see New Products and Services.
V. How to Establish Lines of Responsibility
Once an employee's idea a product or service has been fully researched, and you have decided to go ahead with it, you must establish clear lines of responsibility. This is crucial since your day is already filled with a million other things, and you won't have the time needed to devote to a new venture. Hard as it may be for you to give up control, it's important to let the intrapreneur take his or her idea and fly with it. After all, nobody else will understand or feel as passionately about the invention as the inventor. Thus, if he or she is qualified, you may want to put the intrapreneur in charge and let them be responsible for all aspects of developing the new product or service, including planning, budgets, hiring and performance. By giving the intrapreneur this level of authority, he or she becomes more of a business partner than an employee, and you should act accordingly.
It's also important to remember that the way you and the intrapreneur handle tasks may be very different. Even so, it's sometimes better to let the employee do things their way. It's their project, under the umbrella of your company. If you see an intrapreneurial employee about to make a mistake, if possible, don't try to stop them. Give them the freedom to fail and learn from their mistakes even if these mistakes cost the company time or money. Going in, you should view all failures, within reason, as learning experiences.
If you see weaknesses in the intrapreneur's business plan, you can balance these out by adding support staff to the project. He or she will need plenty of assistance in many disciplines, from technical aspects to marketing, to get the new product or service off the ground. You may work together to decide which employees will work on the new business and which ones will remain focused on the current products and services.
It will be necessary for you to give regular, clear feedback to the intrapreneur. While you have taken a back seat role on this particular project, it is still your company and your pocketbook that you must be concerned about.
The following questions should help you to see if you are nurturing your intrapreneur in his or her new role:
If you answered "No" to more than one question, you may want to consider reassessing your relationship with the intrapreneur. Remember that measured involvement and mutual trust and respect are vital to the success of the new venture.
VI. Drawbacks and Cautions
Intrapreneurial companies do have their drawbacks. When you transfer authority to another person in your organization especially when he or she is unproven you could be greenlighting them to make some bad business decisions. In the end, it is your pocketbook and your reputation at risk.
And here is something else to remember: Not every intrapreneurial idea results in a Post-It Notes®. More often than not, new products and services fail to take off or are only moderate successes.
It is possible that sales will fail to cover your startup, production and marketing costs. Even so, many times it is worthwhile to take these risks because you never know when you'll find a diamond in the rough. And when all is said and done, a couple of medium successes can be just as lucrative as one big one.
You should also beware that when an idea takes off, you risk the intrapreneur feeling frustrated that he or she is not receiving enough compensation for their ideas. As they see you reaping the fruits of their labor, they may want a larger portion of the profits. This is why it is crucial to have a clearly defined reward system in place before you start out. Smart managers understand the importance of a letter of agreement, no matter how informal, between you and the intrapreneur just to protect yourself in case a problem should arise.
Similarly, you should be cautiously optimistic when results are really good. If an intrapreneur's product or service has really skyrocketed, the temptation may be to give him or her full reign. Doing so could be a costly mistake. Your intrapreneur may have had one fabulous idea, but that does not guarantee that the rest of his or her ideas will take off in a similar fashion. As you, no doubt, have learned through your own business experience, lots of ideas are born on timing and luck.
Gifford Pinchot III, Elizabeth Pinchot, "The Intelligent Organization: Engaging The Talent & Initiative Of Everyone In The Workplace" (Berret-Koehler, 1996)
Thomas J. Peters, Robert Townsend, Tom Peters, "Excellence In The Organization" (Simon & Schuster, 1995)
Patricia McLagan, Christo Nel, "The Age Of Participation: New Governance For The Workplace & The World" (Berret-Koelher, 1997)
Copyright ©, 2002, Virtual Advisor Inc.