Create an Intrapreneurial Culture

By Thomas Nies

Published 02/22/2008

In an influential 1985 book, still relevant today, Gifford Pinchot III coined the phrase
“intrapreneurship” to describe the marriage of an entrepreneurial spirit – complete
with its fierce independence and lack of deference to established views and the
strictures of conventional wisdom – with the resources of a large corporation. While
these two spirits may seem in conflict, they actually thrive in many of the world’s
best-run companies.

Intrapreneurship is a strategy for stimulating innovation by making better use of

entrepreneurial talent. When effectively promoted and channeled, intrapreneurship not
only fosters innovation, it also helps employees with good ideas to better channel the
resources of a corporation to develop more successful products.

Some of the greatest business leaders of the past century made their early mark in
business as intrapreneurs. Former General Electric chairman Jack Welch made a name
for himself by building GE’s engineering plastics business as if he were starting his
own company. Lew Lehr, former chairman of 3M, similarly built his career on his
intrapreneurial pursuit of 3M’s expansion into the healthcare industry.

By fostering an intrapreneur ethic within a company, employees can be empowered

and enabled to become company “change agents” who are comfortable bringing new
ideas forward and promoting their execution.

It is essential to create an elevating and encouraging environment that provides

talented and entrepreneurial minded people the freedom to innovate, whilst at the
same time supporting them with the resources to quickly bring their innovations to
market. For small-to-midsize firms, innovation and speed-to-market are two ways to
compete successfully against dominant and well-entrenched companies. Creating,
fostering, and sustaining the right environment really are intrapreneurial imperatives.

As someone who founded my company, Cincom with “$600 and a card table,” I will
always be at heart an entrepreneur. So, I could never even imagine allowing us to
become a company that doesn’t support creative free spirits who also seek to pursue
good opportunities, and in the process, build new businesses within the company,
which will provide new and different ways to better satisfy customer wants and needs.
However, Cincom is in many respects also a conservative company. We don’t take
reckless risks, and all initiatives require a solid business case.

For intrapreneurship to work effectively, several important considerations should be

taken into account that balances risk with reward, and opportunity with difficulty.

Listen, Always Listen

Intrapreneurs above all else thrive on the freedom that fuels their innate desire to
innovate. This can be a handful for a manager who Does not understand or respect the
entrepreneurial nature.

For intrapreneurship to flourish in an organization, leadership has to be willing to

listen to and recognize good ideas whenever and from whomever they arise. This
message must be constantly reinforced from the highest levels of the organization.

The key is creating an environment where an employee’s ideas, when properly

presented, are taken seriously and then be properly supported and recognized. One
never knows where good ideas will come from, especially in a corporate culture that
supports intrapreneurship. An account representative could become the catalyst for
revolutionizing a company’s entire business strategy when presented with the ongoing
opportunity to approach company leadership with a proposal.

Beyond listening, it is critical to enable people to see their own ideas through, even if
they must cross over into a new functional area and push themselves past any
previous company achievements or organizational structure.

Cut the Red Tape

It is important to create an environment where anyone can come forward with an idea
on how to improve any aspect of the business. It should not matter where that person
fits on the organizational chart. If the idea is good, and the benefits and risks are
clearly stated, that idea should get the green light - and the support it merits.

There must still be a business approval process, but it should be efficient. Projects that
deserve support should be quickly expedited. Then it may be better to avoid wading
through a cumbersome and lengthy buy-in process than to miss a window of
opportunity.

Need for Speed

Companies can foster and encourage potential intrapreneurs by sending the message
throughout the organization that a case properly presented, which thinks through the
issues, identifies and explains what can go wrong and what can go right, and how to
put contingencies in place, is welcome. But, the process must be simple and flexible
enough to initially move quickly - and then to later scale up as rapidly as possible
when success develops.

Many entrepreneurial careers are built on a succession of minor failures, with the
accumulated lessons learned from each leading to ultimate success. There is an
imperative need to first experience something in order to be able to well understand it.
And, as we learn forward but only understand backward, there will always be
mistakes made. It is important for companies to allow for a degree of inevitable
failure around new projects and initiatives without sending the message that failure is
not tolerated.

Companies must strive to provide a “freedom to fail” culture and environment.

Although failure resulting from poor planning and execution is not accepted, there
should be no penalty for those who come forward with good ideas, assuming they’ve
been well presented and competently executed.

An intrapreneurial culture must embrace constructive failure to score big victories.

There is a certain intangible something that all high achievers have; this is a
willingness to put themselves “out there” where all can see, and to expose themselves
to the risk of failure and the criticism that is sure to follow. Organizations must
support those who have such courage and confidence that they are willing to fail in
order to succeed.

Many companies are filled with reliable “singles hitters” who play it safe and never
really aspire to greatness. Intrapreneurs, on the other hand, swing for the fences.
Sometimes they strike out, but when they connect, they like to hit it big.

Share Credit

Harry Truman once said, “It is amazing what you can accomplish if you do not care
who gets the credit.’ It doesn’t do any good to encourage team members at all levels
to bring innovative ideas to company leadership if the leaders then take those ideas
and make them their own. Recognition is a key driver for us all. Leaders who seek to
steal the recognition rightfully deserved by others find few followers.

So, one needs to make sure credit goes where it is due, and to share it widely. It costs
nothing to admit that the $10 million idea came from the receptionist. No one is
diminished as a result, and the company is $10 million richer for it. The receptionist
becomes then even more eager to offer better future ideas. And, everyone else in the
organization is encouraged to follow the lead of that receptionist, and to help to
improve the organization. “Leaders deal in hope,” as Napoleon, noted. But in top-
performing organizations “Leadership is always plural.” No one ever succeeds alone.

Look Forward to Breaking Precedent

Every organization must have processes and rules of procedure and behavior. But
when we catch ourselves saying, “We’ve never done it that way before,” or “that’s not
how we do things,” we should stop and reflect on whether we are saying this out of
habit or for good reason. Chances are we may be citing a rule that may no longer be
appropriate for the new conditions and situations we are now trying to
intrapreneurially develop. Maybe it’s best, and even necessary, to sometimes break
with past traditions and establish new precedents to respond to new opportunities.
This is especially so in those industries where the pace of innovation is great, and
obsolescence is just as speedy.

The ability to differentiate between rules needed to guide and perform within the
current business and rules that may restrict success in building a new business is what
discernment and opportunity awareness are all about. Going forward is always a
journey. And as journeys progress, we need new signposts along the way that point
the way forward on the next leg of our trip. These signposts are the rules and
regulations for building new businesses within existing businesses. The trailblazing
intrapreneurs are the ones who set up those signposts for others to follow.
Journeys require maps and itineraries; but sometimes we also need to take detours and
alternative routes when unusual or unexpected opportunities and situations develop,
as almost always happens.

Ignite Intrapreneurs

To start a revolution of initiative and innovation, ignite the intrapreneurs and then get
out of the way! Lift off generates a lot of heat. And a lot of fun, too!

Ignite. Fire up! Get out of the way!

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