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Concept of Intrapreneurship

Very simply put, Intrapreneurship is Entrepreneurship practiced by people withinestablished organisations. That really begs the next question...

CONCEPT OF ENTERPRENEURSHIP:

1. Entrepreneurship is the process of creating value by bringing together a uniquepackage of resources to exploit an opportunity.2. Entrepreneurship is the pursuit of opportunity without regard to resources currentlycontrolled.From both definitions above, we can note that Entrepreneurs are opportunity driven.Opportunity comes from changes in the environment, and one characteristic of Entrepreneurs is that they are good a seeing patterns of change. It is also evidentthat Entrepreneurs are not resource driven -while the manager asks, "Given theresources under my control, what can I achieve?" the Entrepreneur asks "Given whatI want to achieve, what resources do I need to acquire?"

Difference between Intrepreneur andEntrepreneur:

Intrapreneur is a person who focuses on innovation and creativity and who transformsa dream or an idea into a profitable venture, by operating within the organizationalenvironment. Intrapreneurs, by definition, embody the same characteristics as theEntrepreneur, conviction, passion, and drive. If the company is supportive, theIntrapreneur succeeds. When the organization is not, the Intrapreneur usually fails orleaves to start a new company.An Intrapreneur thinks like an entrepreneur seeking out opportunities, which benefitthe corporation. It was a new way of thinking, in making companies more productiveand profitable. Visionary employees who thought like entrepreneurs. IBM is oneof the leading companies, which encourages INTRAPRENEUR.

MAIN DIFFERENCE BETWEEN ENTERPRENEURSHIPAND INTRAPRENEURSHIP:

There are, of course, a few things that are different between Intrapreneurship andEntrepreneurship. For starters, the Intrapreneur acts within the confines of an existingorganisation. The dictates of most organisations would be that the Intrapreneurshould ask for permission before attempting to create a desired future - in practice,the Intrapreneur is more inclined to act first and ask for forgiveness than to ask forpermission before acting.The Intrapreneur is also typically the intra-organisational revolutionary - challengingthe status quo and fighting to change the system from within. This ordinarily creates acertain amount of organisational friction. A healthy dose of mutual respect is requiredin order to ensure that such friction can be positively channeled.One advantage of Intrapreneurship over Entrepreneurship is that Intrapreneurtypically finds a ready source of "free" resources within the organisation which can be

applied to the opportunity being exploited. Intrapreneurs seek out the organisationalslack or fat, and co-opt it into Intrapreneurial ventures.However, innovation tends to be come harder as an organisation gets larger for thefollowing reasons:

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1. The larger a company gets, the harder it is for anyone to know whateveryone is doing.2. The specialisation and separation that help business units maintain focusalso hamper communication.3. Internal competition magnifies the problem, because it encourages groupsto hoard, rather than share what they've learned."(Hargadon, A. and Sutton,R.I., 2000, "The Knowledge-brokering", Harvard Business Review, May-June2000, pp158-166)

IMPORTANCE OF INTRAPRENEURSHIP NOWADAYS:

No-one needs another web page telling them that the world is changing now fasterthan ever before. Organisations are finding it harder and harder to survive by merelycompeting. They are, therefore, increasingly looking towards their Intrapreneurs totake them beyond competition to create new businesses in new markets.

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"As competition intensifies, the need for creative thinking increases. It is nolonger enough to do the same thing better... no longer enough to be efficientand solve problems. Far more is needed. Now business has to keep up withchanges... And that requires creativity. That means creativity both at astrategic level and also on the front line, to accompany the shift thatcompetitive business demands... from administration to trueentrepreneurship."Edward de Bono

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"Develop success from failures. Discouragement and failure are two of thesurest stepping stones to success. No other element can do so much for a manif he is willing to study them and make capital out of them."Dale Carnegie According to Gary Hamel, innovation will be the critical element in creating wealth inthe future.(Marrs, D., 2000, "Old Companies given Second Chance", Business Day,September 21, 2000, pp20)

CAUSES BEHIND RETARDATION OFINTRAPRENEURSHIP:

The primary factors retarding Intrapreneurship are:

The costs of failure too high, and the rewards of success are too low.

Intrapreneurs need to be given the space in which to fail, since failure is anunavoidable aspect of the Intrapreneurial process. This is not to say that organisationsshould simply condone failure, but rather that organisations need to begin to measureand attribute failure to either Intrapreneur fault, or circumstances beyond theIntrapreneurs control - and punish and reward accordingly. Similarly, the rewards forsuccess are usually inadequate - few organisations provide rewards for Intrapreneursthat even closely approximate the rewards available to the Entrepreneurial

counterparts. Most incentivisation systems need to be upgraded accordingly.

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"Enron: If we've broken a paradigm, it's the compensation paradigm. We paypeople like entrepreneurs. A lot of companies talk about intrapreneurship andask people to take risks, but if those people succeed they get nothing morethan a small bonus, and if they fail they get fired.""You can't create wealth unless you are willing to share it."Fortune Magazine(Gary Hamel, 2000:120, in Fortune Magazine, June 12, 2000)

Inertia caused by established systems that no-one is willing to change.

Mostorganisations are governed by implicit and explicit systems, and in many cases peopleare reluctant to change them. Intrapreneurs are met with "this is the way we'vealways done it around here", "if it ain't broke, don't fix it", and "changing it now would just take too much effort..." Many organisations use their existing systems to provethey already have the "right answer" (see above), effectively dousing creativity.

Hierarchy.

Organisational hierarchies are what create the need to ask for permission- the deeper the hierarchy, that harder it is to get permission for anything new.Hierarchies also tend to create narrow career paths and myopic thinking, furtherstifling creativity and innovation. People lower down in the hierarchy have a tendencyto become dis-empowered through having to ask permission, eventually developingthe "victim mentality" that causes reactivity.Why do many Intrapreneurs remain within bureaucracies despite these factors? Onereason may be for the thrill of outwitting the Pointy-Haired Boss (ref: Dilbert comics).Each of the elements above can become deeply ingrained into the culture (thesymbols of acceptable behaviour) of the organisation. Consequently, bureaucraticbehaviour may remain entrenched despite management's overt attempts to create anIntrapreneurial organisation. What then can organisations do to encourageIntrapreneurship? Here, the old adage applies: "You get what you measure." (A littlebit of measurement based incentivisation wouldn't hurt either.) Organisations,therefore, need to find ways to measure and reward Intrapreneurship - both in termsof its frequency, and the rigour with which it is pursued. Organisational processes andstructures are required to foster Intrapreneurship, just as they are for any otheraspect of the organisation.

REASONS BEHIND INTRAPRENEURSHIP INITIATION:

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"The best innovators aren't lone geniuses. They're people who can take an ideathat's obvious in one context and apply it in not-so-obvious ways to a differentcontext. The best companies have learned to systemise that process."(Hargadon, A. and Sutton, R.I., 2000, "Building and Innovation Factory",Harvard Business Review, May-June 2000, pp157)