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Prof. Poorva Ranjan

: Entrepreneurship Development

Intrapreneurship

It is the practice of using entrepreneurial skills without taking on the risks or accountabilityassociated with entrepreneurial activities. It is practiced by employees and self-employed peopleusing a systemised business model within an established organization. Employees, perhapsengaged in a special project within a larger firm are supposed to behave asentrepreneurs, eventhough they have the resources and capabilities of the larger firm to draw upon. Capturing thedynamic nature of entrepreneurial management (trying things until successful, learning fromfailures, attempting to conserve resources, etc.) adds to the potential of an otherwise staticorganizations without exposing those employees or self employed people to the risks or accountability normally associated with entrepreneurial failure. At some point an entrepreneurialventure reaches the point of being an established business. What that point is is arguable. Somedefinitions specify a certain dollar sales for a certain length of time, others say that once thegrowth rate has leveled off, a business is no longer in its entrepreneurial stage. While reaching a point of "being there" is an achievement, a real concern for most businesses is that somehow becoming an established business means thatthe entrepreneurial spirithas been lost. Hence, thegrowth of intrapreneurship - fostering entrepreneurism within established organizations.In the mid-80s, Gifford Pinchot coined the term "intrapreneur" to describe employees of largecorporations hired to think and act as entrepreneurs. New grads may find that an intrapreneurshipis just what they need to discover first hand all the ups and down of being an entrepreneur.Pinchot defines intrapreneurship as "behaving like an entrepreneur when you're employed at alarge corporation for the benefit of the corporation as a whole" and believes employment as anintrapreneur prior to trying a hand at entrepreneurship is a great way to get your foot into theentrepreneurial door

The Intrapreneurial Organization

Intrapreneurs have been credited with increasing the speed and cost-effectiveness of technologytransfer from research and development to the marketplace. While intrapreneurs are sometimesconsidered inventors, inventors come up with new products. Intrapreneurs come up with new processes that get that product to market. Part of the reason they are considered similar to inventorsis that they are creative and are risk-takers in the sense that they are stepping out of their traditionalrole within the business. However, their risk-taking behavior is personal. In terms of the business,they actually work towards minimizing the risk through the innovative approaches they use tomore efficient and effective product production and sales.Some methods that have been used by businesses to foster intrapreneurship are:

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Users of internal services are allowed to make their own choice of which internal vendor they wish to use.

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Intrapreneurial employees are granted something akin to ownership rights in the internalintraprises they create.

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Companywide involvement is encouraged by insisting on truth and honesty in marketingand marketplace feedback.1

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Prof. Poorva Ranjan

: Entrepreneurship Development

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Intrapreneurial teams are treated as a profit center rather than a cost center(i.e, they areresponsible for their own bottom line). One way some companies handle this is for theteam to have their own internal bank account.

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Team members are allowed a variety of options in jobs, in innovation efforts, alliances, andexchanges.

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Employees are encouraged to develop through training programs.

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Internal enterprises have official standing in the organization.

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A system of contractual agreements between internal enterprises is defined and supported by the organization.

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A system for settling disputesbetween internal enterprises and between employees andenterprises is part of the intrapreneurship plan.Intrapreneurism in business has evolved to encompass a variety of concepts: identifying andfostering employees who have what a considered to be intrapreneurial traits, developing anintrapreneurial process for part or all of a business, anddeveloping innovationthrough rewardingintrapreneurial behavior.

History

The term itself dates to the 1983 PhD dissertation by Burgelman and later defined in a 1985 book by Gifford Pinchot III, "Intrapreneuring"; a revised edition, entitled "Intrapreneuring in Action" iscurrently published. The concept apparently dates back to 1976.The term was later applied to the self-employed worker byEd Ludbrook in his 2008 book '100%Confidence' to describe the self-employed people who operated a systemised business opportunity,such as franchising or a Network Marketing/MLM business. The use of this term helps name thedifferences in entrepreneurial activity and the theory that most business opportunity seekers are not just risk-adverse, they will not accept high levels of risk that entrepreneurs will.In an article in

The Economist

in 1976, Norman Macraepredicted a number of trends in business -one of them being "that dynamic corporations of the future should simultaneously be tryingalternative ways of doing things in competition within themselves". In 1982, he revisited thosethoughts in another

Economist

article, noting that the this trend had resulted in confederations of intrapreneurs. He suggested that firms should not be paying people for attendance, but should be paying competing groups for modules of work done. One suggestion was to set up a number of typing pools contracted for a certain amount of work over a certain time period for alump sum.The members of the pool would be responsible for apportioning work, setting pay, setting work hours or even whether to subcontract out part of the work. Applied across the business spectrumsuch groups would provide the intrapreneurial competition he envisioned.During the same time frame, Gifford andElizabeth Pinchotwere developing their concept of intra-corporate entrepreneur. They coined the word intrapreneur giving credit for their thinking to the1976 article by Macrae. Under their model a person wishing to develop an intrapreneurial projectwould initially have to risk something of value to themself - a portion of their salary, for instance.The intrapreneur could then sell the completed project for both cash bonuses and intra-capitalwhich could be used to develop future projects. Based on the success of some of the early trials of their methods in Sweden they began a school for intrapreneurs and in 1985 they published their first book,

Intrapreneuring

,combining the findings from their research and practical applications .(Note: A revised edition of that book,Intrapreneuring in Actionis now available.)2

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Prof. Poorva Ranjan

: Entrepreneurship DevelopmentBy 1986 John Naisbett was citing intrapreneurship as a way for established businesses to find newmarkets and new products in his our-of-print book, "Re-Inventing the Corporation" andSteve Jobs was describing the development of the Macintosh computer as an intrapreneurial venture withinApple. The concept was established enough that in 1990 Rosabeth Moss Kanter of Harvard Business Schooldiscussed in her book, "When Giants Learn to Dance", the need for intrapreneurial development as a key factor in ensuring the survival of the company.And, in 1992,

The American HeritageDictionary

brought intrapreneurism into the main stream byadding intrapreneur to its dictionary, defining it as "a person within a large corporation who takesdirect responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation". Intrapreneurship was a concept here to stay.

Employee Intrapreneur

An employee

Intrapreneur

is the person who focuses on innovation and creativity and whotransforms a dream or an idea into a profitable venture, by operating within the organizationalenvironment. Thus, Intrapreneurs are

Insideentrepreneurs

who follow the goal of the organization.Employees, perhaps engaged in a special project within a larger firm are supposed to behave asentrepreneurs, even though they have the resources, capabilities and security of the larger firm todraw upon. Capturing a little of the dynamic nature of entrepreneurial management (trying thingsuntil successful, learning from failures, attempting to conserve resources, etc.) adds to the potentialof an otherwise static organizations without exposing those employees to the risks or accountability normally associated with entrepreneurial failure.For the intrapreneurial employee, advice abounds. They are advised to be courageous, moderaterisk takers, frugal, flexible, and creative about their pathway. Their task is to put together a team of enthusiastic volunteers, build a network of sponsors, and ask for advice before asking for resources.Gifford Pinchot'sout-of print book "Intrapreneuring, Why You Don't Have to Leave the Corporation to Become an Entrepreneur " provides 10 commandments for intrapreneurs:1.Do any job needed to make your project work regardless of your job description.2.Share credit wisely.3.Remember, it is easier to ask for forgiveness than permission. 4.Come to work each day willing to be fired.5.Ask for advice before asking for resources.6.Follow your intuition about people; build a team of the best.7.Build a quiet coalition for your idea; early publicity triggers the corporateimmune system. 8.Never bet on a race unless you are running in it.9.Be true to your goals, but realistic about ways to achieve them.10.Honor your sponsors.Online forums that encourage new thinking have evolved withFast CompanyandThe Intrapreneuring Cafebeing among the favorites. Fast Company has the goal of chronicling thechanges under way in how companies create and compete, highlighting the new practices shapinghow work gets done, showcasing teams who are inventing the future and reinventing business, andequipping the people exploring this uncharted territory with the tools, techniques, models, and3