Intrapreneurs – entrepreneurially driven employees – are the business world’s new secret weapon. But can these radical innovators be harnessed to boost profits too?
Google has perennially topped the ‘best places to work’ polls in recent years. One reason cited by employees is the search giant’s oft-quoted policy of encouraging workers to spend 20 per cent of their time experimenting with new ideas. Silicon Valley hippy-like idealism, maybe (see also LinkedIn’s ‘[in]cubator’ programme, which allows employees to pitch project ideas to executive staff) but this ’20 per cent time’ (along with the ultra-secretive Google X lab) is how new revenue streams Gmail, Google Earth and Google Glass were all hatched.
The concept of the intrapreneur – dynamic employees who create entrepreneurial, wealth-creating ideas from within their own organisation – is spreading to the UK too. John Lewis has invested in the ‘JLab’, launching this summer, which will give start-ups office space and advice, with the overall aim of rolling out the project across its 40 stores.
Tesco has given space to intrapreneurs Harris + Hoole, the seemingly independent artisan coffee shop chain (actually half-owned by Tesco) to operate in 30 of its stores (in March it announced it would double the size). Even Sir Richard Branson admits: “Virgin could never have grown into the group of more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain.” Branson cites Virgin Atlantic’s herringbone-configured sleeper-suites, which originated from an enterprising young Virgin designer volunteering the idea.
“Intrapreneurs are people with an idea that could be monetised, but don’t know how or are too afraid to go into the big wide world alone,” says Mike Sotirakos, chief executive of Watershed Entrepreneurs. “There’s huge opportunity for corporates to combine the strengths of the big company with their brilliant minds.”
But, the big question is: Do intrapreneurs actually make money? To many executives, ploughing capital into financing maverick ideas can seem like an inherently loss-making exercise. As Sotirakos points out: “At the moment, I’m not convinced companies have monetised intrapreneurship,” adding, “They [companies] have to suffer the consequences of [intrapreneurs’] mistakes.”
However, businesses with a strong tradition of intrapreneurship would argue it’s less about immediate profit, and more about boosting long-term financial health; a vital measure to stop their business from stagnating. The tech industry in particular is littered with companies such as BlackBerry and Motorola who have dominated markets but frittered their lead arguably due to an inability to foster new ideas.
To make intrapreneurship cost-effective, Sotirakos suggests, “structuring an exciting deal that goes beyond just salary – maybe a stake in the business or creating a seedling intrapreneurship. But if the idea’s credible, you test it to the market and the monetisation comes through market forces.”
Companies could also give intrapreneurs their own internal bank account. “By giving them their own bank account, you effectively create a specific P&L [profit and loss] within the organisation,” says Sotirakos, who also recommends selecting other teams “to compete with the ideas. They then create a Dragons’ Den-style environment of intrapreneurs ?– which hopefully launches a fully fledged business.”
But couldn’t allowing intrapreneurs to work on eccentric ideas within the organisation frighten off big shareholders? There’s also the danger that the intrapreneur could develop the idea outside the company, reluctant to let senior executives reap the rewards.
“That danger does exist,” admits Sotirakos. “But developing their idea within the company means the entrepreneur has access to easy capital and won’t have trouble finding venture capital themselves.”
The term ‘intrapreneurship’ was first coined in the late-1970s. In 1985, Steve Jobs described the 1970s/1980s-era Macintosh team as “intrapreneurship – only a few years before the term was coined – a group of people going, in essence, back to the garage, but in a large company”. Both the Sony PlayStation and Post-it notes were developed by intrapreneurs (the Eureka moment for the latter happened after a 3M employee wanted something to mark pages in his church hymn book which wouldn’t fall out).
Intrapreneurship particularly resonates with ‘millennials’ [those born between the early-1980s to early-2000s]. A recent Deloitte survey found 78 per cent of those interviewed were influenced by how innovative a company is when deciding to work there. Yet despite the efforts of John Lewis et al to foster intrapreneurship, it’s clear most UK companies have a way to go before it’s implemented nationwide.
The Chartered Institute of Personnel and Development found UK growth could be boosted if large firms adopted the entrepreneurial spirit of start-ups, but also discovered that only 12 per cent of employers are doing anything about nurturing it.
“I really hope they do [nurture this spirit],” says Sotirakos. “Intrapreneurs will create a different marketplace. It’s not a safe option. But intrapreneurship can spark creativity – and a culture of belonging and excitement. And, maybe, it can massively push a company towards explosive growth.”