All You Need to Know About Intrapreneurship and its Benefits

Innovation is the driving force of any firm’s survival in a cutthroat economic landscape. A company lagging in innovation can lose market share to scrappy rivals who innovate tenaciously. In fact, 79% of companies worldwide ranked innovation as a top-three priority, according to a Boston Consulting Group (BCG) report. Moreover, 66% of companies planned to increase spending on innovation in 2023. A company often takes the route of intrapreneurship to cultivate an entrepreneurial spirit. So, what does this entail? It is a dynamic approach that empowers employees with an entrepreneurial mindset to innovate without any hindrance. Intrapreneurship differs from traditional models where innovation is typically confined to specific departments or the top executives. Let’s take a closer look at intrapreneurship and how it can be leveraged to drive favorable outcomes.

What is Intrapreneurship?

The term “intrapreneurship” is essentially a system that paves the way for an employee to be an entrepreneur within an organization. In other words, it is a form of corporate entrepreneurship where employees develop innovative ideas, just like an entrepreneur. However, an entrepreneur has to reckon with the loss resulting from the failure of their venture, unlike an intrapreneur.

1. Enterprising Vision

A company practicing intrapreneurship needs someone with an entrepreneurial mindset who can think out of the box to develop ideas. Typically, an intrapreneur is someone self-motivated, proactive, and determined.

2. Resources

An intrapreneur has access to the firm’s resources, such as funding, infrastructure, and existing networks. It is a crucial advantage as traditional entrepreneurs knock on many doors to secure funding.

3. Innovation Focus

Essentially, a firm seeks to encourage innovation through intrapreneurship. So an intrapreneur’s ideas should look to develop new products or services, address problems in existing company processes, or explore new markets.

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What is the Difference Between Entrepreneurship and Intrapreneurship?

Entrepreneurship and intrapreneurship are alike as they both hinge on driving change through innovation but the similarity stops there. Here’s how:

1. Responsibility

Entrepreneurs assume significant risks in setting up their ventures as it is their money or reputation on the line. On the other hand, an intrapreneur bears no risk as the organization covers losses in case of failure.

2. Autonomy

Entrepreneurs function outside organizational structures so they don’t report to anyone. In contrast, intrapreneurship operates within the walls of organizations where employees are answerable to the top management.

3. Access

An entrepreneur has limited access so they have to mobilize funding and resources on their own. It is comparatively easy for intrapreneurs because they can use the company’s funds, resources, and infrastructure to develop their ideas.

4. Ownership

Entrepreneurs enjoy full ownership and control over their ventures, including patents and blueprints. This is not the case with intrapreneurship because the patents to an intrapreneur’s idea are often held by the firm.

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How Can Organizations Foster a Culture of Intrapreneurship?

1. Conducive Atmosphere

Organizations must imbibe an intrapreneurial vision in their ethos, which will motivate employees to ideate without repercussions to promote experimentation. A company can also regularly hold mentorship programs, innovation labs, and intrapreneurship competitions.

2. Supportive Leadership

The top management of a firm should encourage employees to take initiative without stifling creativity. They must train managers to support intrapreneurs. They should be liberal in their assessment of intrapreneurial endeavors and provide guidance whenever necessary.

3. Employee Empowerment

Employees must be able to take calculated risks and make their own decisions about the direction of a project. They should have access to resources and funding to pursue their idea. Furthermore, employees need to have learning opportunities to hone their skills.

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What are Some Successful Examples of Intrapreneurship in Businesses?

A culture of corporate entrepreneurship allows companies to tackle any slump in their own research and development departments. Here are a few successful examples:

1. Flamin’ Hot Cheetos

Frito-Lay, the company behind Cheetos, was struggling in the 1980s so the then CEO Roger Enrico asked employees to “think like a CEO”. Richard Montañez, a janitor at the company, came up with Cheetos prepared with his spice mix. Flamin’ Hot Cheetos is now one of the most successful products of the company.

2. McDonald’s

Everyone’s childhood is incomplete without a Happy Meal. Dick Brams, a regional manager, developed the concept to attract families with young children in 1977 as a marketing gimmick. He pitched the idea to the company which was impressed immediately. It is now a cultural icon and generates a lot of revenue for McDonald’s.

3. 3M

We all love colorful Post-it notes today but their origin dates back to 1968. And interestingly, they were not conceived by the company. Spencer Silver, a scientist at 3M, developed a weak adhesive that wasn’t quite useful until Art Fry, another 3M employee, needed a bookmark that would stick without damaging the pages. The rest, as they say, is history.

4. Sony PlayStation

Ken Kutaragi, a junior engineer at Sony, tinkered with his daughter’s Nintendo to enhance her gaming experience. He approached Sony but his idea was rejected as the firm was not associated with gaming. But Kutaragi did not give up. The company launched the PlayStation in 1994, changing the gaming landscape forever. Kutaragi later went on to become Sony’s CEO.

What are the Benefits of Embracing Intrapreneurship Within a Company?

1. Promotes Innovation

The importance of innovation in today’s world cannot be stressed enough. A company can easily cultivate innovation by allowing employees to conceive and develop ideas. It allows the companies to develop new products, services, and processes.

2. Builds Morale

Employee empowerment is one of the key advantages of intrapreneurship. A company choosing to develop an employee’s idea can motivate them immensely. The trust also makes them feel valued, ultimately resulting in job satisfaction.

3. Generates Revenue

A successful intrapreneurial project can lead to a new product or service that increases the company’s revenue subsequently. A consistent run of profitability can help the company enter new markets and meet the needs of customers.

4. Develops Skills

An intrapreneurial company compels employees to upskill or improve their knowledge so they can refine their ideas. It helps them grow professionally as they gain practical experience from working on challenging projects.

5. Offers a Competitive Advantage

There is a need to always be ahead of your rivals by one step. The only way to address fierce competition is through innovation, which is possible under intrapreneurship. Firms can distinguish themselves and augment their market share.

What Skills and Qualities Make a Successful Intrapreneur?

1. Creativity

An intrapreneur needs to think outside the box to come up with fresh takes on old problems.

2. Risk Appetite

An innovator has to be fearless because developing an idea requires taking calculated risks from time to time. They should not hesitate to step out of their comfort zones.

3. Initiative

Every aspiring intrapreneur should strive to be proactive when seeking opportunities. They should not be waiting for them. They must be resilient in the face of setbacks.

4. Communication

It is important to know how to communicate clearly as intrapreneurs need to convince many people about their ideas before their realization.

5. Project Management Skills

Every intrapreneur must know how to plan, budget, delegate, and track progress to execute their projects effectively and on time.

6. Acute Understanding

There are internal politics in organizations, especially large ones with complex hierarchies. It is crucial to have a strong grip on the company’s culture to build relationships for support.

7. Team Player

An intrapreneur must know how to work in teams and collaborate seamlessly with other departments as an idea requires all hands on deck for fruition.

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Intrapreneurship will soon be the order of the day as companies ramp up their focus on innovation. The changing trends necessitate an effort from your end to upskill and be prepared for the coming future. Emeritus offers a range of entrepreneurship courses crafted by industry experts to gain practical insights into intrapreneurship and its fundamentals. They will help you navigate the complexities of turning the seed of an idea into a thriving plant. Sign up for one of these courses and let your business idea guide you to a successful career.

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