Recently, I came across with this interesting article "Some Thoughts on Intrapreneurship", written by Chris Fox. I like to share it with you, and other members of CiteHR, to update your knowledge regarding the said topic. Please go through it attentively and you may be able to understand the difference. Further, you can find a very informative online PowerPoint presentation by J. Gregory Dees on "Social Entrepreneurship", which will help you to understand about Entrepreneurship in detail.
Some Thoughts on Intrapreneurship
What is Intrapreneurship?
Very simply put, Intrapreneurship is Entrepreneurship practiced by people within established organisations. That really begs the next question...
What is Entrepreneurship?
Two definitions spring to mind:
1. Entrepreneurship is the process of creating value by bringing together a unique package of resources to exploit an opportunity.
2. Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.
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 evident that Entrepreneurs are not resource driven - while the manager asks, "Given the resources under my control, what can I achieve?" the Entrepreneur asks "Given what I want to achieve, what resources do I need to acquire?"
It is the Entrepreneurs drive to acquire resources in order to exploit opportunities that creates the high correlation between Entrepreneurship and business growth.
George Bernard Shaw wrote that "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man." This describes the Entrepreneur - Entrepreneurs tend to be motivated by the dream of things that conventional wisdom says can't, won't or shouldn't be done. This requires a certain element of stubborn perseverance. According to Tom Peters, in Thriving on Chaos, "The role of the Entrepreneur is to stand up to all, to stand up to ridicule."
Of course, another thing that the Entrepreneur has to stand up to is failure. Because it is the Entrepreneurs who are out there pushing the boundaries and changing the world, it is inevitable that they will make mistakes. An important characteristic of Entrepreneurs is that they are good a failure - the Entrepreneur sees failure as a temporary set-back, an investment in education, and, most importantly, an opportunity to learn and to do better next time. Winston Churchill summed this up when he said "Success is the ability to go from failure to failure with no loss of enthusiasm".
The two magic words for the Entrepreneur are "What if...?" ("What if telephones didn't have to be connected to each other with wires?" "What if customers could design and brand their own bank?" "What if you could make cash withdrawals from the check-out tills at the supermarket?", etc.) Not all the questions the Entrepreneur asks have to make total sense, however, the seed of inspiration may lie in the answer to even the most seemingly ridiculous question. The Entrepreneur sees the world through a kaleidoscope - constantly looking at it from different angles and seeing resources combined in different ways to address different needs. For the Entrepreneur, everything is variable and nothing is fixed, assumptions exist only to be challenged. (Fred Kofman's principles of Double-Loop Accounting in Senge [1998:292], sums up the typical nature of Entrepreneurial assumption questioning.)
According to George Bernard Shaw, "The people who get on in this world are the people who get up and look for the circumstances they want, and, if they can't find them, make them.". Entrepreneurs create their own futures. Convention defines the opposite of "reactive" as being "proactive". Perhaps a better opposite for "reactive" is "creative" - certainly the words are more similar (just move the "c" to the front). The Entrepreneur is more than proactive, predicting the future and going with the flow - the Entrepreneur understands possible futures and creates the future of his or her choice.
There are three fundamental blocks to such creativity:
1. Believing you already have "the right answer". This prevents you from understanding possible alternative futures and choosing to create the one you most desire.
- The more familiar not-invented-here syndrome - in which people, believing they know more than others in their field, reject new ideas that are "not invented here" - is viewed ... as innefficient, arrogant, and ultimately fatal to innovation."(Hargadon, A. and Sutton, R.I., 2000, "The Knowledge-brokering Cycle", Harvard Business Review, May-June 2000, pp158-166)
3. Believing you are not creative. Before you can be creative, you have to choose and create a future in which you are creative. (This presents a bit of catch-22...)
The Harvard Business Reviews notes on the case method say "Ninety percent of the task of the top manager is to ask useful questions. Answers are relatively easy to find, but asking good questions, that is the more critical skill." I don't see why the rest of us should be shooting for anywhere lower than the top? Everyone in the organisation should be able to add just as much value by asking the right questions.
Asking questions that at first seem ridiculous is perhaps the most difficult task of all. Aristotle must have recognised this when he said "It is the mark of an educated mind to be able to entertain a thought without accepting it."
In the final analysis, there are three foundations of Entrepreneurship:
- 1. innovation - the ability to see things in novel ways.
2. calculated risk taking - the ability to take calculated chances and to embrace failure as a learning experience.
3. creativity - the ability to conceive of multiple possible futures and to proactively create the one you most desire.
What is different about Intrapreneurship?
There are, of course, a few things that are different between Intrapreneurship and Entrepreneurship. For starters, the Intrapreneur acts within the confines of an existing organisation. The dictates of most organisations would be that the Intrapreneur should 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 for permission before acting.
The Intrapreneur is also typically the intra-organisational revolutionary - challenging the status quo and fighting to change the system from within. This ordinarily creates a certain amount of organisational friction. A healthy dose of mutual respect is required in order to ensure that such friction can be positively channeled.
One advantage of Intrapreneurship over Entrepreneurship is that Intrapreneur typically finds a ready source of "free" resources within the organisation which can be applied to the opportunity being exploited. Intrapreneurs seek out the organisational slack or fat, and co-opt it into Intrapreneurial ventures.
However, innovation tends to be come harder as an organisation gets larger for the following reasons:
- 1. The larger a company gets, the harder it is for anyone to know what everyone is doing.
2. The specialisation and separation that help business units maintain focus also hamper communication.
3. Internal competition magnifies the problem, because it encourages groups to hoard, rather than share what they've learned." (Hargadon, A. and Sutton, R.I., 2000, "The Knowledge-brokering", Harvard Business Review, May-June 2000, pp158-166)
No-one needs another web page telling them that the world is changing now faster than ever before. Organisations are finding it harder and harder to survive by merely competing. They are, therefore, increasingly looking towards their Intrapreneurs to take them beyond competition to create new businesses in new markets.
- "As competition intensifies, the need for creative thinking increases. It is no longer enough to do the same thing better... no longer enough to be efficient and solve problems. Far more is needed. Now business has to keep up with changes... And that requires creativity. That means creativity both at a strategic level and also on the front line, to accompany the shift that competitive business demands... from administration to true entrepreneurship." Edward de Bono
- "Develop success from failures. Discouragement and failure are two of the surest stepping stones to success. No other element can do so much for a man if he is willing to study them and make capital out of them." Dale Carnegie
What causes or retards Intrapreneurship?
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 an unavoidable aspect of the Intrapreneurial process. This is not to say that organisations should simply condone failure, but rather that organisations need to begin to measure and attribute failure to either Intrapreneur fault, or circumstances beyond the Intrapreneurs control - and punish and reward accordingly. Similarly, the rewards for success are usually inadequate - few organisations provide rewards for Intrapreneurs that even closely approximate the rewards available to the Entrepreneurial counterparts. Most incentivisation systems need to be upgraded accordingly.
- "Enron: If we've broken a paradigm, it's the compensation paradigm. We pay people like entrepreneurs. A lot of companies talk about intrapreneurship and ask people to take risks, but if those people succeed they get nothing more than 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)
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, further stifling creativity and innovation. People lower down in the hierarchy have a tendency to become dis-empowered through having to ask permission, eventually developing the "victim mentality" that causes reactivity.
Why do many Intrapreneurs remain within bureaucracies despite these factors? One reason 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 (the symbols of acceptable behaviour) of the organisation. Consequently, bureaucratic behaviour may remain entrenched despite management's overt attempts to create an Intrapreneurial organisation. What then can organisations do to encourage Intrapreneurship? Here, the old adage applies: "You get what you measure." (A little bit of measurement based incentivisation wouldn't hurt either.) Organisations, therefore, need to find ways to measure and reward Intrapreneurship - both in terms of its frequency, and the rigour with which it is pursued. Organisational processes and structures are required to foster Intrapreneurship, just as they are for any other aspect of the organisation.
Companies can help Intraprenuership to happen:
- "The best innovators aren't lone geniuses. They're people who can take an idea that's obvious in one context and apply it in not-so-obvious ways to a different context. 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)
A few further quotations might help to further illustrate the nature of Entrepreneurial thought.
- "Some look at things and ask 'Why?'. Others look at things and ask 'Why not?'George Bernard Shaw
"Welcome every problem as an opportunity. Each moment is the greatest challenge, the best thing that ever happened to you. The more difficult the problem, the greater the challenge in working it out."Grace Speare
In my mind, Intrapreneurship at a group level is inextricably intertwined with organisational learning. I therefore end with a quotation from Gandhi which sums up the spirit of Entrepreneurship as well as any does:
- "Live as if to die tomorrow. Learn as if to live forever."Mahatma Gandhi
Definitions of Entrepreneur on the Web.
Definitions of Intrapreneur on the Web.
What the Heck is Intrapreneurship?.
Intrapreneur is a person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture, by operating within the organizational environment. Intrapreneurs, by definition, embody the same characteristics as the Entrepreneur, conviction, passion, and drive. If the company is supportive, the Intrapreneur succeeds. When the organization is not, the Intrapreneur usually fails or leaves to start a new company.
An Intrapreneur thinks like an entrepreneur seeking out opportunities, which benefit the corporation. It was a new way of thinking, in making companies more productive and profitable. Visionary employees who thought like entrepreneurs. IBM is one
of the leading companies, which encourages INTRAPRENEUR.
A Savvy Intrapreneur takes a good idea and makes it better.
A Savvy Intrapreneur steps out of the comfort zone of corporate security, to insure s/he creates additional income which at least matches their take home pay. An Intrapreneur works overtime helping to run someone else's business, for the company's future. A Savvy Intrapreneur runs themselves like a business putting in 1 hour a day of overtime for their own financial future.
Developing a career while maintaining position at work requires staying focused as a Savvy Intrapreneur. This takes courage.
Entrepreneur refers to a person who undertakes and operates a new enterprise or venture, and assumes some accountability for the inherent risks.
Most commonly, the term entrepreneur applies to someone who establishes a new entity to offer a new or existing product or service into a new or existing market, whether for a profit or not-for-profit outcome . Business entrepreneurs often have strong beliefs about a market opportunity and are willing to accept a high level of personal, professional or financial RISK to pursue that opportunity.
Business entrepreneurs are often highly regarded as being a critical component of its CAPITALISTIC society. Famed entrepreneurs in America include: HENRY FORD (automobiles), JP MORGAN (banking), BILL GATES (computer operating systems and applications), the British entrepreneur RICHARD BRANSON (travel and media) and others.
Intrapreneurs, by definition, embody the same characteristics as the Entrepreneur, conviction, passion, and drive. The more the Intrapreneur expresses himself, the more the company is forced to confront its own effectiveness. If the company is supportive, the Intrapreneur succeeds. When the organization is not, the Intrapreneur usually fails or leaves to start a new company.
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