Lesson #207: Big Companies That Embrace Intrapreneurship Will Thrive

It has been well-documented that big companies typically struggle with innovation.  Once companies get to a certain size, their investors become more conservative, their leaders less entrepreneurial, decisions are managed by consensus and their employees become less willing to stick their neck out with “out-of-the-box” ideas, that may not work out and result in losing their jobs.  And, without innovation, companies get too “comfortable” with their past success, just before going out of business (e.g., Woolworth, Montgomery Ward, Borders, Blockbuster, American Motors, Pan Am).

The Birth of Intrapreneurship

But, although that is largely the rule, there are several examples where entrepreneurship inside a large organization can and does prosper.  This is the world of intrapreneurship, a term popularized by academic researcher Howard Edward Haller, management consultant Gifford Pinchot III and the great Steve Jobs, back in the early-to-mid 1980’s.

Several big companies today actively promote intrapreneurship within their organizations, allowing their employees to spend 10%-20% of their time on innovative ideas of their own, that are unrelated to their normal day job.  Companies like Google, 3M and Intel are well known for their efforts in this regard.  Not surprisingly, some of the best performing big companies in the world of business today.  But, they are surely the minority, and more big companies need to get on board here.

The Best Examples of Intrapreneurship Success

Here are several examples of some of the best businesses that were born out of intrapreneurship inside a big company (with Hall of Fame honors to Steve Jobs at Apple, Richard Branson at Virgin and Larry Page and Sergey Brin at Google, for leading serial intrapreneurship successes at their companies):

• Mac, iPod, iTunes, iPhone, iCoud computer inside of Apple
• Gmail, Google News, AdSense, Driveless Cars, Google Glasses and other innovations inside of Google
• The numerous divisions launched by  Virgin (e.g., airline, hotel, casino, books, music, megastore, mobile, wines, games, galactic)
• PlayStation inside of Sony
• Saturn inside of General Motors
• Post-It Notes inside of 3M
• Elixir Guitar Strings inside of W.L. Gore (makers of GoreTex)
• SkunkWorks fighter jet project inside of Lockheed Aircraft
• Java Programming language inside of Sun Microsystems
• Digital Light Processing Technology inside of Texas Instruments

How Big Companies Can Drive Intrapreneurship

If you are a big company looking for innovation, create a culture of intrapreneurship inside your organizations.  Let your employees know it is OK to spend part of their day jobs tinkering around with new ideas.  That it is OK to make mistakes, and that failure will not be punished if things do not go as planned.  Hire people that have entrepreneurship wired into their DNA; leaders who are not afraid to make decisions on their own and take risks.  And, most importantly, stop focusing on next quarter’s profits, and start focusing on the next decade’s worth of revenue growth.

How Employees Can Drive Intrapreneurship

If you are an employee inside a big company, good luck finding a company that is going to let you spread your wings.  So, keep looking, until you do.  And, when you do find that right company, don’t be reactive, sitting back waiting for opportunities to present themselves.  Be proactive; take the lead on whatever great idea that has a chance to become a major future revenue driver for your employer, and pitch it to your management.

At the speed in which change is happening in the business world today, big companies that do not embrace innovation and intrapreneurship will fall by the wayside.  Maybe not right away, but the writing will surely be on the wall.  And, the companies that do embrace it, will surely distance themselves from their competitors and thrive long into the future.

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