Although addressed to you, this memo will be read by your employees, who will begin implementing intrapreneuring with or without your support. It will go better for you and your shareholders if you get involved in building the environment for intrapreneuring.

The young talent you need to drive innovation is not buying the old social contract between corporation and employee. They are demanding work that is personally meaningful, work that is aligned with their environmental values and/or concern for social justice. They expect substantial freedom to make decisions and the opportunity to make major contributions early in their careers.

In essence, they are demanding an intrapreneurial career. If you don’t meet their needs, they will stay with you only long enough to get trained and put your company on their résumé. Many of the best of your older employees have similar attitudes and needs. If their needs are not met they may retire on the job or leave to start their own firm.

Though these independent attitudes do cause problems, if you understand how to manage them, these intrapreneurial attitudes can work strongly in your favor. Your intrapreneurial employees, young and old, can deliver the radical increases in the volume, quality and cost effectiveness of innovation that you need to deal with today’s disruptive economy.

How serious is the need for intrapreneurs today?

  1. Almost every industry is being or will soon be disrupted by exponentially evolving technologies such as artificial intelligence, machine learning, genetics, nanotechnology, 3D printing, robotics, online learning, online marketing and social networking. According to Deloitte, “In the next ten years 50% of the S&P 500 will be replaced by digital disrupters.” The new game is disrupt your industry or be disrupted. Don’t be roadkill.
  2. Acquisition has proved to be no substitute for internal innovation. Two years after I sold our software business for $2.3 million dollars per employee, not one of my former employees was still working for the acquiring company. Unless you can maintain an intrapreneurial culture in the businesses you buy, their value declines rapidly.
  3. The world is unstable. Natural disasters such as hurricanes, flooding and droughts are increasing. There are increasing numbers of failed states. Subcultures are changing rapidly. You will need people close to the ground in many geographies and many subcultures to read what is going on and respond rapidly and creatively. This means empowering yet more intrapreneurs.
  4. Big companies now innovate in partnership with startups and other entrepreneur-led firms.  To co-innovate with entrepreneurial firms you need to come close to matching their ability to experiment, learn and change at warp speed. You can only be an effective partner to entrepreneurial firms if the relationships are managed on your side by intrapreneurs who are free to act rapidly without being second guessed by bureaucrats.

So what can you do?

You may think you can get breakthrough rates of innovation through suggestion programs, stage gate processes or the like.

You can’t.

Dr. William Souder spent ten years studying 289 innovations in 53 different companies hoping to discover a process that could drive innovation success. He could not find one. Instead his primary conclusion was, “The intrapreneur is an essential ingredient in every innovation.” The system inevitably resists innovations that take resources from or threaten to replace the existing ways of delivering value to customers. Significant innovation only happens when a committed team of intrapreneurs drives the innovation though all the barriers, failures, mistakes and seizing of emerging opportunities that mark the intrapreneurial journey.

It is not the right process that makes an organization innovative. It’s the close and trusting relationships between self-motivated intrapreneurs and their management sponsors that moves innovations forward through the inevitable resistance of any corporate system. Sponsors coach the intrapreneurial teams, protect them and help them access resources. Good sponsors can recognize the real intrapreneurs from the “promoters,” who look and sound good, but don’t get the job done.

Creating an intrapreneurial organization will not only give you a major competitive advantage and profitable growth, it will also create the legacy of happy, deeply engaged employees, suppliers and partners committed to your company’s well being. As a side benefit it will also make a large positive impact on society’s major problems. In total, this is a legacy that Wall Street will celebrate and, at the same time one you can be proud to explain to your grandchildren.

 

This article is the first in a series of memos to the different stakeholders of intrapreneurship. Stay tuned for the memo to middle managers, millennials, women intrapreneurs and older intrapreneurs.  

 

Gifford Pinchot III is an American entrepreneur, author, inventor, and President of Pinchot & Company. Gifford is credited with inventing the concept of and word “intrapreneur” in a paper that he and his wife, Elizabeth Pinchot, wrote in 1978 titled Intra-Corporate Entrepreneurship. His first book, Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur (1985) presented an expansion of the intrapreneurship concept.