3 Reasons Why Companies Fail at Intrapreneurship – and How to Succeed
This blog was originally published in August 2014.
Intrapreneurship, or creating a startup culture within an existing large business, is a fairly well known element in corporate jargon these days. With a new wave of urgency sweeping the corporate landscape and the threat of extinction, it is not surprising that large companies have started looking to intrapreneurship to help them fast track new offerings and explore innovation opportunities. This article is not an effort to describe the merits of intrapreneurship, but instead is aimed at highlighting a few reasons why companies are unsuccessful at inculcating intrapreneurship or startup culture into their normal activities.
We all like to emulate the Apples, Googles and Starbucks of this world, and in desperate attempts to start something new, many companies rush forward in what they claim to be well-thought-out-strategies for successful intrapreneurship. These attempts are often related to mission statements, vision statements, goal setting and trainings.
In this article, I will highlight three major reasons why many attempts by large companies to engender intrapreneurship have ended in failure.
Art versus Science
Developing a sub-culture within a larger organization is difficult, and rushing ahead optimistically without a solid plan will not work. However, the process of engendering intrapreneurship is usually not subjected to the same amount of thoroughness that other processes like financial planning and budgeting are. Until companies begin to see the cultivation of an intrapreneurship culture as a science, they will most likely leave the results of their efforts to serendipity.
The Solution: Intrapreneurship should be managed with a paradigm of causes and effects, inputs and outputs, and planning and scheduling. In other words, building this kind of culture should have its accountability points, dedicated resources, and gates of evaluation. At LinkedIn, for example, employees can propose a new idea once every quarter. They form a team to work on the idea and pitch it to an executive team. They are then given three months to work on the idea and improve its viability. These kinds of processes – coupled with the appropriate enablers, such as an online idea submission portal – provides a method for intrapreneurship and makes it repeatable.
Job Descriptions versus “Job missions”
In the HR parlance of every company, job descriptions are probably the best way to speak about the responsibilities of an individual or group of individuals. The problem is that rarely do we find individuals who have “intrapreneurship” or “creativity” in their job description. Most of the employees in a company are hooked (from entry into the company) to their job descriptions both intellectually and emotionally. Urgencies, deadlines and routines, force the “job description” thinking on people such that they lose sight of what else they could do that could be innovative.
The Solution: In “Making Innovation Part of Everyone’s Job Description,” innovation expert Paul Sloane argues that being busy, efficient and effective is essential. It is necessary but not sufficient. Employee’s jobs should also involve finding radical alternative approaches to getting the job done. Thus, instead of job descriptions, have job visions or job missions. This is a bit different from descriptions as it indirectly provides the space to “make things happen.” Achieving a vision is the combination of both left-brain and right-brain activities; hence, by this subtle change in roles, and by emphasizing visions rather than daily activities, intrapreneurship can be fostered. Read more here:
Thin Slices versus Big Slices
A theory publicized by Malcolm Gladwell in his book “Blink,” thin slicing can be described as focusing on a small part of a dilemma to derive important information, conclusions or knowledge (i.e., when a little bit of knowledge can go a long way). As Gladwell writes, “We live in a world that assumes that the quality of a decision is directly related to the time and effort that went into making it…We believe that we are always better off gathering as much information as possible an depending as much time as possible in deliberation. We really only trust conscious decision making. But there are moments, particularly in times of stress, when haste does not make waste, when our snap judgments and first impressions can offer a much better means of making sense of the world…. decisions made very quickly can be every bit as good as decisions made cautiously and deliberately.”
Applying this theory to startups and business, it can be seen that this ability to use a little knowledge to take action is an essential part of the startup culture. By contrast, the structure, bureaucracy and systems in large companies compel them to take big slices. To test the viability of something new, they subject it to numerous cycles of research, idea killers come up with reasons why it will not work, budgets are reviewed down to the tiniest detail, managers, executives and boards are consulted again and again, etc. You can see how the built-in “big slice” culture slows down innovation and makes the startup culture of taking risks by using a little knowledge seem too uncertain.
The Solution: Companies need to create autonomous business units that can function in the thin-slicing mode. i.e.. rapid prototyping and high speed to market. We have found that the best way to do this is through an acceleration program where the company’s ideas and new concepts are taken through a design, prototype and launch process, just as a new startup company would follow.
While these are real challenges faced by large companies in establishing an intrapreneurship culture, the best proven approach is to break out of the norm, the everyday method of doing things and create a means by which intrapreneurship can be fostered.