Corporate entrepreneurship is vital to the future of every enterprise, but it presents difficult challenges for companies and their entrepreneurial employees. Our research suggests that success comes from managing these unique relationships differently. Nowhere is this more important than when it comes to the entrepreneurs inside your organization.

Corporations and executive recruiters are usually quick to screen out job applicants who they suspect are mavericks—no matter how exceptional their credentials. Fitting well with the prospective employer’s corporate culture has long been a guiding principle of hiring; but does it always serve the best interests of organizations and employees? And, should senior executives use the same management approach for every employee?

Such doubts arose early in my career and grew stronger as my work at various industry‐leading organizations increasingly put me in contact with individuals who, like me, were entrepreneurially inclined. I soon discovered that individuals charged with developing new ventures within established organizations actually have widely divergent levels of talent, job satisfaction, and success.

To better understand the factors that determine success or failure of new ventures in large organizations, we designed and implemented abroad cross‐industry study. What we learned from that inquiry is that developing corporate intrapreneurs is increasingly critical to growth, yet companies know very little about how to develop and harness their capabilities. Our findings shed new light on an opportunity too often overlooked—and even more often misunderstood.

True innovation is essential to every organization’s long‐term vitality. To grow their business, attract new talent, and compete effectively, leading companies continually dedicate key resources to develop new products and services to replace those they will one day lose. Given the critical importance of innovation, then, it is only prudent for management to commit significant resources to the task, and to manage them in ways that will produce the best outcomes.

As logical as this seems, many companies and organizations fail to provide sufficient management attention to the people involved in their innovation endeavors. Instead the focus is on the systems and processes that support innovation, not finding the right people. Such short sightedness, however inadvertent, places their organization’s long‐term future at considerable risk.

Management development programs and career tracks can also work against an organization’s best interests when applied to entrepreneurial individuals. We found that once management deems a corporate venture to have either failed or achieved long‐term viability, the individuals driving the venture are often expected to join, or rejoin, the core business—typically in line positions where rigid procedures, tight budgets, and predictability are the norm.

Or, when a venture succeeds management sometimes leaves them to lead what has become an established enterprise in its own right. This leaves many corporate entrepreneurs unhappy and in want of fresh challenges that will capitalize on their entrepreneurial skills— whether in the present organization or another.

People frequently refer to corporate entrepreneurs as intrapreneurs. We think that management’s preference for this term is evidence of the paradox of being an entrepreneur in an established organization. For many managers the term entrepreneur strongly connotes a maverick, a radical individual, or even the proverbial loose cannon—someone disinclined to adhere to policies and procedures. The term intrapreneur, therefore, may help to distinguish internal entrepreneurs from the more familiar self‐employed variety.

One of the difficulties encountered in studying intrapreneurs is a broad lack of understanding about them. There is no common definition or consensus within the academic and business communities about whom they really are. Instead, we found that organizations frequently apply the attributes of external entrepreneurs to their own intrapreneurs. This is a mistake.

Although entrepreneurs and intrapreneurs share many of the same skills and capabilities, they are different. Intrapreneurs possess a unique combination of competencies that distinguish them from entrepreneurs and more traditional employees. They have different motivations and aspirations. They think, act and make decisions differently. It is these differences that set them apart.

Comparing companies that have a history of success in new venture development with those that have fared less well reveals that a major determinant of success is how management regards and acts toward its entrepreneurial personnel. The management support they give them, the level of work autonomy, the time available to pursue ideas, how they measure and reinforce innovative behavior and to what extent they provide role clarity.

Our analysis of the attitudinal and behavioral differences of these employees suggests there are several changes organizations can make to more effectively foster entrepreneurial behavior. These include the following:

  1. Recognize the unique qualities that intrapreneurs bring to the organization and value them every bit as strongly as you do line managers.  In a very real sense, intrapreneurs hold the keys to the company’s long-term success.
  2. Give intrapreneurs the freedom to experiment, and recognize that frequent trial and error is an inherent part of discovery. Moreover, the freedom to experiment should not be reserved for new ventures and R&D departments, but cultivated throughout the organization—great ideas can emerge from the most unexpected places when given sufficient freedom.
  3. Assign intrapreneurs to your organization’s biggest and most challenging problems—problems with a capacity to truly affect its future.
  4. Encourage innovative and entrepreneurial behavior by financially supporting projects knowing that some of the projects will fail.
  5. Ensure there is role clarity, that expectations are clear and unambiguous with defined outcomes.
  6. Provide decision-making latitude and freedom from excessive oversight by delegating authority and responsibility to intrapreneurs.
  7. Help intrapreneurs to overcome organizational hurdles. They may be adept at navigating such obstacles, but some systems and processes occasionally might need to be altered, or rules bent, if the respective project is to have a meaningful opportunity to succeed.
  8. Provide training and professional development opportunities in key areas of entrepreneurship, such as navigating amidst uncertainty and creative thinking.
  9. Proactively recruit entrepreneurially inclined individuals.

The overarching finding of this study is that long‐term success requires establishing corporate entrepreneurship as a core competency, then nurturing it with the same degree of commitment given to other core business elements.

In brief, this means providing full support that begins at the board and CEO levels. Without top‐level support, intrapreneurs quickly become disenchanted, new ventures languish, and the company’s future grows less certain.

Conversely, when senior management understands, values, cultivates, and manages the organization’s entrepreneurially minded employees they also help assure its long‐term vitality.

What is your organization doing to foster entrepreneurial behavior?

 

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