A few months ago Paul O’Connor from the The Adept Group asked some very interesting and insightful questions about Intrapreneurship. Why did intrapreneurship die in its initial roll out back in the 1980’s and why will it stick now? What has changed outside of intrapreneurship and inside of intrapreneurship now, in 2016, to enable it to endure?
Answering these questions may be the key to its survival NOW and into the FUTURE.
Intrapreneurship was introduced to the business world in the 1980’s by Gifford Pinchot, author of the international bestselling book Intrapreneuring. At the time Intrapreneurship was competing with a number of other management practices and approaches. The evolution of Quality Control to Total Quality Management, the growing demand for Corporate Strategy and Organization consulting, the development of the Stage-Gate Process for Product Development, and the Organizational Development focus on structure versus behavior, performance versus people. These were only a few of the management concepts competing for management attention.
The overall goal of Intrapreneurship was new business growth but there was a difference of opinion in how to achieve that goal in the academic and business world. The academic world took a more systems view – a companywide perspective. While the corporate world looked at innovation as the means to accomplish this goal – more of a practical, process perspective. These two different perspectives blurred the lines between innovation and intrapreneurship – the words were often used interchangeably. Although people and culture were always part of the discussion, the challenge was how to change culture and all that goes along with culture to foster ongoing innovation.
Intrapreneurship was proposed as the answer to this challenge because it focused on getting things done. Organizations like 3M and DuPont sent hundreds of people through Intrapreneurship training. Gifford Pinchot’s lectures were packed. Whole new groups were set up inside some organizations. The individuals that had invested part of their careers in this action-oriented approach soon found out that things did not work out well for them. Intrapreneurs were, in hindsight, entrepreneurs in training.
It is important to acknowledge that Intrapreneurship existed before and it failed. We tend to ignore that fact, especially given the growing demand and desire for intrapreneurship today. Unless we unravel the reasons why it failed we may not understand how to support it now and in the future.
In looking back the 1980’s was a decade of great socioeconomic change due to advances in technology and the growth of globalization. The United States had rebounded from a recession and began a sustained period of economic growth. Japan and West German saw large economic growth while many developing countries faced economic and social difficulties. The AIDS epidemic became widely recognized, there was widespread famine in Ethiopia, and the scientific and political community warmed us of the effects of global warming. The world saw major civil discontent and violence throughout the Middle East, nationalism in the Eastern Bloc and a desire for democracy in communist-led socialist states. This period also gave us great advances in digital and genetic technology, the internet became a global system and television viewing became commonplace in the third world. The 1980’s also gave birth to a new generation – the millennials.
The 1980’s were a time of economic growth. Globalization increased in the developing world and corporations relocated their manufacturing facilities into Thailand, Mexico, and China. Emerging economies were growing which opened up new opportunities – new markets and customers. Extending and repackaging existing products for these markets provided new revenue opportunity and growth. Product development processes improved and new products could be brought to market more quickly. Incremental innovation was key to driving growth. Disruptive innovation was not yet on the radar.
It was also a period of significant growth in the management consulting business dominated by the “Big Five”. Consulting services had expanded beyond the traditional accounting and auditing services. The consulting firms organized themselves around a number of different consulting practices bringing their own proprietary methodologies and frameworks to clients. Much of their growth was driven by the demand for strategy and information technology advice. For years the main focus was on strategy – less on implementation. Intrapreneurship was all about strategy, execution and implementation.
The workforce of the 1980’s was dominated by the baby boom generation. Women started entering the workforce in greater numbers. The workforce was becoming more diverse. The proportion of the employed workforce that was foreign born had increased. The impact of globalization resulted in a decline in manufacturing and the growth in the service economy. The shift to an information and technology based economy was effecting all workers. Computer technology was enhancing productivity and changing the way organizations operated. Workers were organized into teams, had more decision making authority and received more specialized training. Keep in mind that this was the age of the liberal, hippy, age of Aquarius, baby boomer generation that had ousted the proverbial “organization man”.
The changing business landscape was impacting the way large corporations were being managed. During this period Jack Welch was CEO of General Electric (GE). “Under his leadership, GE increased market value from $12 billion in 1981 to $280 billion, making 600 acquisitions while shifting into emerging markets. Welch pioneered a policy of informality at the work place, allowing all employees to have a small business experience at a large corporation. Welch worked to eradicate perceived inefficiency by trimming inventories and dismantling the bureaucracy. He closed factories, reduced pay rolls and cut lackluster units. Welch’s public philosophy was that a company should be either No. 1 or No. 2 in a particular industry, or else leave it completely.”1
At the same time organizations were experimenting with skunk works. The designation “skunk works” was used in business, engineering, and technical fields to describe a group within an organization given a high degree of autonomy and unhampered by bureaucracy, tasked with working on advanced or secret projects. As a registered trademark of Lockheed Martin, the idea of skunk works was adopted by a number of large companies in the 1980’s including IBM, Texas Instrument and Apple. According to Marc Winn in his article The Skunk Works, “In the early 1980s, Steve Jobs leased a building behind a restaurant in Silicon Valley, installed twenty brilliant designers, and created the first Macintosh computer.” In 1985 Time Magazine popularized the term intrapreneurship in its article, “Here come the Intrapreneurs”.
Perhaps this gives you some insight into what was happening in the 1980’s. It does not address the reason why intrapreneurship died. It only sets the context for understanding some of the factors that may have contributed to its demise.
We want to know why you think Intrapreneurship did not survive in the 1980’s.
Here are some of our thoughts to get you started.
- Intrapreneurship failed to cause the necessary organizational change needed to enable it to survive.
- Structures, behaviors, and culture had to change more than they did for intrapreneurship to be sustainable.
- Organizational barriers and obstacles were large and more complex than anticipated.
- Intrapreneurs were limited in their ability to use organizational resources freely.
- Growth was more about driving existing products into new emerging markets.
- Perhaps the principles touted by Pinchot in the Intrapreneurs Ten Commandments were not realistic given the business environment.
Let us know what you think.
In our next article we will look at Intrapreneurship NOW and what has changed that might make intrapreneurship more enduring today and into the future.
Paul O’Connor contributor to this article.
1 GE History