Well if you can't beat 'em

Intrapreneurship – being entrepreneurial from the inside of an already-large business – isn’t just a buzzword. It’s a potentially powerful way to disrupt your markets. But, says journalist and broadcaster Stephen Pritchard, the process has to be managed with care.

From Virgin Media Business’ own #VOOM competition to Dragons' Den and Silicon Roundabout, startups and entrepreneurship are on a roll. Company founders are treated like rock stars, and ambitious young graduates are choosing new businesses over established employers. The UK Government even has an Entrepreneur-in-Residence.

But are conventional businesses being left behind?

"Big and established companies can be and have to be entrepreneurial – and reinvent themselves to continue to thrive," says Peter Sayburn, co-founder at Market Gravity, a business consulting firm specialising in innovation. "Every big company has a million great ideas, but it can be really hard to get them out to market."

Copying the ways of a startup is, though, no guarantee of success. Startups are small, agile and can make use of cutting edge technology. The best startups are very focused on their products, and their founders are passionate about what they do.

Passion, and a focus on products, are important in an established business too. But companies need to be wary of trying too hard to behave like a startup.

"It's extremely hard for early stage startups to contribute anything to corporate environments or strategy," warns Mike Butcher, editor at large, at TechCrunch, the technology website. "Either they are trying to kill you or kill one of your products."

Startup founders, for their part, may not fit well into a corporate environment, not least because founders may have started a business exactly because they feel corporate culture is not for them.

Instead, innovative companies need their own breed of specialists, who can draw on the skills of entrepreneurs, and apply them to a large business environment. These are the corporate entrepreneurs, or intrapreneurs. Companies that already have these specialists include 3M, GE, Intel and Xerox, says Market Gravity's Sayburn.

Being an intrapreneur is sometimes called the best job in the world, as it combines ideas and innovation with the resources and support of a large organisation. But a successful intrapreneur is not just an ideas person. He or she has to be an advocate, a negotiator, and a diplomat. The intrapreneur needs to be resilient, too.

Intrapreneurship can be rewarding, but without the right support, it can be a lonely role. "You don't want to be the only person in the office in jeans and trainers – everyone has to be involved," advises says Samad Masood, Open Innovation Lead for the UK and Ireland at consulting firm Accenture.

And the organisation itself needs to be open to change.

"You can bring entrepreneurs in from outside and put them in the organisation but if it is anti-entrepreneur, and very rigid in its structure for approvals and communications they will quickly run out of steam," says Dimo Dimov, Professor of Entrepreneurship and Innovation at the University of Bath. "They have to turn problems into opportunities."

Intrapreneurs can come from within the business, from the startup or venture capital world, or from acquisitions. Often, successful intrapreneurs have a consulting background, and are used to working on projects and to dealing with change.

For its part, the organisation employing an intrapreneur needs to think about its product development lifecycle and especially, its decision making process. Startups have very lean management structures. A large business can easily stifle intrapreneurs through slow chains of command, and too much bureaucracy Prof Dimov warns.

And at the other end of the spectrum, a business can also starve a new venture of the support it needs to scale up. According to Market Gravity's Peter Sayburn, this can happen when a new product or service is cut off from the parent business' sales and other service. A good intrapreneurial project, on the other hand, is given the freedom to develop the idea, but has the full weight of the business behind it when the time comes to go to market.

Company boards, though, can be forgiven for being wary of intrapreneurs and innovation. Startups may be popular, but boards have to balance the need to innovate, and to the business' future, with the need to deliver revenues and profits today.

It is all too easy to see innovation as a waste of time and resources, especially if the focus there is on cultural or technology change – long-term bets which might not immediately contribute to the bottom line.

"It doesn't have to be a distraction if you plan it right," says Accenture's Samad Masood. "If you say you just want to look like a startup with soft furnishings, people bringing in their pets and with free-flowing beer on tap, that is a distraction. It is about how the organisation is going to survive in the future and what changes you need to make now."

The role of the intrapreneur, or internal innovator, is critical to NGA Human Resources, an outsourcing and technology development business, focused on HR tools.

NGA Human Resources is a sizeable operation, with 8,500 staff worldwide. But it is critical for the UK arm to retain its entrepreneurial spark, despite the complexities of operating within a global enterprise.

"I make a lot of use of virtual teams," says Legdon. "I find putting people in darkened rooms to come up with new ideas is not always the best way. Mixing people with different ages and backgrounds helps in terms of bringing forward disruptive ideas."

However, it is not essential for intrapreneurs to have industry-specific knowledge, even in a specialist field, such as HR technology. "We might prefer people who know how to crowd-source ideas, or how to innovate in working processes," Legdon suggests.

"The greatest payback often comes from thinking differently. Innovators needn't be from a payroll or HR background. We have lots of people with 25 years' experience in HR but we also want people who don't have that baggage, but have a track record of bringing new ideas out of people, and help to develop them into revenues and profit."

There is, though, the need to strike a balance between the innovators and those tasked with delivering profits today.

"You have to have people being disruptive, and people doing the daily grind. They are doing the tough task of running the day-to-day business, so you have to balance the skill sets," he says. It is important to avoid making people involved in the daily business feel they are relegated to the "dull stuff", even as others are given the chance to try new ideas.

For this reason, the intrapreneur needs to be a team worker as well as resilient and able to take knocks. A passion for innovation alone is not enough to succeed in a corporate environment. Innovators need to be able to work with the business, and be adept at drawing good ideas out of other people.

"One of my key innovators has a huge amount of energy but she is also hugely collaborative," explains Legdon. "She encourages people to bring ideas forward, and she is a starter-finisher. She doesn't care if they are not her ideas. Her payback is seeing the ideas come to fruition, turning something colleagues come up with into reality."

Being a successful innovator is, Legdon says, as much about opening doors, and having the ear of the board, as it is about having ideas of your own. Sometimes large organisations will be resistant to change – so an intrapreneur needs to have the confidence and determination to press the case for the innovations that will help the business to survive.

Look out for the third part in the series coming soon.