An “intrapreneurship” program, which empowers employees to act like entrepreneurs by developing new products or services, is an unconventional perk that can help boost productivity and retention.
Intrapreneurship also provides opportunities for career development, which many employees today dream of and determines whether or not to stay with an employer.
The benefits to employees of having the opportunity to engage in entrepreneur-type activities at work are numerous. Investment firm
Randstad emphasizes the opportunity to:
- Test entrepreneurship without the associated risks and costs, and with access to employer-provided resources.
- Shaping the strategic direction of the organization.
- Find motivation and pursue your interests.
Employers also benefit, of course, especially if these intrapreneurship efforts lead to new product or service innovations.
The well-known story of
3M Employees Who Invented Post-it Notes— scientists Sheldon Silver, who developed the unique adhesive, and Art Fry, who came up with the idea of using the adhesive on a little square note — is one of the best-known examples of successful intrapreneurship. Silver and Fry were able to use company time to develop their entrepreneurial strength with company support; the company has benefited – and continues to benefit – from the revenue generated by its product.
“3M’s Post-It Note story is inspiring but can be misleading,” said strategy consultant Andy Binns, co-founder of Boston-based Change Logic. “It encourages us to focus on giving employees time to be creative so they can come up with new ideas.” However, coming up with ideas is the easy part, Binns warned.
More than just “creative time”
The concept of intrapreneurship goes – or should go – far beyond simply coming up with ideas or simply providing “free time” for employees to “be creative”. It also involves establishing processes that can help bring ideas to life in a way that benefits customers and, ultimately, the business.
“Companies that give away ‘free’ time are more likely to waste money and demoralize employees by having them develop ideas that don’t have the opportunity to be implemented,” Binns said. “We call it the ‘innovation zoo’ – lots of people with ideas looking for someone to fund them. What’s harder is incubating them and turning them into something that has a impact.”
Going from a great idea to a marketable product or service involves “testing and learning a lot of trials,” including finding out what innovations customers will appreciate, Binns said.
He cited German multinational engineering and technology company Bosch as an example of an organization that “got really good at it.” Bosch runs programs for employees to learn how to validate their ideas, Binns said. “After 12 weeks, employees are asked if they think their project should go ahead, and 90% of them say no! They learn that what they thought was a good idea didn’t work for clients .”
As a result, the top 10% are much more likely to succeed, he added.
A concrete case
The Escape Game (TEG), a Boston-based company that organizes team building experiences across the United States, has worked to create an atmosphere in which employees are free to innovate and be intrapreneurs. The company has also taken steps to ensure that these ideas, when viable, can be turned into marketable products.
“We take a very collaborative approach to product testing and development that includes participation and input from all departments [at the corporate headquarters] as well as frontline team members in our stores,” said Brian Mandel, Senior Director of Operations at TEG.
During the pandemic, he said, employee creativity had a chance to shine. Their ideas “led to the creation of our now robust digital products,” among other companies, he said.
The key to business innovation is having the drive to disrupt your own business model, said Jay Jayamohan, executive director of the University of Science and Technology’s Center for Innovation and Entrepreneurship. Harrisburg, Pennsylvania. “Make your company a serial innovator by strengthening the innovation muscles,” Jayamohan advised.
He recommends making “quick wins [by] running multiple small projects in parallel to ensure that the best ideas progress quickly and the bad ones fail early.”
Companies can move toward establishing a culture of intrapreneurship by emphasizing design thinking, said Jodi Standke, CEO of talent management firm Talon Performance Group in Minneapolis.
Design thinking is a problem-solving approach that involves exploring a wide range of possible solutions, developing prototypes and testing them repeatedly, and then implementing the finished solutions.
Many organizations, regardless of size, are integrating design thinking into their leadership teams, management and business units, Standke said. “They give groups time to run through the concepts and then give individuals time to… move the ideas forward. For individuals, this can often be rejuvenating, fun, and interesting,” she explained.
Creative and innovative thinking often happens when people aren’t actually thinking, Standke said.
“Companies that really care about innovation should make it known, implement regular open communication times, and not penalize employees for ‘bad’, ‘bad’ or other ideas,” he said. she noted.
That’s a key point — employees need to trust that their ideas will be met with an open mind rather than criticism or censorship, Standke explained.
Reward successes and failures
Recognizing and rewarding success is important to honor employees whose intrapreneurship efforts have been successful. But it’s also important to eliminate any hesitation or fear that employees might have about “failing” or looking “stupid” in front of others because of their ideas. It means celebrating all efforts to innovate and come up with ideas.
Jayamohan recommends creating an infrastructure where “forward failure” is rewarded. “Innovative ideas are, by definition, fraught with risk and counter-intuitive,” he noted.
The focus on intrapreneurship needs to be a company-wide initiative supported from the top down. “Often the best ideas come from unlikely sources, and only a culture of cross-departmental creativity will bring those ideas to light,” Mandel said. This “means that senior leaders must ‘preach’ this mentality at every opportunity and be prepared to invest time in creating opportunities and spaces for people to bring their ideas and feedback to light.”
Who owns employee innovations?
It is important for companies to make clear what will happen to the ideas generated by employees and the revenue generated by the product or service innovations they help generate.
At TEG, Mandel said, “When people come to work with us, it’s understood that all creative contributions are ultimately the property of TEG and are best framed by another core value we have: the teamwork”.
While companies may want to establish some form of monetary recognition or reward for individuals and teams who participate in innovation efforts that lead to tangible business results, there is
evidence suggesting it really isn’t necessary. Instead, what employees value most is formal recognition, social incentives, and freedom to organize—benefits that don’t have to cost organizations dearly.
Lin Grensing-Pophal, SHRM-SCP, is a Wisconsin-based business journalist with HR consulting experience.