CHAPTER 5

Culture for Nurturing Intrapreneurs

Have you ever led a meeting in which, after speaking for 45 minutes, you invited your team to suggest ideas? You waited. There was complete silence in the room. For a minute, no one said anything. People avoided eye contact with each other and tried their best not to make a sound. After slightly more than a minute, you could not bear it anymore and ended the meeting. People were relieved and left.

In her book The Fearless Organization, Amy C. Edmondson discusses employees who fail to speak up due to fear.¹ She referred to that as the dangerous silence. Dangerous silence is often observed in large organizations when employees are not willing to tell truths, offer suggestions, or give an opinion.

It could be caused by different reasons: Your employees think you are the one who decides everything, they don’t care, they don’t think that their voice matters, they don’t think that you can make ideas happen, and so on. Listen to the dangerous silence—it is a call to leaders saying it’s time to fix the culture.

I worked as an innovation coach in a large corporation. When I landed my job, one of my tasks was to make innovation mainstream. I was hired to encourage employees to innovate more routinely, instead of just focusing on business as usual. To understand the current state of the corporation, I participated in various meetings to observe the dynamic. I have seen dangerous silence quite often in multiple settings.

Eager to understand why and how it developed, I approached a diligent member of staff, Fred (not his real name). Fred was a dedicated, engaged employee whose performance was outstanding and who was excellent when it came to customer relationships. He delivered a great performance in project work but was always silent during meetings. I had built trust with him over some work engagements so I reached out to him and had a one-to-one chat. I asked him for his thoughts on the topic the team discussed in the earlier meeting.

Fred felt that the current plan for the new product would not work, based on his interaction with customers. I asked what he observed from the customer interaction. He slowly opened up and shared his ideas on how to resolve the problem. I was excited to hear them and, from the conversation, Fred sounded like a potential intrapreneur who had great ideas to contribute and create value for the company.

But still, I wondered why he didn’t say a word during the meeting. Fred did not take a second and replied with a laugh, “Well, I have a 3-year-old kid.” I was confused. How is not contributing idea associated with having a kid? I asked him to walk me through his thought process. Fred paused, searching for the link he made from one thing to another. He said,

I have a 3-year-old kid; I cannot risk my job. I am not sure whether my boss welcomes my ideas. Maybe my idea was not that great—I don’t want to embarrass myself. I am not sure if the idea would work. If it doesn’t work out, it might backfire on me. So why should I bother?

I sat there digesting his words. I realized that this was a pattern that Fred goes through in his mind every time he has an idea. Fred became so familiar with this logic that it didn’t even take him two seconds to run through it and tell himself to swallow that idea down his throat.

Why should you, as a corporate leader, care what Fred thinks? Because when you have one Fred in your organization, you lose the brilliant ideas of one person. But if you have 20,000 Freds, you have a culture of Freds, and that in fact is the culture of fear.

Culture of Fear: The Thief of Innovation

Everything you want is on the other side of fear.

—Jack Canfield

Many people have experienced culture of fear in their organizations, especially in large, complex corporations. Living in a culture of fear, people are uptight and afraid of making mistakes. All the focus is on execution according to the rules, without deviation, as failure is almost not acceptable. The culture of fear makes employees focus on survival by achieving their daily goals. New ideas, which come with uncertainty, are simply not appreciated.

Somehow Fred, in his statement, spelled out the reason that leads to the culture of fear. Let’s break it down.

I am not sure whether my boss welcomes my ideas.

Fear of Disapproval

Employees are afraid to speak because they are concerned about the response they will get from their boss. It could be due to previous experience if employees have received cold or hostile feedback on ideas they have raised in the past. But it does not always take an actual experience to form this fear. When the management culture is strong on opinions, intimidating, or disapproving, it could also make people feel that any idea will not be welcomed and so they decide to keep their heads down.

Maybe my idea was not that great. I don’t want to embarrass myself.

Fear of Not Being Good Enough

Some employees have low self-esteem and are not confident about their idea, no matter how good their idea is. They could be asking themselves, if this idea is so great, then how come no one thought about it? They think that they are not in a position to suggest good ideas as they are not experts in the field nor are they smart ones. They worry about how others will view them and their idea if their idea sounds stupid to others. Aside from the employee’s characteristics, this could also be caused by some past incident of being dismissed or belittled by people working with them.

I am not sure whether my idea works.

Fear of Uncertainty

In the Harvard Business Review article “Why Employees Are Afraid to Speak,” James R. Detert and Amy C. Edmondson interviewed around 200 employees from all levels and functions of a leading high-technology corporation.² The corporation had numerous formal feedback mechanisms, including an ombudsperson and a grievance procedure, to proactively encourage people to speak up about problems. Yet the interview results showed that half of the employees felt it was not safe to speak up or challenge traditional ways of doing things. The findings also revealed that the perceived risks of speaking up felt very personal and immediate to employees, whereas the possible future benefit to the organization from sharing their ideas was uncertain. To play it safe, people tended to keep their mouths shut.

It might backfire on me so why should I bother?

Fear of Punishment

This is about the motivation of innovation. As a corporate leader, you might think that your employees are asking, “Would I be rewarded for coming up with new ideas?” Well, your employee’s question in fact might be “Am I going to be punished if my idea does not work?” Pitching new ideas takes courage and it can put you at risk. If you think about it from your employees’ perspective, it all makes sense. I have dedicated my time and effort to doing something that is beyond my work scope and I don’t even know whether it will succeed. Will my manager see it as a waste of my time? If it does not work out, how is it going to affect my performance review? The employees would only be willing to expose the idea if they feel confident and safe in the environment.

Does Your Corporation Have a Culture of Fear?

As a corporate leader, it might not be easy for you to spot a culture of fear, even if it is happening under your nose. Many leaders have mistakenly recognized the culture of fear as a strong alignment in the organization. If you want to find out whether your corporation is operating under a culture of fear, ask yourself the below questions.

Are you Always Surrounded by “Yes Men”?

You might think that you have done an amazing job because people working for you always say yes to you. You think that you are smarter than them so they have to listen to you. They always agree to your ideas simply because your ideas are better. That might not be true. It could be that your people know that you do not like to be challenged. They might think that you have decided on your own way, so why should they bother? Or it could be that, over time, you have unintentionally chosen to be surrounded only by people who say yes to you. Malcolm Gladwell highlighted in his insightful book Outliers: The Story of Success that having people on teams or in organizations who are afraid to challenge each other can be extremely detrimental and even deadly.³

Are you Talking 75 Percent of the Time or More During Meetings?

Sometimes leaders are eager to share their vision and strategy with the team. They want the team to know what they are trying to achieve and how they think it should be achieved. Communication is good. But oneway communication is not. If you notice that you are the one who is doing most of the talking, you might be a terrible meeting lead. Over time, your employees might just assume that you will do all the talking and they will become disengaged. Notice the dynamics next time you walk into a meeting.

Do Your Employees Only Do Things by the Book?

When was the last time you saw an employee come up with a new way of doing things? Does that happen often in the company? Or are people only doing the same thing in the same way? When you talk to your team, notice how they mention rules and policies. It is good that they value rules in the workplace as they keep an operation organized. But overemphasizing it could become mechanical and paralyze thinking, as people are concerned about the consequences of breaking the rules. Your employees might follow the rules without understanding them. Review whether you have implemented a lot of unnecessary rules. Having too many of those can discourage people to think outside the box.

Create the Culture for Intrapreneurship

Amazon is probably the company that is most famous for its obsession with customers. Jeff Bezos ranks customer obsession as the number one leadership principle at Amazon.⁴ The principle reads, “Leaders start with the customer and work backward. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.” Amazon even implemented meetings with an empty chair reserved for the customer so that employees always have customers in mind during the meeting.⁵ Customers should be your corporation’s most important stakeholders. Each employee, no matter whether they are front, middle, or back office (even those who do not have direct contact with customers), should always have the customer in mind when they carry out their job. Every decision should put the interests of the customer first. You can start creating customer obsession in your organization by doing the following.

Incorporate Customer Obsession Into Your Principles

Does your corporation have a set of principles in place? Review those principles. Is the customer part of the content? Do your principles emphasize that the customer is at the center of everything? Your leadership principles represent the core values of your corporation. They help the employees to understand what the corporation stands for and what takes priority when a decision is to be made. Include customers in your principles and widely communicate them with your employees. Here are some examples:⁶

• Google’s company philosophy #1: Focus on the user and all else will follow.

• HubSpot culture code #2: We obsess over customers, not competitors.

• Uber cultural norms #2: We are customer-obsessed.⁷

Capture Data-Driven Customer Insights

Conventionally, companies use demographics to segment their customers by age, gender, income, occupation, location, and so on. Each segment is assigned with an overgeneralized set of characteristics and typical preferences. In the age of Industry 5.0, data are much more available and keep growing. With abundant data, you can get to know each of your customers in more depth. Data give you a full, transparent, and unbiased picture of your customer.

It really doesn’t matter if you are a 60-year-old woman or a 20-year-old man because a 20-year-old man can watch Say Yes To The Dress and a 60-year-old woman could watch Hellboy.

—Todd Yellin, VP of Product Innovation at Netflix⁸

Data can be either quantitative or qualitative. Quantitative data are often easier to be discovered and analyzed. However, qualitative data are equally important for understanding customers. Unlike quantitative data, qualitative data might not offer you direct numerical value. Qualitative data are more narrative. They offer you patterns and insights into more complicated questions. Qualitative data provide you with a more comprehensive picture of your customers’ behavior. They also offer you the opportunity to understand how your customers make their decisions and the reason for their behaviors. If you want to build data-driven client-centricity, try the following step-by-step approach:

1. Map out the customer journey with each touchpoint.

2. Every touchpoint with the customers presents a data opportunity. Understand what data are associated with the touchpoint.

3. Decide what data would be meaningful for you to understand the client better.

4. Capture the selected data points continuously and review them regularly for insights.

5. Adjust your strategy, products, and customer service based on the data insights.

Share and Celebrate Customer Stories

A story is a powerful communication tool that you can use to influence and inspire people. Strong stories help people connect. Discover the real stories of how your product or service changes a customer’s life or day. Tell those authentic stories to your employees and celebrate success. Stories bring corporate purpose to life.¹¹ By sharing stories, employees feel that their work impacts real people. It also inspires other employees to take action that aligns with similar values.

Starbucks has been doing a phenomenal job sharing its customer stories. It has created a platform, Starbucks Stories And News, and made it available not only to employees but also to the public as a great marketing tool.¹² One of the stories that went viral really touched me. Krystal Payne joined the Starbucks store in Leesburg, Virginia, in 2016 and she noticed a frequent customer, Ibby Piracha, looking frustrated as he tried to place an order. Piracha is deaf.¹³ Piracha generally places beverage orders by typing them into his phone and showing the barista. Krystal wanted to do something more to make him feel more welcomed. She came up with an idea—to learn and practice American Sign Language (ASL) outside of her work hours. She finally mastered the relevant signs and one day when Ibby walked into the store, she wrote him a note that said, “I’ve been learning ASL just so you can have the same experience as everyone else.” Piracha offered a smile of appreciation for Payne, who proceeded to make the beverage he ordered. It might not be a life-changing experience for the customer but it certainly created a delightful moment. If you keep celebrating these extra miles that your employees go for customers, it helps other employees to understand the priorities of your corporation.

If you want your team to innovate, you need to create a culture of intellectual bravery, in which members are willing to disagree, dissent, or challenge the status quo even when they risk being embarrassed, marginalized, or punished. This doesn’t happen overnight. Rather, employees must go through several stages along the way to that point.

In his book The 4 Stages of Psychological Safety: Defining the Path to Inclusion and Innovation, Timothy R. Clark broke down the stages required for people to feel psychologically safe. They have to feel (1) included, (2) safe to learn, (3) safe to contribute, and (4) safe to challenge the status quo.¹⁴ Innovation happens when stage 4, challenging the status quo, is achieved. To get there, a leader has to help the team increase intellectual friction and decrease social friction.

Watch Your Body Language

Have you ever worked for a leader with a strong power of authority who allowed no one to challenge them? There was just such a senior managing director with whom I worked in my previous career. She had more than 30 years of experience in the industry and was highly respected. Her experience, knowledge, and network made her think that she was always right. At that time, I was a middle-level staff member at the company, reporting to a director, and this managing director was my manager’s supervisor. She made it clear to her one-downs that, in her meetings, no one except her one-downs should speak. I was told by my manager that I was in no position to provide any comment or feedback. Even when her one-downs spoke, they were mostly interrupted or cut short by her and were told that their opinions were wrong. After a few encounters, no one even made the effort to express an opinion different from hers. A year later, most of the team members had left the company.

Some leaders might not realize that small gestures can create fear. Interrupting someone in the conversation, tapping your fingers on the table, rolling your eyes, looking at your watch, or ignoring someone during a meeting can send dismissive signals. These gestures can make people feel belittled. Sensing that they are not the ones in power, they retreat into silence and hold back from sharing their thoughts. Figure 5.1 shows examples of dismissive body language that leaders should avoid.

Invite in a Way That People Can Respond

To help your employees to participate or contribute ideas, leaders need to invite and offer them the opportunity. Some leaders would say, “I have already asked over and over again whether anyone has an opinion. It’s just that no one responded.” I do not doubt that those leaders have asked the question, but how they asked also matters. First, the invitation needs to be genuine. To start with, when you invite participation, it has to be sincere. Acknowledge that you do not have all the answers in the world and be humble to learn from your employees. When your employees contribute their opinions, listen with patience. Recognize opinions positively and acknowledge the person’s effort. Ask incisive questions to clarify the idea, help build it further, or connect the dots with others with similar initiatives. Examples of the invitation could be:

Figure 5.1 Examples of dismissive body language¹⁵

• I am not an expert in this area. Does anyone here have experience or knowledge of it?

• We can all learn together by sharing information and past learnings.

• I appreciate your honest feedback. Do you have any suggestions of how we might address this?

• That is a good idea! How can we help develop it further?

• The idea is interesting. It helps address some of the problems we have. Can I clarify how it works?

It will not be an overnight process. People need to build trust with leaders to open up. The leader’s job is to provide a safe space for them to respond and contribute.

Build Inclusion

For intellectual bravery to happen, people first need to feel that they are included. You might be asking, “How could they not feel included since we belong to the same corporation?” Being in the same company and feeling included are not the same thing. Feeling included is not just about having an access pass that allows you to walk through the door and more about the social signals you get from people around you. Can you recall an experience of feeling excluded? A teacher ignored your point of view, a boss called your idea silly, or your team went for drinks without inviting you. All these experiences make the person feel small and would also make them close up as they think they don’t belong to the group.

When people feel that they are included, they know that they have a seat at the table and that their voice will be heard. According to a Salesforce report,¹⁶ “The Impact of Equality and Values Driven Business,” employees who feel their voice is heard at work are nearly five times (4.6×) more likely to feel empowered to perform their best work. Inclusivity has other benefits as well. In Bersin by Deloitte 2015 High-Impact Talent Management research, Josh Bersin surveyed and interviewed more than 450 global companies to identify their level of maturity in a wide variety of talent practices. It is found that more inclusive companies were 1.8 times more likely to be change-ready and 1.7 times more likely to be innovation leaders in their market.

As a leader, you might not be able to observe all exclusions that are happening in the workplace all the time. What you can do is to start to understand what inclusion means to your corporation, be the role model of inclusion, and start building inclusive. Here are a few things that you can do:

• Be aware that everyone has an unconscious bias.

• Notice who has not spoken during the meeting and invite them to contribute.

• Show respect to others’ ideas.

• Admit that you might not always be right. Apologize if you make a mistake.

• Avoid jumping to your conclusion too fast.

• To further build inclusion organizationwide, consider inclusion training to educate your people managers.

Communicate Openly and Consistently About Innovation

Communication is an important foundation for innovation. Your employees need to understand your corporate strategy and focus to make a meaningful contribution. Every meeting, every town hall, and every newsletter is a great opportunity for leaders to openly talk about innovation in the organization. Corporate leaders need to communicate regularly about:

1. Their long-term commitment to innovation.

2. Why innovation is important?

3. Why do they want the employees to be part of the innovation force?

4. What kind of innovation they would like to focus their energy on?

5. The assets that the corporation can provide to accelerate innovation.

The communication should be consistent for both internal and external audiences. If the message that employees get internally is different from what they see in the public, it creates a discrepancy. Employees could start to question the leaders’ commitment and discount the internal message. Make sure your external marketing message is aligned with your message to staff.

Encourage Wide Collaboration

Silos usually occur in a large organization. Employees are given a set of tasks and they interact with the people those tasks require them to. And yet collaboration is a key element of sparking innovation. In Google’s report “Working Better Together,” the company surveyed senior staff and C-suite executives from over 250 companies representing a wide range of business sectors and sizes.¹⁸ An overwhelming 73 percent of respondents agreed that their organization would be more successful if employees were able to work in more flexible and collaborative ways. Some 56 percent of respondents ranked a collaboration-related measure as the number one factor impacting their organization’s profitability.

The number of collaborators is important too. Nielsen’s report, “How Collaboration Drives Innovation Success,” claimed a positive relationship between the number of people actively working on a new product idea and its performance with consumers.¹⁹ Ideas developed by teams of three or more people have 156 percent greater appeal to consumers than those developed by teams where just one or two people played a hands-on role. The report also found that organizations that consistently achieve high levels of collaboration on product concepts can substantially improve their competitive advantage and revenue.

Wide collaboration enables people from different backgrounds and skillset to meet each other. During their interaction, they share information, exchange experiences, and form new ways of thinking. Wide collaboration can be achieved by crossing teams, units, departments, functions, and geographies. However, wide collaboration is more than simply “cooperating more with other teams.”²⁰ It requires a shared mission, trust, and understanding of different people’s roles in the work involved.

As leaders, here are some ways you can encourage your employees to collaborate more:

• Build a compelling shared cause: In psychologist Sherrie Campbell’s Entrepreneur article, “10 Simple Ways to Build a Collaborative, Successful Work Environment,” she pointed out that team members must be provided with a compelling reason to be part of the company’s mission.²¹ Give your people a clear mission and they will be as passionate and involved as the leaders are. Refer to “Incorporate Customer Obsession in Your Principles” in this chapter to discover what drives your corporate mission and what problems you are solving for your customers. Share your customer stories with your employees and emphasize the impact of the work that they are doing.

• Bring people together to solve problems: Provide your employees with the opportunity to practice working with other people outside their own teams. You can do so by incorporating problem-solving exercises (not just team building but real problems that the organization faces) as part of the talent and leadership development program for participants to work together. During new project formation, try to include employees of different departments to cut across the silos. You can also host hackathons and innovation challenges to offer a collaboration experience. Collaboration behavior will take some time to cultivate. Once employees experience the benefits of collaborating, they will do it more naturally.

• Create a virtual platform for people to connect: In large corporations, people usually have lower visibility into what other teams are doing. There might be teams working on a similar initiative, using similar technology, or exploring related concepts but others don’t know about it. Without knowing what other teams are up to, it is challenging to keep looking around to find connections blindly. Technology has made it easier today for people to connect despite their location and physical barriers. With a virtual platform, people can connect, share information and best practices, and exchange ideas. Virtual platforms can come in different shapes and forms. I have seen examples such as project portfolios broadcast by teams, regular cross-team sharing sessions, discussion boards, and idea-sharing platforms. Maintaining platforms to ensure robust dynamics requires effort. I have seen good connections formed from some successful platforms. It usually happens in interactive sessions in which people shared what they were doing and other teams discovered connections to their work. On the other hand, I have also seen many examples that failed to serve the purpose and lose traction over time. Reasons for this include lack of up-to-date content or regular maintenance, an unfriendly design with no interaction, and a lack of leadership and diligent execution. If you build a platform for people to connect, make sure you oversee the traffic and follow through with what has to be done to maintain the platform’s robustness.

Be Open About Intelligent Failure

The fastest way to succeed is to double your failure rate.

—IBM’s Thomas Watson, Sr.

Most leaders and managers do not feel comfortable hearing the word failure. They try their best not to cause any failure in their work and if something happens, it’s best not to talk about it. But not all failures are created equal, as Amy C. Edmondson, the Novartis Professor of Leadership at Harvard Business School, discovered. She studied the wisdom of learnings from failures for over 20 years in organizations across industries including pharmaceutical, financial services, product design, telecommunications and construction companies, hospitals, and NASA’s space shuttle program.

Edmondson found that for organizations that have not been performing well, their managers look at failures the wrong way. There are millions of things that can go wrong in organizations but the reasons for failure are broadly categorized across a spectrum between blameworthy and praiseworthy.²² Let’s look at the different types of failure and what can be learned from each type.

Failures Due to Mistakes

On the side of blameworthy are failures due to deviance, inattention, lack of ability, and process inadequacy. Most of these failures are considered “bad” failures because in these scenarios there are tightly defined policies, procedures, and processes to prevent them from happening. With proper training and support, employees should be able to follow them consistently. In the case of failure, the cause can be traced, spotted readily, and rectified. With these failures, learnings are continual but limited as they mostly do not involve major breakthroughs.

Unavoidable Failures in Complex Systems

In the middle of the spectrum are failures in complex systems, including task challenges and process complexity. These happen from time to time when there is uncertainty involved in the work, for example, when a new group of team members is put together, a new situation occurs, and new needs from customers arise. These failures are almost like perpetual risks that are unavoidable in complex organizations. They are counterproductive but not necessarily bad.

Intelligent Failures

Toward the other end of the scale are failures due to uncertainty, hypothesis testing, and exploratory testing. Failures in this category are considered “good.” These are the failures that offer tremendous learning opportunities and potential growth for the organization. They occur because people are finding new ways of doing things and experimentation is necessary. Experiments come with inherent risk and uncertainty. Every new invention, a new formula, new business model, and new product requires experimentation. With each failure, the innovators are a step closer to the outcome they are looking for, and it is the learnings from those failures that are going to help them achieve success. To innovate, intelligent failures are unavoidable.

Innovation Accelerates When you Fail Fast, Fail Often

Since intelligent failures are inevitable in the process of innovation due to their experimental nature, the only formula to success is to get through the process systematically and swiftly. If an inventor like Thomas Edison has to experiment with 1,000 lightbulb designs before he finds one that works, he has to experiment faster and more often to figure out the right formula. Instead of being emotionally trapped in the last failure, just pivot and move on. That should also apply to your organization. As a leader, you would want your employees to experiment with a smaller investment, come to a conclusion quickly on what works and what does not, and eventually achieve the innovation breakthrough. Therefore, you should lead your people to think about how they can design experiments smarter and achieve results with fewer resources. In that case, the learnings captured are of quality, quick turnaround time, and low cost.

Leader’s Approach to Intelligent Failure

The failure study is often not taken seriously as it is usually emotionally unpleasant for people to look again at their failures. That is why having the right culture is important. You have to create openness for your employees to talk about failure and unlock the learning opportunities. Here are a few notes on how you should approach failure:

• Analyze the failure: The next time you see a failure in your corporation, take a closer look and find out what caused it using the spectrum of blameworthy and praiseworthy failures we’ve just discussed. Instead of being sad or angry about the failure, invite people to discuss what they think went wrong. Listen to their perspectives.

• Encourage “fail fast, fail often.” If it is an intelligence failure, recognize the effort that the team made to experiment with something new. Congratulate the team on achieving this failure (like an invalidation) using such a small investment. They have de-risked innovation and avoided spending huge effort in the wrong direction. Now that the team has concluded the last experiment failure, encourage them to pivot and progress to the next validation.

• Communicate intelligent failures for others to learn. Be open and transparent about the failure and present it as an opportunity for all to learn. Organizational learnings are valuable and sharing them saves other teams’ effort and time in their experiments. A leader can set the stage by inviting the team to share what they have tried that does not work and what the team is now moving on to. Emphasize learning and progress. By doing so, you will also encourage others to be more open to talking about intelligent failures.

Reward Innovation

Based on the Incentive Theory of Motivation, incentives are tangible or intangible rewards that you give to a person based on positive behavior.²³ By associating a reward with positive behavior, it motivates the person to continuously repeat the behavior. Rewarding innovation sends a signal to your employees that this behavior is encouraged and is part of the culture. However, finding a reward that people view as a good incentive might not be as straightforward. The concept of reward can also change over time and in different situations.

Reward Is Not All About Financials

There is no doubt that finance is an important factor at work. Corporations should pay competitive and fair compensation to their employees so that they can focus on performing their work and not worry about their living. However, beyond that, money does not play such a significant role as we might have expected. In his book Drive: The Surprising Truth About What Motivates Us, Daniel H. Pink discovered that the traditional carrot and stick approach—increasing productivity by rewarding good behavior and punishing bad—worked quite well during the Industrial Revolution.²⁴

Back then, most of the work was routine based. But as time went by and tasks became more complex and more self-directed, this traditional approach no longer delivered the expected results. In fact, monetary incentives can cause unintended results including unethical behavior, short-term thinking, and so on.²⁵ It is still important to pay people enough to keep them motivated but, beyond that, people are more motivated by jobs that align with their innate intrinsic motivators:

• Autonomy: The desire and need to direct our own lives in terms of time, technique, and task.

• Mastery: The need to get better at things and develop further through training and self-improvement.

• Purpose: The core human need is to be connected to something bigger than ourselves. The need to do things that matter.

Based on the above principles, you can reward employees in the followingways:

• Recognition at town hall, conferences, and meetings. Recognizing the employees has a powerful impact: it makes them feel appreciated. It is the easiest way you can reward employees for the work they have done. Make sure your recognition is specific and timely. Find a way to articulate how the employee’s contribution aligned with the mission of your corporation.

• Grant them the lead role. If an employee comes up with a brilliant idea, the worst thing you can do is take it away and delegate someone else to drive it. To encourage innovation, assign the person who comes up with the idea as the lead. Let the person drive the idea forward.

• Include innovation performance in the appraisal. You can include innovation performance in the performance review and make sure that people managers capture the staff’s effort spent on innovation. It then becomes part of the staff profile of the organization and should be considered when it comes to evaluating the opportunities for promotion and mobility.

• Give them autonomy and flexibility in how they work. As a leader, your job is to manage the people, not the tasks. Give people a certain degree of autonomy to decide how they want to manage their work. You can start giving autonomy by setting expectations and making people accountable for their own tasks. Your employees will value your trust in them. It also allows them to grow.

• Give awards, prizes, and perks. In a global bank I worked for, there is an innovation awards festival every year. Teams working on innovative projects can submit their project description and progress to a central committee. The committee will evaluate the projects, from early to mature-stage projects, and give awards to teams based on specific criteria. To increase participation, employees can also vote for their favorite projects. Announcements of awards are widely publicized internally. Each employee in the awarded team will be granted prize points that they can accumulate to redeem perks in an employee store. Perks include phones, electronic devices, vacations, and so on.

Besides incentives provided by management, there are other official incentives that you can build into your human resource system and policy. For more institutional incentive practices regarding motivating and retaining intrapreneurial talents, refer to Chapter 9.

Reward on a Team Basis

Innovation seldom happens solo. Intrapreneurs might initiate an idea on their own at the start, but to realize the idea, there is usually a team behind them executing it diligently. For that reason, corporations should take a team-based reward approach to encourage collaboration and synergy-building. Fair rewards for team members enhance trust in the team by creating equal opportunity for all to succeed.

Make sure you also reward the people who are involved in moving the idea forward, including risk functions such as legal, compliance, and information security. It demonstrates that the corporation recognizes partners who support innovation. But avoid the pitfall of rewarding too wide a group of people claiming credit. This dilutes the effort made by the real contributing team members.

Reward the Intelligent Failure Too

That might sound strange but if you can reward intelligent failure, you can make impactful progress in building an innovative culture. Look at it this way: by rewarding intelligent failure, you are in fact rewarding the action of “trying.” This incentivizes your employees to think outside of conventional ways and create new solutions. Rewarding failure is one of the most powerful ways to eliminate fear. NASA has adopted this by giving employees the “Lean Forward; Fail Smart Award.”²⁶ This award was designed to encourage, recognize, and celebrate the spirit that propels individuals to take the risk to innovate. And while they, unfortunately, failed to reach the desired outcome, they learned from the attempt.

In this chapter, we have discussed about building a culture that can nurture intrapreneurship. A culture of fear is the number one enemy of intrapreneurship. You can examine whether there is such a culture in your organization by asking yourself the three questions mentioned in this chapter. Then discuss with your management team and employees how they feel about working in your organization.

This chapter has also guided you on the practices required to build a culture for intrapreneurship. Developing a strong customer obsession culture helps shape a team’s mindset to create the best value for customers. Building psychological safety is crucial for encouraging employees to challenge the status quo and contribute new ideas. Understand how your management team views failures at the moment and whether you are taking the right approach to handle different types of failures. Use rewards to encourage positive behaviors and it will help you set an example for your people. There are various ways to reward employees mentioned in this chapter that you can implement with your teams.

Setting the right culture is not an overnight process, of course. It takes awareness and a commitment to change. Your culture affects the level of openness of your employees to contribute. But more than that, employees need to be provided with the right tools and processes. In the next chapter, we will talk about the infrastructure you need to build to enable intrapreneurship.