Introducing the Intrapreneurship Formula
In the last chapter, we have discussed how to identify intrapreneurs in your organization. The bad news is that, despite drawing up a list of potential talent, you can still fail miserably at corporate intrapreneurship. Many people think that some corporates are more innovative than others because they have more innovative leaders or employees. That might be true, but it’s not the whole story. Having a group of talented intrapreneurs is only the first step in building toward successful intrapreneurship.
In this chapter, we will discuss what it takes to induce an organizational change, that is, the ingredients of the formula of intrapreneurship. This formula is created to help leaders plan and manage their intrapreneurship strategy in a more structured way since many do not have a well-formed one. The Intrapreneurship Formula is a formula that identifies and analyzes five key components of intrapreneurship that shape innovation activities in organizations across industries and helps determine the organization’s level of innovativeness. The Intrapreneurship Formula can be applied to any organization or team to understand their strengths, as well as areas in which the current innovation ecosystem can be improved. It helps leaders form a tailored plan to cultivate intrapreneurship to enhance the organization’s long-term competitiveness.
The Intrapreneurship Formula is a business innovation analysis model that helps to explain why various organizations sustain different levels of innovativeness. It is a simple but powerful tool for understanding the forces in your ecosystem that are enabling or jeopardizing innovation. Based on that, you will be able to adjust your intrapreneurship strategy accordingly.
A corporation is a type of organization composed of a collection of people in pursuit of defined objectives under the same corporate environment. Psychologist Kurt Lewin, one of the pioneers of social, organizational, and applied psychology, claimed that human behavior is a function of the person and the environment the person is in.1 It can be expressed in the form of an equation. The desired behavior in this instance is intrapreneurship.
Behavior = Person × Environment
It is a simple equation that provides a good starting point to discover what drives intrapreneurship in an organization. According to Kurt Lewin, “person” refers to the individual’s characteristics.2 It is similar to the concept of traits discussed in Chapter 2.
“Environment” refers to various aspects of an individual’s situation at the time of the behavior, including their physical surroundings and social environment. Therefore, the actual behavior of a person depends on the person’s characteristics and the temporary structure of the existing situation. There is no distinction between which of them, heredity or environment, is more important.
Lewin’s theory also said that heredity and environment must work together to effect a certain mode of behavior. This is because the variations in behavior shown by people with the same individual characteristics may be extremely large. Having innovative people is important but it’s only part of the equation. The environment, where the innovative people are working, is equally important.
In this book, I’ll refer to the interaction of individuals and the corporate environment that they are in as the “ecosystem.” So what are the components of a viable ecosystem that facilitates and sustains the behaviors of intrapreneurship? Let’s extend the concept of Lewin’s law and apply it to intrapreneurship. In this instance, the desired behavior is the intrapreneurs’ desired behavior of innovation.
Environment
Let us start with the component environment in Lewin’s theory. In this instance, we are referring to the environment where the desired innovation behaviors are conducted. In their book, Innovation As Usual, Paddy Miller and Thomas Wedell-Wedellsborg point out that the primary job of the leader is not to innovate.3 Instead, it is to become an innovation architect, creating a work environment that helps people engage in the key innovation behaviors as part of their daily work.
The job of an architect is to design the space and the surroundings with which people will interact. An experienced architect would observe the existing environment (including sunlight, wind direction, and landscape), understand the functions and expected human activities, and integrate them to design the building, rooms, corridors, and even the doorways. Good architecture should follow the principles of firmitas, utility, and beauty. It should be robust and sustainable, useful, and function well for the people using it. It should delight people and raise their spirits.4
Imagine that this architect is you, the corporate leader. To design an ecosystem for corporate intrapreneurship, you will have to:
1. Observe the existing corporate environment.
2. Understand the function of innovation and the expected innovative behaviors.
3. Come up with the design, from the concept to the details.
And what does good architecture tell you about an innovative ecosystem?
• It should be sustainable.
• It should work for the people who are innovating within it.
• It should create emotional delight for people to engage.
To further analyze the environment that nurtures innovation behavior, I have broken it down into two parts: culture and infrastructure.
Environment = Culture + Infrastructure
“Culture” refers to the amalgamation of values, vision, mission, and the day-to-day aspects of communication, interaction, and operational goals that create the organizational atmosphere.5 Culture affects every aspect of the corporation, including how decisions are made, who gets hired, and how people interact both internally and externally. In Chapter 5, we will discuss what creates a culture that nurtures intrapreneurship and what shuts it down. We will talk about:
• What is the culture of fear and how does it affect your innovation activities?
• What might your people be afraid of?
• How do you check whether there is a culture of fear in your organization?
• How do you create the culture for intrapreneurship?
How does customer obsession help innovation and how can you increase the customer focus of your employees?
How do you communicate innovation with your employees?
Why does failure management matter and how do you handle failures?
The second element under environment is “Infrastructure.” Infrastructure comprises the basic systems and services an organization uses to work effectively. In the context of this book, infrastructure refers to the combination of business design and process that enables intrapreneurship to happen. Innovation in large corporates needs to be managed with a disciplined process that requires systematic management. Chapter 6 will provide a breakdown of the key components of the organizational infrastructure and answer questions including:
• How do you manage your employees’ ideas?
How do you capture ideas?
How do you align the ideas with your strategy?
Who should evaluate the ideas?
How should you handle new ideas that might cannibalize your existing business?
• How do you manage innovation as a portfolio?
• What IT infrastructure do you need to enable the execution of new ideas?
How does cloud computing help speed up innovation?
Why do you need a sandbox?
Why do you need to empower your employees using data?
• How do you measure intrapreneurship? What are the key metrics?
• How do you safeguard the intellectual properties of the new ideas during different stages?
We will be discussing all the aforementioned in Chapter 6. Using the information, you can assess the current infrastructure of your organization and identify what assets you can leverage and what you need to build to enhance the level of innovativeness.
People
People are the true assets of your organization. For innovation behaviors to occur, people are a major component.
In Lewin’s law, “people” refer to employees’ characteristics. In the context of this book, I have defined the function of people in three key components: traits, skills, and network of diversity:
People = (Traits + Skills) × Network of Diversity
“Traits” explain what drives a person’s decisions and actions. In Chapter 2, we have discussed the traits of intrapreneurs. Using the information in Chapter 2, you can understand the characteristics, abilities, and thought patterns associated with successful intrapreneurs. That will help you identify the existing potential intrapreneurs in your organization.
But traits alone are not sufficient to drive innovative behavior. In the context of corporate innovation, there is another aspect of people besides their characteristics: “Skills.” Skill is the essence of an employee doing something well. It is the ability of employees, based on their knowledge, practice, and experience.
You can view traits as the driving force behind a person wanting to become an intrapreneur, while skills are the determining factors of whether they can become a successful intrapreneur. Employees might be curious and dare to explore, but without the right skills, they won’t be able to carry out innovation activities and successfully innovate. Either they would have to acquire the skills through experience or leaders would have to provide them with access to the means of developing them.
In Chapter 7, we will dive deep into the essential skills of intrapreneurs. Once you identify the right candidates, there is a list of skills that you need to help them acquire. These skills include disciplined
innovation, leadership, navigating a large organization, and communications:
1. Disciplined innovation process:
• How can the employees identify a problem with business value?
• How can they validate the problem?
• How can they approach and break down a complex problem? How can they build a solution concept?
• How can they validate the solution concept?
• How do they move ahead with limited resources?
• How do they manage the pace of innovation work?
• How do they move at speed and deliver innovation with a quick turnaround?
2. Leadership:
• How can your employees lead by influence?
• How can they lead through volatility, uncertainty, complexity, and ambiguity during the innovation process?
• How can your employees network widely and across disciplines?
3. Navigating a large organization:
• How do your employees manage a wide group of stakeholders with different motivations?
• How can they get stakeholders’ buy-in?
• How can they deal with resistance to new ideas within the organization?
4. Communications:
• How can your employees communicate complex innovative concepts to various stakeholders?
• How can they sell a product that is not launched yet?
• How can they effectively build a story around a new idea to convince people to invest in it?
With these skills, you can prepare your employees to become successful intrapreneurs who can go forward on their own to discover problems, develop solutions, and collaborate with and persuade other stakeholders to move forward.
Employees in a large organization never work alone. People achieve results most often through teamwork. Leveraging the partnership formed by an employee with other employees creates a network effect to achieve more and better ideas at a faster pace. Intrapreneurs are not limited to a single background or domain. In Chapter 1, we discussed how anyone can be an intrapreneur. With different backgrounds, knowledge, and practices, different types of intrapreneurs bring different values to an intrapreneur team. In Chapter 8, we will discuss the role the network of diversity plays in intrapreneurship, including:
• What are the different types of intrapreneurs by profession and character?
• What value do different types of intrapreneurs bring to the table?
• How can you help your employees form an all-rounded intrapreneur team?
• How can you help different types of intrapreneurs communicate better among themselves?
• What is the ideal size of an intrapreneur team?
By reading Chapters 2, 7, and 8, you will be able to identify the potential intrapreneur candidates, provide them with the right training, and help them form highly effective teams to create new business value for your organization.
Bringing It All Together: The Intrapreneurship Formula
Combining the above, sustainable intrapreneurship becomes a function of people’s traits and skills, and the culture and infrastructure created by leaders as an environment.
Intrapreneurship = ((Traits + Skills) × Network of Diversity) × (Culture + Infrastructure)
Figure 4.1 helps visualize the Intrapreneurship Formula and how the key components interact.
In this chapter, we’ve broken down the ecosystem of intrapreneurship into its components of traits, culture, infrastructure, and skills. So let’s dive in and examine how to build each of these components. In the next chapter, we’ll discuss the factors that determine a culture that nurtures innovation.
Figure 4.1 The Intrapreneurship Formula