It was back in 1976 in a business trends piece for The
Economist that Norman Macrae said corporations should engage in
"alternative ways of doing things in competition with
themselves." By 1983, author Rosabeth Moss Kanter was
suggesting innovation pioneers could be found at all levels of the
organization in The Change Masters: Innovations for Productivity
in the American Corporation (Simon & Schuster).
Then a model to create a "self-organizing" and
"less rigidly hierarchical" workplace emerged: Coining
the word "intrapreneur," or intra-corporate entrepreneur,
Elizabeth and Gifford Pinchot published their book Intrapreneuring in 1985 and made it
their mission to teach large corporations how to make innovation
more cost-effective by using the talents and productivity of their
employees. And they have: Their Bainbridge Island, Washington-based
innovation services firm has helped everyone from 3M and Campbell
Soup to AT&T realize the potential of their employees.
Now everyone, from consulting firms like Pinchot & Co. to
professors from the top B schools, is encouraging businesses to
adopt some form of corporate entrepreneurship, and they're at
their beck and call to help implement those programs. With Texas
Instruments' Speak & Spell, Apple's Macintosh,
Sony's PlayStation and Microsoft's much-anticipated Xbox as
examples of corporate entrepreneurship successes, you can
understand why.
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However, letting employees set up shop under your umbrella may
not be the best move for your business. Employees may know their
products and services inside and out and have ideas on how to
expand them or cut costs, but you may think it's too risky to
change the focus of your company. That doesn't mean you
can't learn from the intrapreneurship model.
"It would be too disruptive for small businesses to nurture
things outside the current scope of activities," says Richard
Leifer, associate professor of management and the project manager
for the Radical Innovation Project at Rensselaer Polytechnic
Institute's Lally School of Management and Technology in Troy,
New York. "Focusing on breakthrough improvements within their
current lines of business would be less disruptive."
Another concern is that too many entrepreneurs running around
within one small business could harm ongoing operations. 3M lets
all employees work on developing their own ideas as much as 15
percent of their workday, but Leifer suggests no more than 3
percent of a small company's population should be
"out-of-the-box thinkers."
That leaves us with just one riddle to be solved: How
entrepreneurial can you make your company without giving it a shock
to its system?
"I call this the schizophrenic approach to
management," explains Leifer. "We have to do our current
activities well and continuously improve those activities. At the
same time, we have to think of new ways of creating value and
growth. And unless we find new areas for growth,
companies--especially small ones--will fade away."
Leifer likes the intrapreneurial model in place at 3M ("a
big company that acts small"): If you come up with a good
idea, develop it and get support for it, you can eventually build
that business and manage it. Companies like Lucent and 3M also let
employees share in the profits of their corporate entrepreneurship.
"This may be a little far afield for many small-business
owners," he says, "but look at the upside and the
downside. The upside is, everybody wins: The value of the company
goes up, and you attract interesting people. The downside is, the
traditional entrepreneur loses some direct control."
Giving up control--oh, dear. "Control is elusory
anyway," says Ken Perry, senior consultant at Pinchot &
Co. "What you really want is order. And we believe order
appears more effectively when you allow for
self-organization."
Sound tempting? If you're a small business, assuming a
3M-like form of corporate entrepreneurship wouldn't cause much
of a culture clash. For well-established companies, however, it can
be riskier. But one thing's for sure: Showing employees they
can help create something groundbreaking lifts spirits, boosts
productivity and can create loyalty where most businesses have
little. And that prospect is hard to ignore for entrepreneurs
fighting to stay innovative.
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