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Welcome to Federico's blog posts, where he intimately shares his personal experiences about a vast array of compelling topics suitable for your business operation or profession.  

How entrepreneurs need to manage intrapreneurs

We all know that entrepreneurs are passionate individuals, with a zest for life, and a willingness to conquer the unknown despite the risks. 

We also know that entrepreneurs typically operate outside of their comfort zone to pursue opportunity; they challenge the status quo; whilst dealing with failure, plenty of sceptics, and an avalanche of issues on a day to day.

Another core challenge for the entrepreneur is how to effectively manage their personnel, and ensure that the entrepreneurial spirit continues to manifest throughout the workplace. 

Even more challenging is keeping a harmonious relationship between the business owner (the ‘entrepreneur’) and the entrepreneurial employee (the ‘intrapreneur’).

Co-existence between Entrepreneurs and Intrapreneurs

So what happens when you amalgamate entrepreneurs with intrapreneurs in the one workplace environment ?  A good but simple analogy is to ask what would happen when you throw a lion in a cage with a hippopotamus ?

My guess is that there will be bloodshed ! This is because both animals are powerful, determined, competitive, hungry, and perhaps even fearless.  In other words, they possess very dominating characteristics and habits that would suggest they are better suited living on their own, rather than co-existing with other animal or breeds.

If we use this analogy and we come back to the entrepreneur and intrapreneur, my experience has taught me that when entrepreneurs co-exist with intrapreneurs in the one environment, the chances are that it will be a volatile mix of emotion, there will be plenty to fight over, and the end result can be either constructive or very destructive.

The Mindset of Entrepreneurs and Intrapreneurs

Entrepreneurs and intrapreneurs can be stereotyped as being passionate, independent, imaginative, risk takers, fearless, competitive, persistent, and simply never give up in order for them to pursue their goals or dreams.

So, how can entrepreneurial business owners employ people with intrapreneurial characteristics or work habits to fuel growth, without the relationship ending in bloodshed ?

Let’s firstly look at the definition and mindset of the intrapreneur.  Most popular dictionaries define the intrapreneur something like - ‘a person that operates within an organisation and embraces innovation to pursue opportunity’

Personally, I find this definition quite ordinary and simplistic.  A better definition would be - ‘a person that drives growth through innovation, creative imagination, and pioneering of new ideas; an entrepreneurial employee that exploits the opportunity at hand for the well being of the company and its stakeholders’.

The truth of the matter is that the intrapreneur is very similar in mindset to the entrepreneur, but very different to the conventional (non-entrepreneurial) employee.  Because of these traits, intrapreneurs need to be handled with special care and with a different set of rules.

Effective Leadership of Intrapreneurs:

To successfully manage intrapreneurs, the business owner or leader (ie. the ‘entrepreneur’) should consider the following strategies:

1.            Develop Company Culture:

The entrepreneur needs to ensure an entrepreneurial culture is developed within the organisation from the roots up and across all divisions / areas of the company.  This means that the entrepreneur himself needs to embrace healthy / regular entrepreneurial habits, and effectively communicate the right values and beliefs to its people. 

This may involve encouraging innovation; thinking outside the square; encouraging autonomy, but equally establishing regular meetings amongst the team; pioneering of new ideas; challenging the status quo, etc.     

By establishing these work habits, the entrepreneurial spirit will gradually manifest and spread amongst all its people.

2.            Let Employees know Who’s the Boss:

What happens if company protocol is ignored, the boundaries are pushed too far, and ego gets in the way ? A similar question would be ‘how do you control or tame a wild dog to obey its Master ?’  The simple answer is ‘let the dog know who’s the boss !

Let’s face it.  The entrepreneur typically takes all the risks, especially financially.  The intrapreneur may suggest great ideas or identify an opportunity at hand, but the truth is that they can typically walk away if the plan fails.  The entrepreneur, on the other hand, has to pick up the pieces and face the consequences of an idea not going to fruition, and the financial consequences.

Therefore, intrapreneurs need to be more mindful and respectful of this reality, and understand the ongoing risks entrepreneurs need to regularly face.

3.    Understand the Difference in Mindset

So far we have identified many similar traits between the entrepreneur and intrapreneur.  In contrast, how do their mindsets differ, and how do entrepreneurs co-exist with their entrepreneurial employees to achieve a win-win situation and overall harmony ?

Firstly, let’s stress one key point. Intrapreneurs prefer to work within an organisation, as compared to entrepreneurs choosing to own their own business and literally be their own boss.  For me, this implies that intrapreneurs tend to be more risk averse, or require a higher degree of certainty, support, or guidance (from their employer).

If we come back to our previous analogy of the animal kingdom, not all animals are alike. In fact, not all lions are the same.  There is a big difference in habits or even mindset between the wild lion compared to the lion held in captivity (ie. within a protected zoo environment).   The primary difference is their ability to fend for themselves and ability to stay alive regardless of the resources or risks present.

So, intrapreneurs are less capable of surviving completely on their own, as compared to entrepreneurs.  The bottom line is that intrapreneurs need to be aware of this difference and respect the authority and brave nature of entrepreneurs who can better cope in the wild / hostile environment of business. 

4.    Embrace Fast, Effective Decision-making without the Angst

In a fast paced entrepreneurial environment, time means money.  In other words, issues need to be resolved promptly, and opportunities need to be materialised swiftly, in order for growth to occur.

Even-though intrapreneurs are good for pioneering of new ideas, and embracing innovation, they often lack effective decisionship.  They often spend too much time perfecting the idea, rather than simply bringing the product to market, earlier than expected.

If pushed, intrapreneurs will find the experience too challenging and even discouraging, creating angst.

Entrepreneurs need to therefore better manage this anxiety and encourage decision-making to occur more effectively.  This can be best achieved by formulating a regular meeting place, or hub, where issues can be openly discussed, and experiences and wisdom of individual staff can be shared throughout various divisions of the organisation. 

Sharing of knowledge and relying on a databank of knowledge is a powerful antidote for fast, effective decision-making.

The myth of the intrapreneur

It’s been approximately 25 years since the first edition of the “E-myth” (a book authored by Michael E. Gerber), was first released.

This book was an instant success and voted the best-selling book of its time, with over 5 million copies sold in 29 languages. 

The ground-breaking ‘entrepreneurial’ methodology, developed by Michael himself, is now taught in 118 universities worldwide. ^1  The key objective of this book was to teach business owners the modern / entrepreneurial approach to business building, to help them build a thriving business and secure long term survival, as companies moved into the 21st century.

It is therefore no surprise that the word ‘entrepreneur’, and the relevance this has in the business world, is widely known and generally understood by the SME community.  

The understanding and meaning of entrepreneurship can also be largely attributed to pioneers or ambassadors of entrepreneurship like Richard Branson, Steve Jobs, Oprah Winfrey, etc.  I can therefore guesstimate that 99% of business owners in Australia can provide a fairly accurate definition and meaning to the word – ‘Entrepreneur’.

The Definition of Intrapreneurship:

What continues to surprise me is that the definition to the word ‘intrapreneur’ remains largely unknown to most Australians. 

More alarmingly, SME business owners appear quite ignorant of the term intrapreneurship and the relevance this can have for their own business practice.  Further still, they appear sceptic or even dubious of the integrity and value of how intrapreneurs can benefit their business, compared to the average (non-entrepreneurially minded) employee.

Again, I can again guesstimate that only 5% of business owners can accurately define the meaning of ‘intrapreneurship’, as well as say that they are pro-actively building an entrepreneurial culture within their own practice.

This fact is truly a sad reality, considering how important intrapreneurship within the workplace really is.

The History of Intrapreneurship:

It is worth noting two important facts.

Firstly, the word ‘intrapreneur’ has been in the dictionary since the 1990’s.  The dictionary defines ‘intrapreneurship’ as follows:

“A person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation” ^2

I would like to personally define an intrapreneur simply as:

an entrepreneurial employee; someone who thinks and acts like an entrepreneur, but prefers to work within an organisation instead of having their own enterprise.”

 

The second point worth noting is that the intrapreneurial methodology has been widely acknowledged and endorsed by business leaders across the world for well over two decades, especially across America and the UK.  They openly claim that it is one of the most important factors to the survival of any organisation, as well as a key contributor to future innovation and entrepreneurial leadership, especially in the 21st century.

For instance, Richard Branson was once quoted saying for ‘Entrepreneur’ magazine:  “Virgin could never have grown into the more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain”.

Further, intrapreneurship has been labelled the “secret weapon for success”. It has been used in high tech firms such as Google, Apple, 3M, Lockheed, Sony, Texas Instruments, Toyota, and other enterprising firms.

The conclusion is that without fostering an entrepreneurial spirit amongst staff, or an entrepreneurial culture across all levels of the organisation, it is likely that the firm will remain uncompetitive, stagnant, and unable to tackle the challenges that the 21st century presents. 

A classic example is the need for commercial airlines to take into account environmental issues or factors that may prevent future growth, or jeopardise their reputation across the environmentally conscious community. 

The intrapraneur will be the first to challenge the status quo, and likely to propose alternative, often outside the square, solutions to tackle such problems.  They may even suggest a solar powered aeroplane even-though, at face value, it may appear a non-viable option to begin with !

However, there is more benefit than harm to suggest such an idea, as this will breed new ideas amongst the team, creating possible new opportunities

The Intrapreneurial Myth:

So, what is stopping intrapreneurship from proliferating further amongst Australian businesses, despite it being widely embraced and adopted by serial entrepreneurs around the world ? 

Let’s explore the ‘Intrapreneurial Myth’ and uncover five possible reasons why business owners or leaders fail to willingly embrace intraprenership within the workplace:

1.   The intrapreneur can be perceived as being only motivated by his or her own objectives and ambitions, rather than primarily supporting the organisation’s mission and vision.

2.   The intrapreneur is prepared to often challenge the status quo and work outside of the standard operational guidelines, causing potential disruption and head-aches for the management team.

3.   The intrapreneur is often seen as a risk takerprepared to push the boundaries outside of conventional practices, causing potential financial or operational risks.

4.   The intrapreneur is too focused on constant innovation, change, and pioneering of new concepts, without taking into account the financial viability of the product or service.

5.   The intrapreneur may choose to exit the employment relationship to pursue their own goals and business pursuits, once they have acquired sufficient knowledge from within the company.  This may cause a conflict of interest for the organisation.

The Truth about  Intrapreneurs:

There is truth to the fact that entrepreneurs and intrapreneurs carry a different mindset or ‘code of conduct’ to the conventional employee.

Intrapreneurs are passionate individuals, with a strong desire for change, growth, innovation, and success.  They may often push the boundaries too far, or fail to see why there are ‘protocols’ or ‘guidelines’ to follow within the organisation.

However, the benefits of hiring and managing entrepreneurial employees compared to standard employees, far outweighs the risks or problems it can potentially create. 

I can boldly say that fostering an entrepreneurial culture and encouraging intrapreneurial practices amongst staff should be ranked number one priority. 

The truth however is that Australian business owners and senior personnel continue to micro-manage their subordinates; often with a tight grip, and with a lack of trust.  This can easily prevent or kill innovation and entrepreneurial leadership from manifesting, as well as jeopardise the long term commitment, dedication, and loyalty of passionate and driven staff.

The bottom line is that a dedicated business owner or leader cannot alone build a thriving enterprise.  Instead a business requires the innovative thoughts, passion, leadership, pioneering skills and an entrepreneurial mindset of its people, for it to successfully compete in the current modern era.

(Authored by Federico Re and exclusively written for 'Think & Grow Rich' Magazine - June/July, 2014 Edition)

Federico Re