Businesses need fresh ideas and innovations to stay ahead of their competition. Traditionally, companies have looked outside for innovation through mergers, acquisitions or partnerships, in the creation of competitiveness or increasing their market share (Deloitte, 2015). Part of the reason for such a move is the challenge companies find in creating such innovations in-house. However, through a new phenomenon called intrapreneurship, where a business gives employees the tools and support for the creation, development and furthering of new ideas, businesses can achieve more. While it has great potential, intrapreneurship can have its drawbacks. However, businesses can encourage intrapreneurship as a way of achieving competitive advantage in many ways.
In their article “Five Insights into Intrapreneurship,” Deloitte (2015) inform that intrapreneurship pays tenfold to businesses through organizational growth, culture and talent. With such benefits, it is important for companies to create an environment that encourages intrapreneurship. According to (Govindarajan & Desai, 2013), giving ownership to employees, where they can make projects their own encourages intrapreneurship. Providing employees with access to business data and intelligence also fosters intrapreneurship. Such access allows the employees to respond to market changes, and innovate in anticipation of market trends. Additionally, businesses can encourage intrapreneurship by providing funds, encouraging networking and collaboration among the intrapreneurs (Govindarajan & Desai, 2013).
Deloitte (2015) posits that one of the advantages of intrapreneurship is that is fosters proactivity within the company, and in so doing positioning a business as an industry leader. Intrapreneurship, therefore, creates competitive advantage for the business, in addition to motivating employees. Further, through intrapreneurship, companies can accelerate their product and service launches, since they have motivated employees working on such products (Deloitte, 2015). Intrapreneurs get access to financial backing from the company, giving them the opportunity to actualize their ideas. Moreover, through collaboration and the backing of the company, there is more marketing influence for the intrapreneurs, a fact that also helps them better market their ideas to the market.
However, while entrepreneurs benefit from innovations through direct profits, profits from intrapreneurship always go to the company. Intrapreneurs only benefit through salary raise, and sometimes, nothing at all. Moreover, intrapreneurs get less glory from their innovations, since most of the glory goes to the company or head of the department. Further, any failure of the intrapreneurs discredits the intrapreneurs, and the company may not give them further opportunities to correct the mistakes (Silverthorne, 2001). Intrapreneurship also risks competition from the core business of the company, and therefore, risk failure, especially when there is a feeling of threat from executives running the core business of the company.
While not widespread, companies are continually recognizing the value of intrapreneurship. Many more are giving employees time off their normal work hours to work on personal projects. My company, for instance, allows employees to innovate by giving them time off their normal work to work on their personal projects. Through this initiative, employees have been able to innovate and contribute new ideas to the company. Most of the company’s innovations have come out of employees side projects, a factor that has encouraged employees within the company to not only be committed, but also motivated to work in the company. The employees find this encouraging and more of them are happy to work for the company. Additionally, they see the intrapreneurship as a way of actualizing their dreams, an opportunity that not many companies offer to their employees.
Deloitte (2015). Five Insights into Intrapreneurship. A Guide to Accelerating Innovation within Corporations. Deloitte. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/de/Documents/technology/Intrapreneurship_Whitepaper_English.pdf.
Govindarajan, V. & Desai, J. (2013). Recognize intrapreneurs before they leave. Harvard Business Review. Retrieved from https://hbr.org/2013/09/recognize_intrapreneurs.
Silverthorne, S. (2001). Risks and rewards of the intrapreneur. Harvard Business Review. http://hbswk.hbs.edu/item/risks-and-rewards-of-the-intrapreneur.