Innovation through intrapreneurship


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Research Paper titled “Innovation through Intrapreneurship – A Management’s Perspective” on how manager's can foster an environment of innovation & spirit of startups in an Enterprise.

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Innovation through intrapreneurship

  1. 1. Innovation through Intrapreneurship A Management’s Perspective Abhishek Ballabh IT Professional Pune, India 91- 9860790381 Abstract Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently… you can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. While some see them as the crazy ones, we see genius. Because, the people, who are crazy enough to think they can change the world, are the ones who do. - ―Here’s to the Crazy One’s‖ The Apple Creed - In these tough economic times coupled with ever increasing rivalry from competitors, globalization and technological changes, a number of firms are leveraging innovation to weather these storms. One of the methodologies many companies are following is to unleash and tap the hidden entrepreneurial spirit in its employees thereby fostering innovation. This is not easy as this defies the status quo in their work and requires a complete paradigm shift in perspective i.e. from an employee to an entrepreneur. These entrepreneurial waves within the organizations are referred to as “Intrapreneurship” a term coined by author Gifford Pinchot in 1978.This enables the employees to carve out a niche , foster new ventures and challenge the traditional way of doing things thereby suggesting improvements and optimized solutions. This territory is not a novel idea but has ushered groundbreaking products and innovations in the past. Apple’s Macintosh Project , 3M’s iconic Post-it Note and Sony’s PlayStation all are products of pioneering intrapreneurial ventures. This paper attempts to understand the following:  Role of the Management discipline in order to foster innovation through intrapreneurship in IT companies.  The catalysts which trigger this paradigm shift in perspective i.e. from an employee to an entrepreneur.  Challenges that are faced and a generic model to facilitate intrapreneurship within an organisation. Generally there are two key factors behind the success of any Intrapreneurial Activity.  Encouragement and support from the senior management.  Reassurance that even if the ideas fail the intrapreneur will not lose his/her job or be “punished” in other ways. Hence a study of the Management perspective becomes very relevant in this context. Innovation through Intrapreneurship – A Management’s Perspective 1
  2. 2. This paper also draws input from a case study at one of the largest financial institutions in the world. This illustrates few intrapreneurial efforts which benefited organizations at large and at the same time evoked sustainability. This paper also discusses the:     The problems source and specific challenges faced behind the effort. The value proposition and the generic lessons learnt. The benefits and their impact on creating a conducive environment for similar efforts. The common thread behind the efforts and what drove them. This paper will be helpful for the managers trying to understand the Intrapreneurial Lifecycle within a corporation along with generic points to inculcate a conducive and motivating environment for the same. At the same time it will help individuals to introspect and develop a proactive approach towards innovation in their work and re-define their activities in order to contribute in a broader sense. Keywords—Innovation , Intrapreneurship , Management . I. INTRODUCTION “He that will not apply new remedies must expect new evils: for time is the greatest innovator” - Francis Bacon Can intrapreneurship be an agent to foster innovation within an organization? Why will an organization i.e. employees and management would want to indulge into something that is risky and at times breaks the conventional rules which have been set to govern the organizational structure and hierarchy , moreover when it is delivering the desired results ? Well let us take a look in depth and define the paradigm. In the management context the best definition we came across was by Prof Jack Raiton ( 2005 ) ―Integration of entrepreneurial skills into a large corporation’s strategic vision that nurtures a climate of radical or incremental innovation.‖ opportunity and are able to turn both to their advantage.” - Niccolo Machiavelli We list few of the characteristic traits which define the dynamics of an intrapreneural mindset A. Initial Activities and Behaviour There are some initial activities which describe the behavioural traits and reflect on the psyche of an intrapreneurial mindset.  Opportunity recognition –  Visions of a new product or concept –  Market Analysis & Exploration –  Procuring the Resource(s) –  Organizing & Implementation - Management thinkers have emphasized the pivotal role the top management has in creating an atmosphere wherein employees are encouraged to experiment. According to them, even if the top management wants to create an innovative and intrapreneurial organization, there is a need for intrapreneurs within the system who could execute the process of intrapreneurial innovation. Role of project managers is not only to foster an environment for budding intrapreneurs but also embrace this spirit and see it as an alternative in their management thought process. II. DYNAMICS OF AN INTRAPRENEURIAL MINDSET “Entrepreneurs are simply those who understand that there is little difference between obstacle and Innovation through Intrapreneurship – A Management’s Perspective 2
  3. 3. Fig. 2 Pinchot’s 10 commands III. INNOVATION COUPLED WITH INTRAPRENEURSHIP “Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth.” - Peter F. Drucker In the era of economic turmoil and volatile dynamics of the market, organizations are stressing more on Cost-effective solutions for a competitive advantage. In this context the idea of Cost – effective innovation becomes relevant. Focusing and delivering of entrepreneur spirit may have a great result and a big number of innovations. B. Mobilizing to create a Team Intrapreneurial team means small group of people who works together for producing product or service. Intrapreneurial team creates things and learns together. Fig. 1 A gamut of Behavioural traits of an Intrapreneur There are few behavioural traits which emerge from the initial activities as described above – A good team must have these characteristics in order for a success run:  Focus on surviving.  Creativity -  Continuity of relationship.  Common objectives.  Obstacle Mitigation –  Measurable objectives.  Getting the Job Done -  Competence and dedicates team members.  Taking Initiative -  Good communication, feedback.  Bearing Uncertainty and Risk – Three key components are important in this implementation aspect: Ideas should be corresponding to the customers.  Ideas should be corresponding to the company.  Ideas should be corresponding to the intrapreneur. The basics work of intrapreneur is to develop business vision and to make them real. Vision has two parts. First is intuitive finding of potential business model and the second one is building the vision, often hard but crucial for business planning. In business planning intuitive vision become plan for action. Innovation through Intrapreneurship – A Management’s Perspective 3
  4. 4. Fig. 3 The operating structure of an Intrapreneur Innovation through Intrapreneurship – A Management’s Perspective 4
  5. 5. IV. MANAGEMENT AS AN INCUBATOR We list few of the traditional management practices , there repercussions and recommended actions when it comes to actions from the management. "Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them." The below stated points are subject to various interpretations, the idea is to convey a generic message for the audience to comprehend the point. No Intrapreneurial venture can foster without management’s help and understanding, this is one thumb rule which we have to remember. Fig. 4 A paradigm between Innovation and Entrepreneurship - Paul Hawken Innovation through Intrapreneurship – A Management’s Perspective 5
  6. 6.  V. THE CASE STUDY AT A LEADING FINANCIAL FIRM  The Case of Automated & Managed Printer Services– (2008-09) It has been about 30 years since the term "paperless office" appeared, based on the theory that technology would eliminate the need for paper. But that utopian vision is a long way from reality. Paper consumption is one of the latent costs any organization faces and with the coming of CSR and Environmental Initiatives the mantra of Go Green is growing exponentially across the corporate world. Company was facing a similar problem as far its Print mechanism was concerned and there was a rampant need for a solution. C. THE PROBLEM The financial firm had over 26,000 printers, copiers and fax machines in the UK, with many different makes, models, configurations and drivers. This diversity was mostly overlooked by management as it never posed a problem as long as the localised needs were fulfilled. However the problem started to appear intermittently on various performance parameters and they were:      Limited standards for support and poor knowledge of critical devices . No standards for duplex, A3, colour, multi-function and confidential printing. Poor maintenance, fleet management and contingency arrangements. Poor device placement (sporadically placed at desks, corridors..), sizing (too small, too big..) and sharing (you can’t use my printer…) etc. No review of changing needs, using inherited devices instead of what you really need. Different phone numbers, help desks, engineers and service levels for print, copy and fax. Lack of specialist knowledge and support from with few problems fixed at first call and delays waiting for engineers. Environmental     No standards for environmental issues e.g. toner cartridge recycling, power consumption and paper reduction. Print and copy over 600 million sheets of paper each year! - That is 195,000 trees!! (40k sheets = one tonne = 13 trees – Over 42,000 print cartridges each year plus fax and copier cartridges. Many of the devices are old and energy inefficient adding to our CO2 emissions. Services and Support Innovation through Intrapreneurship – A Management’s Perspective 6
  7. 7. Costs       No control over toner and ink costs including usage, ordering and storage. All print costs are divided evenly irrespective of usage, unfair to low print business and lack of support to high print areas. No opportunity to business to understand and control print volumes and costs. No communications and visibility on opportunities to reduce printing.    All toner and ink cartridges collected and the materials recycled to EU guidelines. All devices to have a sleep mode, 90% reduction in power when not operating. 35% reduction in devices, with a much higher percentage in non-branch sites. New devices use 21% less energy than previous models. They generate less heat, less ozone and less noise. All devices disposed of to the Waste from Electrical and Electronic Equipment (WEEE) standards. In 2008 the management understood the gravity of the situation and the savings (both in terms of cost and efforts) and decided to brainstorm for a solution with the local IT stakeholders. Reduced Costs D. THE SOLUTION The idea behind this endeavour was not only to find solutions to the above mentioned problems but also to come up with the best possible optimal solution.     Improved Service          A standard infrastructure supplied though the business partner Hewlett Packard ( HP) the world experts on print management services, to foster common service levels and proactive monitoring, support and fleet management. Contingency built in as standard with no device becoming a single point of failure. A specialist help desk covering all print issues, available through a centralised support number. New, modern devices with standard models, configuration and drivers. Additional, specialist devices available at extra charge allowing the full business cost to be understood. No compromises forced by budget limits. Consumable ordering and dispatch automated. Consultancy service to assist with all future print requirements and initiatives. Secure printing via security pass readers with double sided printing, A3 and A4 on black and white devices as standard. MI of who printed what, where and how much it costs so usage could be effectively tracked. E. THE BENEFITS QUANTIFIED Reduced Environmental Impact   Reduction in paper usage by an estimated 27%, that equates to over 50,000 trees a year. Reduced CO2 emissions, the paper reduction alone will save nearly 900,000kg a year. Innovation through Intrapreneurship – A Management’s Perspective  Standard infrastructure costs (including copy and fax) are covered by the desktop recharge with no increase for 2007 and with reductions estimated for 2008 onwards. Specialist requirements charged to the relevant business reducing the burden on other areas. All consumable costs measured and charged back to the relevant business areas with usage details. Administration costs for consumable ordering, office moves and similar service are reduced. Reduced paper costs to business areas. The Managed Print Services (MPS) was ground breaking collaboration between the business and the IT centres as the later were given a free hand by the business to implement the strategy. F. THE CHALLENGES AND LESSONS Change can be a very disruptive process and the MPS epitomized this phrase. Various banking IT applications interfaced directly with the printers, fax etc so impact was profound. Once they were revamped a rattle testing was inevitable across various bits and pieces of these applications in order to ensure compatibility. This was a big overhead and a critical decision which business had to take. Apart from this there were apprehensions from the various Business Units which saw this change as breach of privacy as this change would enable a successful tracking mechanism / associate. Overall visibility would eliminate localized control. Finally it was DRIVEN BY THE BUSINESS AND EXECUTED BY THE IT:   IT was supposed to audit the existing print environment at the Client’s site and include any special requirements. Further they produced a design for the new devices and their locations. Any specialist devices and their costs were also included. 7
  8. 8.  Implement the design, test key elements as much as possible to ensure the new environment meets your requirements.  Review the design after a suitable period to ensure nothing was missed out.  The majority of implementations will be during normal working hours, but with minimal disruption to the business.  A short familiarisation training session with key members of staff.  HP will provide Day +1 onsite support  BAU- Bank Addressable Unit (first line of support for the bank's end-users) involved. This MPS project was an in-house model which once implemented was rolled out successfully across various UK locations. This was a result of tremendous effort from the various Business Units in liaison with their IT partners. This Intrapreneurial effort also involved liaising with the Third Party service providers like HP ( Hewlett Packard Co) Innovation through Intrapreneurship – A Management’s Perspective and getting the job done. It was the vision of the management and execution strategy of the IT which made the vision a reality. The savings as per real time data mentioned above were phenomenal. At the end of the day we were with a Better , Greener and Cheaper solution which fitted all. VI. LIFECYCLE OF INTRAPRENEURSHIP – A HOLISTIC VIEW The lifecycle of Intrapreneurship is a generic step by step listings of the cycle of an Intrapreneurial journey. It should be considered as a generic guideline and adopted as per the specifics of the situation. 8
  9. 9. Innovation through Intrapreneurship – A Management’s Perspective 9
  10. 10. VII. CONCLUSION In order to survive and succeed in today’s chaotic times organizations need to device strategies which are competitive and unconventional. One of the steps towards that is to create an innovative and intrapreneurial organization in the long journey and persevere with the philosophy. The idea is to utilize the most important asset of the firm i.e. its people and leverage from it. If this stream of thought is integrated in the business thinking of the organization the people will imbibe it naturally. The biggest threat to these ventures is the change in mindset, it requires a shift from an employer to an intrapreneur or at least creation of an environment where people dare to come up with ideas and have the vision to make it a reality. Management has a critical role to play here and this has been emphasized earlier in this paper. Without their critical support success is remote. Intrapreneurs are the torchbearers of innovative spirit and not only they dare to dream , lead , improvise but inspire others to do the same. As Nelson Mandela once said “And Innovation through Intrapreneurship – A Management’s Perspective as we let our own light shine, we unconsciously give other people permission to do the same….” In a knowledge driven economy harnessing the full potential of your employees is the key. The knowledge is with every individual, management provides a platform, organizations provide a medium and belief in your vision is the catalyst. This results in self inspired and self motivated employees who come each day with fire in their belly and always aim to add value and look for optimal solutions. Innovation is in the ethos of the firm. This can be the greatest asset for an organization in today’s times. VIII. ACKNOWLEDGEMENT There author would especially like to thank Chris M Pugh for his expert guidance and feeds on the MPS Project , and Santosh Velayudhan & Rajesh Bhatia for their patience to review the abstract and manuscript thereby providing her expert opinion on the same. 10
  11. 11. Finally, the author salutes the works of Peter F. Drucker whose management principles have been the starting point of his understanding of the discipline. IX. REFERENCES Pinchot, G (1985). Intrapreneuring: Why You Don’t have to Leave the Corporation to Become an Entrepreneur, New York: Harper and Row. Covin, J O and Miles, M P (1999). “Corporate Entrepreneurship and the Pursuit of Competitive Advantage,” Entrepreneurship Theory and Practice, 23(3), 47-63. Piramal, Gita; Bartlett, Christopher A and Ghoshal, Sumantra (2000). Managing Radical Change: What Indian Companies Must Do to Become World Class, New Delhi: Viking Studio Books (Penguin Books India). Guth, W D and Ginsberg, A (1990). “Guest Editor’s Introduction: Corporate Entrepreneurship,” Strategic Management Journal, 11(4), 5-15. Hamel, Gary (2002). Leading the Revolution, Revised Edition, Boston, Massachusetts: Harvard Business School Press. Kaplan, Robert S and Norton, David P (2001). The Strategy- Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, Boston, Massachusetts: Harvard Business School Press. Innovation through Intrapreneurship – A Management’s Perspective 11