Michael Goldman & Associates, L.L.C. - Consulting & CPA Services

Reinventing the Intrapreneur – Dean Takahashi

Intrapreneuring –

• Alters an organization’s status quo

• Harness the energies of talented renegades

• Give sponsorship to promising businesses that were unrelated to the company’s cash cows.

30% of large companies now provide seed funds that finance in-house entrepreneurial efforts.

Companies need to find ways to head off jealousy in non-intrapreneurs

Intrapreneurial companies:

• Shorten the search for funding

• Offer a stable paycheck as an idea germinates

• Find creative ways to reward employees and let them get rich from their creations

• Can have longer time horizons than venture capitalists have

• Allow people to speak their minds and proceed with their plans if they have sufficient evidence and arguments

• Allow employees to take risks without fear of reprisals

• Have a formal process for moving an idea from research to product to market.

• Understand the right balance between structure and spontaneity

 New Ventures for Corporate Growth – Edward Roberts

As with new entrepreneurial ventures, the odds against success are enormous.

Most new ventures within existing corporations share the following characteristics:

• Selling new products or existing products in new markets

• Most ventures involve a new technology

• Most ventures have a different form and structure than that in use throughout the rest of the organization.

The combination of these factors makes their joint probability of success very small.  Even though the odds are small, the alternatives are no better – no other strategy for enhancing growth in size and profitability currently offers a higher probability of success.

Goal is to merge the entrepreneurial commitment, innovative behavior, and advanced technology of small companies with the capital availability, marketing strength, and distribution channels of a large company.

3M, the leader in intrapreneurship, encourages internal competition and duplication of resources.  Most efficient companies try to eliminate these.  There are no constraints such as new ventures needing to be related to existing ventures, markets, production methods or capacities, etc.  3M also recruits people for new ventures, as opposed to assigning them.  Assigned people tend to be a lot more negative than recruits.  If no one volunteers, that says volumes about the new venture’s potential.  Failure is not punished – nobody loses a job because of it.

Some thoughts on career management – William Sahlman

Entrepreneurs typically make less current income than investment bankers or consultants, but they more than make up for it in wealth accumulation.  Moreover, because they have lower short-term salaries, their expenses are more regulated.  Lower personal burn rates translate into greater flexibility.

There is very little correlation between happiness and current or even long-term income.  Happiness is associated with enthusiasm about going to work and enthusiasm about going home.  People who set out to make a lot of money typically do not – they focus on the wrong issues.

The Discipline of Innovation – Peter Drucker

Sources of Innovation and Opportunity;

• Unexpected occurrences

• Incongruities

• Process needs

• Industry and market changes

• Demographic changes

• Changes in perception

• New knowledge

Typical corporate reporting systems suppress most of the information needed in these areas.

Innovation requires work, knowledge, and focus, and ingenuity.

Ground-Level Innovation

Talk to your customers

Listen to your employees

Consider everything

Don’t get hung up on past knowledge

A few things every manager ought to know about risk – Jim Billington

Probability theory and decision-making

Human tendency to focus much more on the downside than on the upside

Taking too little risk can be as much a management failure as taking too much.

Starting new business inside the organization

Intrapreneurship means bottom-up, off-the-beaten-track business building, spearheaded by people who yesterday were working as line managers or employees.  It is inconsistent with reengineering, downsizing, and other efficiency methodologies.

It is the business plan step that separates true intrapreneurship from a glorified suggestion system.  The goal is to foster new ventures, not just stimulate the production of ideas.

Intrapreneurs need both incentives and a strong safety net.

Business building involves monitoring progress through metrics such as revenue growth and market share rather than bottom line earnings.

Making Intrapreneurship Work

Understand the difference between entrepreneurship and intrapreneurship

Understand success factors required to be an intrapreneur

Understand how to apply intrapreneurship in large companies

Making Intrapreneurship Work

"Smaller Still Works Better"

Corporate Attitude to Intrapreneurs

CEO and top management set the tone

Access to corporate resources

Defined corporate culture

Hiring, training, incentives, rewards

Collective Corporate Entrepreneurism - R. Reich

Key to continual growth

key to maximizing productivity

innovation is continuous and collective through-out the organization

capability, attitude to improve, adjust, adapt, upgrade continuously

Collective Corporate Entrepreneurism - R. Reich

Traditional hierarchy lines blur & diminish

must have close relationships with outside stakeholders

suppliers, brokers, distributors

creditors, banks

cities, communities

Small and Fierce is Better - Tom Peters

Not bound by conventional rules

Faster, more responsive in all sectors

Timely decisions and solutions

Speed, surprise are the key elements

Powerful, cross-trained teams

Access to powerful support resources

Small, Powerful I Ventures

Redefine Customer Relationships

get closer, more responsive

more innovative

more customizing

Faster Company Growth Potential

Advantages of Intrapreneuring over Entrepreneuring

Capital Sources

Access to customers

Infrastructure

Management Pools

Leverage on an existing business

Disadvantages of Intrapreneuring vs. Entrepreneuring

Continuity of Sponsorship

P & L Focus

Short Term Mentality

Corporate Meddling, Bureaucracy, Decision by committee

Lack of Passion

Have to be big to be material

Aversion to risk

Success Criteria

Strong management - ability to build and educate

Stable, supportive, competent sponsorship and governance

Good market opportunity / business model

Favorable corporate culture

Potential contribution to corporation

More Success Criteria

Utilizes Core Competencies of the company

Patience

Committed capital

Independence

Superior Planning

What can YOU do as an Intrapreneur Wannabe?

Get cross-trained with new jobs in the company

Foster top management exposure

Study the company as a strategic outsider

Recommend strategic new growth businesses to top management

Get prepared, then take risks

Move to an Intrapreneurial company after preparation

Get a mentor

Ask lots of questions

Listen to him / her

Don’t be afraid to discuss issues

Express your gratitude

Let your mentor share in your success

Get even more advisors

People support that which they help to create

People are more enthusiastic when they are involved

Growth businesses have many stages, and may need many advisors

Active involvement with your peer group teaches you about the company and the industry

Continually learn

Read trade magazines

Listen to your customers

Don’t be afraid to hear criticism

Get input from outsiders

Have the right thought process

Operate your business day-to-day, but think year-to-year

Goals should be realistic and reachable within a reasonable time

Goals should be quantifiable

Clearly communicate ideas and goals

Respond to change in a positive manner

One "Never"

Never become a director, officer, or stakeholder of a company in which you cannot exercise a significant and meaningful degree of control.

One "Always"

If you bore the risk, take the credit

True or False?

"The biggest difference between Intrapreneurship and Entrepreneurship is that the former has lower risk and lower return"

[ Home ] [ Up ]

Send mail to michaelgoldman@mindspring.com with questions or comments about this web site.
Last modified: March 31, 2007