Intrapreneurs – employees with entrepreneurial flair – can be a challenge. But if they are effectively engaged, they are usually the catalysts for new business growth and opportunities. Portia Hickey looks at how to engage and retain this new breed of business catalysts.

When Sir Alan Sugar chose the young ‘scatty’ Simon Ambrose over the high performing, more mature and settled Kristina Grimes to be his apprentice – in the latest reality TV series ‘The Apprentice’ – it came as a shock to many. Although full of raw talent, Simon was a higher risk candidate than the more mature and stable Kristina. But what Sir Alan saw in Simon was a young budding entrepreneur. Employees with entrepreneurial flair who operate within an existing organisation, better known as intrapreneurs, have particular attributes that make them appealing to organisations, even though they also pose a high-risk investment.

Like Sir Alan, many organisations are interested in hiring intrapreneurs, like the ‘Simons’ of this world, because they are the very people that are usually capable of tapping into new areas of business growth.  They often act as the growth engine for the business by spotting new opportunities for business growth and tend to get a huge a psychological payoff through pursuing them, growing them and making something of their own. Because of their very nature intrapreneurs spot opportunities to do things differently and they make things happen. As organisations need to be increasingly agile and responsive to their customers, grow, add value and innovate, they need catalysts for this kind of change in their business.

To see the potential return on investment of intrapreneurs you only need to look at what happens when they leave. Research suggests that the venture capital industry is producing 35% return on investment by taking frustrated R&D people out of large companies, and financing their ideas.* One famous example of in-company intrapreneuring is the post-it note, innovated by a staff member of 3M, as a result of a policy allowing employees to spend 15% of their work time on a new business venture or idea.

Intrapreneurial characteristics
Psychologically speaking, intrapreneurs are a little bit different than other employees. Like entrepreneurs, intrapreneurs tend to actively seek situations or opportunities that will allow them to push themselves out of their comfort zone. Although many believe they are extravert, this is not the case. They are not necessarily more outgoing than the rest of us, they are just more open to new experiences, love variety and different challenging experiences. They also tend to be less neurotic than most of us. Intrapreneurs are comfortable with and stimulated by working in ambiguity. They have an ability to spot opportunities by making connections between things that others don’t see. They can easily identify ways to add value that others tend not to recognise. Another misconception is that entrepreneurs are big risk takers. Although they may feel less anxious out of the comfort zone than the rest of us, research suggests that, in fact, they just perceive less risk in situations than others do.

But unless an organisation can engage these intrapreneurs effectively, retaining these catalysts and engaging them to get the best out of them can be challenging. That’s because the needs of this breed of individuals are different. Like entrepreneurs, they tend to have a low boredom threshold. They like to have ideas and pursue them. Their desire for variety can mean that they like to pursue several ideas at once, knowing that several of them won’t workout. Many mature businesses, due to operational efficiencies and inevitable bureaucracy, will not be able to provide intrapreneurs the autonomy and freedom required to formulate and pursue their ideas. This means that either the individual’s potential becomes stifled or they leave to pursue other opportunities that they have spotted in the employment market.

Creating the right environment
To facilitate innovation through intraprenuers, organisations need to think about how they structure and organise work. They need to ensure that the personal ambition/vision of the intrapreneur is aligned with the organisation’s goals/vision if they are to effectively engage them. This needs to be reviewed as the person grows within the organisation, and if the group’s interests change, then the energy that comes with that needs to be channelled in an advantageous direction.

Organisations also need to explore how they can enable these individuals to get the variety/challenges that they seek. The BT Group, for example, have established their own ‘dragons den programme’ whereby individuals can have a chance to pitch their ideas to a panel of potential ‘investors’ within BT.  Giving individuals a chance to take their idea through the process of identifying/securing capital, through to implementation and launch, enables them to develop a variety of skills and get exposure to a number of new and challenging experiences/environments.

Making failure safe
A critical element of engaging intrapreneurs is giving them the freedom to fail. This might sound counterproductive but unless an organisation is willing to encourage its employees to take a risk – i.e. beg for forgiveness rather than asking for permission – it will see many ideas never taken forward due to a fear of the repercussions. Although organisations obviously don’t want a costly maverick on their hands, the willingness to facilitate employees taking some risk is essential to engaging and getting the most out of these individuals.

Shell, for example, have recognised this and have established a ‘Game Changer’ programme where they offer the opportunity to employees (and external applicants) to pitch their idea to a panel of experts in order to win seed capital to develop their ideas. Their ideas are developed in a separate organizational structure that is not subject to the same operational restraints or bureaucracy as the rest of the business.  Cisco systems also operate by this model when acquiring new businesses. Their strategy is to not change the structure or ways of working of the newly acquired business because they recognise that to impose their own culture and structure on the new business is likely to have a negative impact on talent retention, and the ultimate profitability and innovation of that unit.

Fulfilling the desire for ‘ownership’
A crucial intrapreneurial characteristic that organisations need to be aware of is the desire to build something of their own. Therefore the process of rewarding and recognising an intrapreneur may also look different. Recognising these individuals in terms of their intellectual or commercial contribution to a company will be uniquely important to their engagement and retention. For example, in our experience, for some technical intrapreneurs the opportunity to own a patent or get funding to attend a high-profile conference to present their work will be extremely appealing, and this will be enough to ensure they use discretionary effort and go the extra mile on their projects.

For an organisation to make the most of its intrapreneurs it needs to identify their strengths and ensure that their role makes the most of those. ER Consultants can help to assess your talent and advise you on how to design roles/paths and manage entrepreneurs in order to get the best possible return on investment.

A case study: How ER Consultants can help
Recently, a global professional services firm engaged ER Consultants to assist it with its succession planning. The organisation was changing its strategic direction and therefore needed a new cadre of staff to support its shift in ways of working. As part of enabling the succession plan, ER Consultants helped to assess the top levels of management. Through our diverse profiling tools and utilising other strategically similar organisations for benchmarks we were able to map their talent population. Through this process we identified talent pools of potential intrapreneurs within the business that were underutilised. Their old ways of working, which was highly structured and bureaucratic, was hindering the performance of the more entrepreneurial staff, many of whom were leaving the company to work for direct competitors with different business structures (e.g. R&D arms).

Through its work with ER Consultants it was able identify this talent internally and reflect on how its ways of working, although efficient, was hindering the entrepreneurial spirit and talents of some of its staff. As a result the business identified a previously obscured talent pool and we have worked with them to identify and design roles that play to their strengths and unlock their creativity. To date, the organization has not only experienced better retention levels and higher margins but, more importantly, the successful integration of a number of new businesses. So our strategy not only helped to identify those intrapreneurs, but it helped to get the best out of them with some pretty amazing results.

Five sure ways to engage and retain an intrapreneur

1. Play to their strengths – create roles that maximise the use of the unique talents of the person.  Too often organisations focus on what is missing or not happening rather than thinking about how to maximise the unique skill sets of its employees.
2. Provide the freedom to develop their ideas – highly rigid and bureaucratic systems restrain innovation and entrepreneurial behaviour.  Organisations need to hold back from imposing the corporate structure on these potential growth engines.
3. Enable the pursuit of several ideas/projects at once – the organisation needs to provide the resources for employees to develop their ideas, the most important resource being time.
4. Be prepared to fail – the freedom to fail is critical, because some will. Entrepreneurs understand this, but organisations need to ensure that they cater for and support this risk.
5. Recognise and reward the ownership of ideas and thought leadership – motivating an intrapreneur will be different from a lot of employees.  Often it’s not just about the money but more about the recognition and the ownership of the idea.

For more information, contact: portia.hickey@erconsultants.co.uk

Reference:

* Gifford Pinchot, Innovation Through Intrapreneuring, Research Management, Vol 3(2), 1987

© er consultants Topics Issue 3, 2007