Entrepreneurship is the practice of embarking on a new business or reviving an existing business by pooling together a bunch of resources, in order to exploit new found opportunities.
What is Intrapreneurship?: Intrapreneurship is the practice of entrepreneurship by employees within an organization.
Difference between an entrepreneur and an intrapreneur:
An entrepreneur takes substantial risk in being the owner and operator of a business with expectations of financial profit and other rewards that the business may generate. On the contrary, an intrapreneur is an individual employed by an organization for remuneration, which is based on the financial success of the unit he is responsible for. Intrapreneurs share the same traits as entrepreneurs such as conviction, zeal and insight. As the intrapreneur continues to expresses his ideas vigorously, it will reveal the gap between the philosophy of the organization and the employee. If the organization supports him in pursuing his ideas, he succeeds. If not, he is likely to leave the organization and set up his own business.
Example of entrepreneurship: A classic case of entrepreneur is that of the founders of Adobe, John Warnock and Charles Geschke. They both were employees of Xerox. As employees of Xerox, they were frustrated because their new product ideas were not encouraged. They quit Xerox in the early 1980s to begin their own business. Currently, Adobe has an annual turnover of over $3 billion.
Features of Intrapreneurship: Entrepreneurship involves innovation, the ability to take risk and creativity. An entrepreneur will be able to look at things in novel ways. He will have the capacity to take calculated risk and to accept failure as a learning point. An intrapreneur thinks like an entrepreneur looking out for opportunities, which profit the organization. Intrapreneurship is a novel way of making organizations more profitable where imaginative employees entertain entrepreneurial thoughts. It is in the interest of an organization to encourage intrapreneurs. Intrapreneurship is a significant method for companies to reinvent themselves and improve performance.
In a recent study, researchers compared the elements related to entrepreneurial and intrapreneurial activity. The study found that among the 32,000 subjects who participated in it, five percent were engaged in the initial stages of a business start-up, either on their own or within an organization. The study also found that human capital such as education and experience is connected more with entrepreneurship than with intrapreneurship. Another observation was that intraptreneurial startups were inclined to concentrate more on business-to-business products while entrepreneurial startups were inclined towards consumer sales.
Another important factor that led to the choice between entrepreneurship and intrapreneurship was age. The study found that people who launched their own companies were in their 30s and 40s. People from older and younger age groups were risk averse or felt they have no opportunities, which makes them the ideal candidates if an organization is on the look out for employees with new ideas that can be pursued.
Entrepreneurship appeals to people who possess natural traits that find start ups arousing their interest. Intrapreneurs appear to be those who generally would not like to get entangled in start ups but are tempted to do so for a number of reasons. Managers would do well to take employees who do not appear entrepreneurial but can turn out to be good intrapreneurial choices.
Examples of Intrapreneurs:
A lot of companies are known for their efforts towards nurturing their in-house talents to promote innovation. The prominent among them is “Skunk Works” group at Lockheed Martin. This group formed in 1943 to build P-80 fighter jets. Kelly Johnson was the director of the project, a person who gave “14 rules of intrapreneurship”.
At “3M” employees could spend their 15% time working on the projects they like for the betterment of the company. On the initial success of the project, 3M even funds it for further development.
Genesis Grant is another 3M intrapreneurial program which finances projects that might not end up getting funds through normal channels. Genesis Grant offers $85,000 to these innovators to carry forward their projects.
Robbie Bach, J Allard and team’s XBOX might not have been feasible without the Microsoft’s money and infrastructure. The project required 100s of millions and quality talent to make the product.