While entrepreneurs like Jeff Bezos of Amazon, Oprah Winfrey and Elon Musk of Tesla are well-known, intrapreneurs often work in obscurity for decades. According to the Small Business Administration, an entrepreneur is someone who organizes and manages a new business venture, assuming all of the operational risks while seeking a long-term profit. In contrast, an intrapreneur thinks like an entrepreneur but works in an established enterprise owned by other parties.
Some intrapreneurs eventually transform into entrepreneurs. A notable example is Steve Wozniak — he was compelled to leave Hewlett-Packard (HP) because HP would not support his desire to develop a personal computer for mass production. As we now know, he left HP and co-founded Apple Computer with Steve Jobs.
Intrapreneurial programs are less well-known than entrepreneurial success stories, but the concept has been around for more than 30 years. In 1985 Steve Jobs attributed much of Apple’s early success to intrapreneurs within the company: “The Macintosh team was what is commonly known as intrapreneurship: a group of people going, in essence, back to the garage, but in a large company.”
Encouraging Innovation — Entrepreneur or Intrapreneur?
In the digital age, successful innovation usually represents a key distinction between market leaders and followers. Intrapreneurs are often a major part of the successful innovations in both entrepreneurial organizations and large established organizations. However, a “brain drain” occurs when there is an exodus of these intrapreneurs with specialized skills — like Steve Wozniak departing Hewlett-Packard because HP was not a conducive environment for implementing his innovative ideas.
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The departure of successful intrapreneurs from established companies happens at a surprising pace. A study conducted by Tomas Chamorro at Harvard determined that 70 percent of successful entrepreneurial ideas started when individuals were working in an intrapreneurial capacity at an earlier employer. When this exodus happens within a competitive business environment, business leaders can quickly become followers. Try to imagine how differently Hewlett-Packard would have developed if Steve Wozniak had been encouraged to advance his dream of a personal computer while still at HP.
How Many Intrapreneurs?
It was revealed in another study that about 5 percent of employees are natural innovators — and 10 percent of the natural innovators are intrapreneurs. With this finding, a company with 1,000 employees is estimated to have 50 innovators and 5 intrapreneurs.
Here is how Sir Richard Branson of the Virgin Group describes the success with intrapreneurs: “Virgin could never have grown into the group of more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain.”
More Intrapreneurs Than Entrepreneurs
In most cases, companies are likely to have many more intrapreneurs than entrepreneurs. Some companies have used intrapreneurship as an integral part of their growth strategy. Apple Computer is an early example of this, and the Virgin Group illustrates a more recent case.
Sir Richard Branson is a well-known entrepreneur who provides ongoing credibility for the value of intrapreneurs in innovating and building successful businesses. Several years ago he published a long essay about intrapreneurship. This is one of his revealing insights about the need for both intrapreneurs and entrepreneurs:
- “A title that hasn’t gotten nearly the amount of attention it deserves is entrepreneur’s little brother, ‘intrapreneur’: an employee who is given freedom and financial support to create new products, services and systems, who does not have to follow the company’s usual routines or protocols. While it’s true that every company needs an entrepreneur to get it under way, healthy growth requires a smattering of intrapreneurs who drive new projects and explore new and unexpected directions for business development.”
On a closing note, very few companies seem to pay attention to the promising possibilities of intrapreneurs — making more effective use of intrapreneurs might have a place within a contrarian management and investing strategy.
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