Growth and Agility: Why Organisations Need Intrapreneurs

By HEC Paris Professor, Stefano Lovo. This article appears originally on changeboard.

A company’s growth is often accompanied by a strengthening of the means of control an organisation has over its people and practices.

Perhaps through greater formalisation of procedures, or by increasing the number of reporting levels. Though this provides a secure structure for the now larger company to be supported by, this level of bureaucratisation can result in a loss of reactivity. Employees will come to deplore the existence of an inertia that slows down the decision-making process.

But is a company condemned to lose its agility, to no longer be able to seize opportunities and to be, in the end, less innovative as it grows?

Academic literature shows that this is not necessarily the case. And that in the face of such bureaucratisation intrapreneurship turns out to be an effective medicine.

• But what is an intrapreneur?

Most simply, an intrapreneur is defined as an entrepreneur working within a company, or group of companies, to challenge, enhance and create new business activities that will stimulate the growth of the organisation they’re embedded within.

But it is not enough to simply hire an entrepreneur to create an effective intrapreneur. Take the example of an entrepreneur having successfully developed a business which is acquired by a group of companies. The leader is kept on as CEO, but rather than being comfortable the entrepreneur may find this change in status very challenging. Yes, they are still in change of their invention, their business idea, but they might perceive the reporting rules or corporate procedures that come with company expansion or acquisition as arbitrary constraints, hindering their ability to use their entrepreneurial competencies to best effect. Feeling stifled, these individuals may either challenge the system, or chose to leave to focus on a new idea.

This is the main difference between entrepreneurship and intrapreneurship. Intrapreneurs have the souls of developers. They continually seek to cultivate the activities for which they are responsible within a company, but will do so in respect of the organisation’s rules, aims and objectives. The intrapreneur therefore is able to identify spaces of freedom within their roles for development, whilst respecting what is non-negotiable in the eyes of their employer.

• Intrapreneurial mindset

At HEC I’ve had the pleasure of leading executive education activities at a global level for some 15 years. Over this time I’ve noticed that a significant part of our growth and our international recognition is due to the desire from companies to develop intrapreneurial competences within their staff. In an increasingly competitive economy, the ability to create a truly intrapreneurial culture can be used as a source of competitive advantage. The first step is to identify and recognise the efforts of those who behave in intrapreneurial ways.

When I teach this topic in my classes, I like to present students a cartoon that sums up the main obstacle to overcome to develop intrapreneurship. It shows an employee having a conversation with his CEO. He submits an innovative idea to the CEO who replies; “Your proposal is innovative… Unfortunately, we won’t be able to use it here because we’ve never tried something like this before.”

For implementing an intrapreneurial culture within an organisation, leaders must let employees experiment – creating an environment where innovation is encouraged. Just like an entrepreneur may have to fail before succeeding, the intrapreneur must also be able to take risks without fearing the consequences if the attempt goes south.

In consulting assignments or executive education programs I’ve carried out with HEC in Europe, in the United States, Asia and Africa, I’ve routinely met with leaders eager to promote intrapreneurship. But often their behaviour is not aligned with what they preach. They do not allow risk taking and fight against employees who think differently.

The caution displayed by the leaders refers to a resistance to change which they are not necessarily aware of. An intrapreneur can be perceived as a threat. However, whilst it’s true that an intrapreneur is not interested in remaining limited to working within existing knowledge (their penchant for exploration means they are able to get out of habitual mental patterns and think out of the box), this proclivity for innovation can be an employer’s most valuable asset. These explorations can provide positive returns, ensuring the company remains relevant to customers, a challenge to competitors and all whilst keeping the company ethos at heart.

Training, for leaders, has a crucial role to play in helping leaders become aware of the discrepancy between what they preach and what they actually do. For example, leaders willing to promote intrapreneurship must practice empowerment amongst their staff. When employees are empowered they begin to build a sense of ownership over the task at hand. Too often, we see attempts of the hierarchy to appropriate the success of their workers, which is not consistent with the intention to promote intrapreneurship.

Empowerment goes beyond the simple delegation, and instead builds upon employees’ level of motivation. These individuals are, like most, receptive to the financial reward if successful, but their real driver is of another nature. Intrapreneurs like to know that they are contributing to the success of the company, and be recognised as such.

Long live intrapreneurship!

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