Almost 88% of the companies that composed the Fortuna 500 are no longer listed, some were acquired or no longer significant. According to Professor Richard Foster from Yale University, the average lifespan of a company has decreased by more than 50 years in the last century. That is from 67 years in the 1920s to just 15 years today.
If we check the global brand ranking, that lists the companies we perceive as being the ‘most’ innovative, on the top of the list we find “Apple, Google, and Amazon”, and those that fail to innovate eventually will exit the list as Marlboro and Nokia did.
Why Do So Many Companies Fail To Maintain Their Place?
The world is changing at incredible speed, so the capacity to adapt to the market goes beyond consumer preference or needs, environment, social change, and new technologies are making this even more complex. Companies must learn to evolve quickly, test new paradigms and disrupt their own markets. We have seen more and more business disrupted by newcomers such as Blockbuster by Netflix, the hotel industry by Airbnb and the Taxi industry (more globally mobility industry) by UBER or Bla Bla Car.
Intrapreneurship is not the single answer to this question, but intrapreneurship payoffs are proven. It is a rewarding strategy to harness innovation and, optimizing the current portfolio. As discussed in our first blog “The inner side of intrapreneurship”, Intrapreneurs, dream, think and create from the inside. Intrapreneurship is becoming one of the major strategies to foster innovation.
Here Are Five Reasons Why Companies Must Nurture These Initiatives
1. Create A Continuous Stream Of Internal Innovation
Because of the nature of their projects, Intrapreneurs are highly committed to implementing their ideas with a strong drive to achieve success.
To let innovation to flourish, we need a continuous flow of ideas and I mean a lot of ideas.
For instance, when Intel decided to start investing in the ideas of its staff in 1998 with its “new business initiative.“, more than 400 ideas were pitched by employees with over two dozen receiving funding after a year of its creation.
Intrapreneurship@IBM is a program designed to foster corporate entrepreneurship and help bring IBM’s innovation to the market. IBM set the record with 7,534 patents in 2014 — marking the 22nd consecutive year that the company topped the annual list of U.S. patent recipients.
Supporting intrapreneurship attitude within an organizational culture will increase the number of new ideas being pursued and adopted.
2. Gain A Competitive Edge
Companies are looking for a competitive advantage, new opportunities and strategic differentiators to keep relevant and grow. Intrapreneurs nature is to question the status quo. They use to work on projects that can change this status quo and enable the organization to explore new paths to achieve growth. The organization that does not support intrapreneurship, are missing this internal shake.
“The best-selling console in the world” that position Sony in the gaming industry, Sony PlayStation. This happened because a junior employee Ken Kutaragi spent hours trying to make his daughter’s Nintendo do more powerful and user-friendly, but his idea was reportedly rebuffed by many Sony bosses – hesitant at joining a gaming industry they considered a waste of time. One senior employee spotted value in Kutaragi’s innovative product and the rest, as they say, is history.
3. Grow Profit And Top Line Revenue
Several examples demonstrate how Intrapreneurs contribute to growing revenue and profit. 3M post –it Note is producing 50 billion each year, and Gmail that come out of Google 20 percent time policy with has more than 1.5 billion Gmail users in 2018 or to a different scale let’s recall Josh story and” Magnolia” solution which is making 30 Million euros revenue per year for his company.
4. Attract And Retain Talent
The war for talent just started, McKinsey Quarterly article stated that by 2020, developing economies could have a shortage of 45 million workers with secondary-school educations and vocational training.
It’s getting harder and harder for large companies to find and retain intrapreneurs. Unhappy at having their ideas refused, managing bureaucracy and bottlenecks. Many of them are opting to join startup or companies, where they are granted more freedom.
Some companies have adopted a new way of keeping this talent by allowing employees to their desire to develop new ventures. Google 20% time policy attracts many talented people and Dreamworks encourages all staff to be part of the filmmaking process by sending in their own ideas.
A new generation of workers are demanding a new way of working and businesses that want to recruit and retain top talent need to embrace intrapreneurship as part of their innovation process
5. Boost Innovation Culture
Innovation plays a vital role in the organizations and intrapreneurs are a fundamental part of this cultural change. They explore new ideas in a safe environment. From improving existing products and services, creating a new market, new organization and processes.
Intel has a strong record of encouraging intrapreneurship. In 1998, it launched its New Business Initiative (NBI). Every year, the initiative allows employees to pitch their ideas, with the winners receiving funding and incubation.
DreamWorks teaches employees how to formulate their pitch and allows them to practice in front of executives.
In conclusion, the reasons why your company should consider intrapreneurship seriously is that intrapreneurs are change agents. They blaze new trails. They become the very change they wish to see. Not driving change, but modeling change so others can change as well.
In short, intrapreneurship will enable your organization to effectively accelerate and manage change.
Intrapreneur makes the best use of the given resources. This, of course, makes them different from other employees as others ask for more resources. Intrapreneurs try to use the given resources to the fullest and this leads to high profit.
Therefore, companies must be considered seriously and develop an environment that motivates employees to opt for the intrapreneurship path. We will talk more about those companies’ strategies later.
Intrapreneurship is proven and must be part of a bouquet of strategic initiatives to create a continuous stream of innovation, gain a competitive edge and question the status quo. It is proven that contribute to growing and profit, it helps to attract new talent and boost innovation culture.
Share your ideas, why companies should consider intrapreneurship?