Big Companies That Embrace Intrapreneurship Will Thrive Without innovation, enterprises get too "comfortable" with past successes, and eventually go out of business.
By George Deeb Edited by Jessica Thomas
Opinions expressed by Entrepreneur contributors are their own.
It has been well-documented that big companies typically struggle with innovation. Once companies get to a certain size, their investors become more conservative, their leaders less entrepreneurial and their employees less willing to stick their necks out with "out-of-the-box" ideas that may not work out, resulting in them losing their jobs. Without innovation, companies get too "comfortable" with their past successes, and eventually go out of business (see Woolworth, Montgomery Ward, Borders, Blockbuster, American Motors, Pan Am).
Although that is largely the rule, there are several examples where entrepreneurship inside a large organization can and does prosper. This is the world of intrapreneurship, a term popularized by academic researcher Howard Edward Haller, management consultant Gifford Pinchot III and the great Steve Jobs back in the early-to-mid 1980s.
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Several big companies today actively promote intrapreneurship within their organizations, allowing their employees to spend 10 to 20 percent of their time on innovative ideas that are unrelated to their normal jobs. Companies such as Google, 3M and Intel are well known for their efforts in this regard. Not surprisingly, these are some of the best performing big companies in the world of business today. But they are surely the minority, and more big companies need to get on board.
Here are several examples of some of the best products and businesses that were born out of intrapreneurship inside a big company (with hall of fame honors to Steve Jobs at Apple, Richard Branson at Virgin and Larry Page and Sergey Brin at Google for leading serial intrapreneurial successes at their companies):
- Mac, iPod, iTunes, iPhone, iCloud inside of Apple
- Gmail, Google News, AdSense, driverless cars, Google Glass and other innovations inside of Google
- The numerous divisions launched by Virgin: Air, hotel, casino, books, music, Megastore, mobile, wines, games, Galactic
- PlayStation inside of Sony
- Saturn inside of General Motors
- Post-It Notes inside of 3M
- Elixir Guitar Strings inside of W.L. Gore (makers of GoreTex)
- SkunkWorks fighter jet project inside of Lockheed Aircraft
- Java programming language inside of Sun Microsystems
- Digital Light Processing technology inside of Texas Instruments
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Big companies looking for innovation should create a culture of intrapreneurship. Let employees know it is OK to spend part of their days tinkering around with new ideas. Let them embrace that it is OK to make mistakes, and that failure will not be punished if things do not go as planned. Hire people that have entrepreneurship wired into their DNA and promote to leaders those who are not afraid to make decisions on their own and take risks. Most importantly, stop focusing on next quarter's profits, and start focusing on the next decade's worth of revenue growth.
If you are an employee or seeking another job, search for companies that let you spread your wings. When you do find that right company, don't be reactive, sitting back and waiting for opportunities to present themselves. Be proactive and take the lead on whatever great idea that has a chance to become a major future revenue driver for your employer, and pitch it to management.
At the speed in which change is happening in the business world today, big companies that do not embrace innovation and intrapreneurship will fall by the wayside. The companies that do embrace it will surely distance themselves from their competitors and thrive long into the future.
