3 Reasons Companies Need Intrapreneurship
Not everyone is cut out to be an entrepreneur. However, companies can foster employees' entrepreneurial mindset and stay competitive by encouraging intrapreneurship.
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Most of us are familiar with the concept of being an entrepreneur. It can be a challenging path, and understandably, not everyone wants to take on that responsibility. But what if we could encourage that entrepreneurial spirit in our employees? The situation is potentially win-win – for the employee and for the company.
Intrapreneurship is the system wherein the principles of entrepreneurship are practiced within the boundaries of a firm. An intrapreneur is a person who takes on the responsibility to innovate new ideas, products and processes or any new invention within the organization.
Here are three reasons why intrapreneurship is important to long-term business success.
Related Links: Big Companies the Embrace Intrapreneurship Will Thrive
1. Employee engagement
In Gallup's 2016 Meta-Analysis Report, the results showed that employee engagement consistently affects key performance outcomes like company profitability, regardless of the company's industry.
Jim Harter, Ph.D., Gallup's chief scientist of employee engagement and wellbeing, says "Employee engagement continues to be an important predictor of company performance even in a tough economy. When you ask people about their intentions during a recession, it's pretty clear that disengaged workers are just waiting around to see what happens. Engaged workers, though, have bought into what the organization is about and are trying to make a difference. This is why they're usually the most productive workers."
And how do we create engagement?
Intrapreneurship can be an effective strategy to keep millennials engaged at work.
If an intrapreneur sees that their idea is valued by their organization, it leads to a feeling that they can make a positive impact on the company's future, ultimately heightening motivation. If you then, also, implement a system that rewards innovation, you have employees that are incentivized.
Related Links: Here is How Companies Can Promote Intrapreneurship
Continuous idea flow to remain competitive
If only a few people within an organization, such as the senior leaders and C-Suite, are able to come up with ideas and implement them, this severely limits the potential for innovation that a company has. In many cases, senior leadership is far removed from the end user and their wants and needs.
Intrapreneurship draws on a larger pool of ideas consistently. Innovation, rather than being a process that happens one to two times per year, needs to be a way of life in order to really reap the rewards.
Take Google for example. Its intrapreneurial successes have included: Gmail, Google News, AdSense, driverless cars and Google Glass.
In order to make it work, a focused approach to innovation needs to be taken. There needs to be a system in place to assess the ideas, and budget and time allocated to employees developing them and proving "proof of concept."
Related Links: 4 Ways to Build a Culture that Supports a Future-Proof Business
Crucial to long-term sustainability
According to Deloitte, 88% of Fortune 500 companies in 1955 are no longer present in 2015. To understand what needs to happen to make sure you are around in five to 10 years as a company, you can draw inspiration from highly innovative companies and observe what they are doing.
Do you remember the search engine, Ask Jeeves? I do, just about. You cannot find it anymore. Google might not have been the first search engine, but it has certainly stood the test of time.
Companies often learn the hard way about the importance of this. Complacency or staying in your comfort zone is not something any business can afford these days. The behemoth, Blockbuster, is a good example of what happens if we don't foresee trends. This is even more important nowadays as technology exponentially increases the pace of change.
It is time that companies really asked themselves the question of what they are doing to encourage intrapreneurship. And more importantly, what is the lost opportunity cost of not encouraging it?