Building from Within: Why SMBs Need Intrapreneurship

edited October 2023 in Business

American businessman Farrah Gray has the famous saying, “build your own dreams, or someone else will hire you to build theirs”. This statement gives the impression that company employees are always solely working to make an employer’s idea come true. This, however, is not always the case, thanks to intrapreneurship. 

Intrapreneurship — a term that interestingly doesn’t circulate around very often — refers to a system where employees can take agency and conduct entrepreneurial projects within a company. An intrapreneur, therefore, can be thought of as an entrepreneur within a company. In all cases, the employee sees opportunity in a business idea and acts on it, developing a new product or service that could potentially bring in more revenue to the company. Intrapreneurship can also be based on other initiatives, such as to enhance corporate social responsibilities. It is particularly important for small to medium-sized businesses (SMBs), as intrapreneurship is where business ideas are generated, and where employees get to unlock their creative potential. 

Intrapreneurship vs. Entrepreneurship

A common question is how intrapreneurship differs from entrepreneurship. Intrapreneurs work on their business ideas within the confines of the companies they already work for; entrepreneurs, on the other hand, have their own projects and businesses. 

In simple terms, intrapreneurs and entrepreneurs are different because of where they work on their ideas and how they handle risks and resources. Intrapreneurs are people who work on new ideas within the company they already work for. They use the company’s resources and share the risks and the rewards with their company. This means they have some support and help from the company while working on their ideas.

On the other hand, entrepreneurs work on their ideas independently, starting their own businesses. They have to find their own resources, like money and people to help them, and they make their own decisions about their projects. Entrepreneurs get to keep the profits they make, but they also have to deal with all the problems and risks on their own.

One well-known example to illustrate intrapreneurship is the invention of Post-it notes at 3M, a multinational conglomerate that applies scientific ideas to product creation. In the 1960s, 3M employee Spencer Silver invented a low-tack, pressure-sensitive adhesive (albeit somewhat by accident – he originally wanted to invent a stronger adhesive). Years later, his colleague Arthur Fry decided to “bookmark” his hymn book with a piece of paper that had this low-tack, reusable adhesive on it. The idea was a success, and post-it notes became a globally-known intrapreneurial project at the company for decades to come. 

While 3M as a company was not originally established with the idea of selling post-it notes, this innovation within the business is a classic example of outstanding intrapreneurship. With this intrapreneurial idea, the business had an excellent product to manufacture, which not only grew the business but also increased the company’s innovative power. Crucially, 3M gave its employees the resources and the stage to experiment ideas, ultimately developing a new product. This showcases how Intraprensurship can only truly take place with adequate insight and support from the company’s higher-ups.

Benefits of intrapreneurship 

There are multiple benefits of Intrapreneurship, which can be analyzed from the perspectives of both the business and the employee:

From the perspective of the business 

Intrapreneurship implies the open-mindedness of business, demonstrating that top-level executives have trust in their employees to innovate. With intrapreneurship, the higher-ups of a business would open themselves to more perspectives and creative ideas. The goal of business is ultimately to expand, and intrapreneurship is where new projects are born. This, therefore, is key for cultural transformation, and it also drives innovation by introducing novel ideas, products, and services that help a business appear more competitive. 

From a more technical perspective, intrapreneurship allows a business to truly use its human capital, allowing employees to give their best ideas with their existing expertise. It creates room to innovate with what the existing company infrastructure can offer, taking up less financial investment. Intrapreneurship also allows testing of new business ideas with a business’s existing resources before it is fully launched as a product, with more efficient adaptation based on team feedback. 

From the perspective of the employee

Intrapreneurship motivates employees to actively contribute to a business’s innovation, beyond just completing their assigned tasks. This can lead to greater job satisfaction, reduced turnover rates, and a sense of belonging and being for the employee. An intrapreneurial culture encourages employees to keep thinking out of the box, putting a close eye on what could be considered the best ideas in their fields. 

It is also necessary to mention that with intrapreneurship, employees would run less financial risk compared to entrepreneurship. This could be an opportunity for employees who aren’t risk-takers by nature, but who still have innovative ideas for business nonetheless. 

Challenges of intrapreneurship

Fear of change

It is common to fear intrapreneurship as a concept, as it is not as often discussed as entrepreneurship, and there are fewer resources to learn about it. Remember, however, that intrapreneurship is all about continuous learning, as well as trial and error; both success and failures are seen as a chance for the company to grow.

Resource allocation

Intrapreneurship takes time and resources, and it may be a challenge in the beginning to set that aside. Financial investment can also be another common concern, so the efficient use of lean methodologies to experiment with ideas, without putting in heavy investments, would be something to keep in mind. 

Maintaining alignment with the core business

It is important for intrapreneurial projects to not interfere with the progress of existing projects, so it is critical to establish clear parameters for what can and cannot be done with intrapreneurial projects. Whether or not the intrapreneurial business idea sits well with the company brand is also another important one to address. 

Steps for SMBs to embed intrapreneurship into their company

Intrapreneurship may sound like a novel, challenging idea, but here are some steps to help you facilitate the process:

1. Create communication channels for your employees

To foster an intrapreneurial culture, the first step is to encourage employees to voice their business ideas through simplified communication channels. Whether it be suggestion boxes in common areas, or monthly brainstorming sessions, you would need to create a space where employees feel welcome to share their creative thoughts. The importance of open communication is well-documented in organizational psychology, showing a direct correlation with increased employee engagement and innovation. Avoid bureaucratic procedures that may put off employees from speaking their minds, as this can stifle creativity and hinder the free exchange of ideas.

2. In-house training

Each of your employees–even if they share the same title–likely have different skill sets. Harness this diversity by having them use their expertise to teach fellow coworkers valuable skills or brainstorm new ideas for your company. Structured interactions, such as peer learning programs or hands-on workshops, can serve as an important learning experience for all employees. It also serves as an important catalyst to meld different perspectives into coherent, novel ideas.n Intrapreneurship, after all, is based on a culture of continuous learning. 

3. Celebrate small wins

To truly foster intrapreneurship, it is necessary to celebrate any progress made and to make it clear to employees that their innovation is appreciated. This does not have to be in the form of huge financial awards– even a genuine letter of encouragement from the CEO may go a long way in cultivating an ongoing intrapreneurial culture. When employees perceive their efforts and contributions as valued, it fosters a sense of belonging and reinforces their commitment to organizational goals and the intrapreneurial project. By consistently recognizing and celebrating small wins, organizations can cultivate an environment where innovation thrives, and employees are motivated to contribute their best ideas.

4. Project management and feedback mechanism

For intrapreneurship to work, effective project management must be implemented. This would entail regular check-ins, meetings, reviews on feasibility, and channels for feedback to implement the idea. The need for meticulous project management in intrapreneurship is highlighted by the inherent uncertainty and risk involved in pioneering new ideas. For SMBs, where resources are typically limited, the impact of well-structured project management is even more pronounced. While these entities may already employ robust plans and strategies for existing projects, applying sound project management principles is imperative when navigating the uncharted territories of intrapreneurial initiatives.

Recognizing intrapreneurship as a productive way to run a business

Regardless of a business’s size,it is crucial for top leaders to be open to the innovative potential within their teams since the best ideas may not always emanate from the top. It is productive for a company to recognize intrapreneurship not just as a way to collect profitable ideas, but also as a channel to develop an encouraging company culture wherein employees feel valued and empowered to contribute original ideas. Intrapreneurship is a gateway into today’s competitive world of commerce, so take your first steps today to implement intrapreneurship into your SMB.

Esme Lee is a science writer and editor in the UK, carrying a passion for tech copywriting. She has a background in educational neuroscience and holds a PhD from the University of Cambridge.


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