Intrapreneurship is a hot trend in corporate innovation, but what is intrapreneurship exactly? In today's blog post we offer a definition, some of its key features and its pros and cons.
What is intrapreneurship?
Intrapreneurship is a type of innovation in business that takes place within an established company. By mimicking the entrepreneurial spirit and procedures, intrapreneurship consists of creating new ventures or businesses within an existing company, in order to innovate, and find new business models and business opportunities.
In other words, intrapreneurship can be understood as behaving like an entrepreneur in an already-existing company. Therefore, intrapreneurship is also known as corporate entrepreneurship.
Contrary to open innovation, intrapreneurship seeks innovation without participating with external agents, such as startups, universities or the public administrations. Instead, the company that wishes to innovate uses their own resources and exploits them in order to create new ventures, products, services, or companies.
Intrapreneurship -just like any other type of business innovation- can be applied to different areas of a business: product, services, processes, business models, and so on and so forth.
Entrepreneurship vs. intrapreneurship: What are the differences?
The main difference between an entrepreneur and an intrapreneur is the context they work in. While an entrepreneur seeks to create a new company or product for themselves and in an independent way, an intrapreneur seeks the same objective within an already existing company.
Both profiles share the same characteristics: they need to be inspiring, persistent, creative, and ambitious. The only difference is the ownership regarding the new business. In the entrepreneur case, the ownership remains theirs; while in the intrapreneur case, the new business remains the company’s.
Key features of intrapreneurship
- A type of closed, corporate innovation
- Entrepreneurial spirit
- Seeking new business models and opportunities for an established company
- Creating new companies or ventures within an established company
Advantages of intrapreneurship
This type of corporate innovation is proven to be successful for a myriad of different reasons. These are some of them:
- Increasing efficiency. Applying internal innovation at a certain company can help increase its efficiency, by optimizing processes, identifying suboptimal processes and fixing them.
- New products, services or business models. The core objective of innovation is often finding a breakthrough, an opportunity in the market that translates into leading the market with an innovative service. Thus, implementing intrapreneurship mayu be the path to finding new products or services to complement your company’s current portfolio or finding new business models that can substitute an obsolete one or simply complementing a successful one.
- Change of culture. When an entrepreneur or intrapreneur enters the room, their enthusiasm becomes contagious. Having an innovative and creative way of working causes interest in the rest of employees and favors innovation throughout the whole company. Plus, they will build tolerance for failure and appreciate the importance of testing new ideas.
Disadvantages of intrapreneurship: Is it for everyone? How to tackle them
Starting an intrapreneurship program sounds like a good idea and the truth is most companies are indeed aware of the importance of innovation to keep up their game. Nevertheless, intrapreneurship isn’t necessarily a good option for every company.
As we have discussed in previous blog posts, jumping into innovation is not always easy. There are many barriers to innovation, and intrapreneurship is one of the toughest types of innovation, if your company is completely new to it.
As we have stated previously, corporate entrepreneurship is a kind of internal innovation. This means that the company needs to create a whole department for it and use their own resources to develop its innovation projects. If your company doesn’t do any type of innovation at the moment, this means you will need to deviate resources to find new employees, compose a new innovation department, and include this new way of thinking in the company’s strategy as well. This last point is probably the most important, since it may imply putting an obstacle to your current roadmap.
Knowing if intrapreneurship is for you depends on factors such as the company size, its income, its number of employees, and so on and so forth. If you think your company is mature enough and is ready to fully commit to it, go ahead! If unsure, keep in mind that there are many other types of innovation that you can opt for. Don’t know where to start? At Corporate Lab, we create new business models and ventures for well-established companies. If you are curious about what we may start together, drop us a line. Let’s build something together!