A culture of corporate entrepreneurship, or intrapreneurship, is vital to the future of business. For organisations facing adverse conditions owing to global political, economic, and technological disruption, investing in internal innovation is more important than ever. Innovation, even within embattled organisations, not only helps secure survival but can lead to new ways to serve customers and grow the business during uncertain times.
Game-changing innovations need vision, nurturing, and resourcing. Putting ideas into practice requires adroit communication and trust. People need to feel able to experiment and even fail. Companies should allow employees to invest time in their own side-projects, and should invest money judiciously – formal ideation processes may guide investment, but leaders at every level should listen out for innovative ideas that need direct support.
In ‘Corporate Entrepreneurship’, Professor Véronique Bouchard (pictured right) and co-author Alain Fayolle, both of emlyon business school, examine a wealth of academic research and real-life case studies from businesses that have successfully developed a culture of innovation.
MARGINALIA spoke with Bouchard to explore the key traits of successful corporate entrepreneurship. In this interview, she describes how progressive organisations encourage intrapreneurship, and what makes innovation easy or arduous.
Gloria Lombardi: What is corporate entrepreneurship?
Véronique Bouchard: Think of corporate entrepreneurship like an internal start-up. It is also called ‘intrapreneurship’. Essentially, the organisation relies on the initiative of employees to foster and develop innovative projects. Those projects could be, for example, a new business venture, service, or product, but could be about the organisation itself, such as changing internal processes.
What is common among those projects is that they rely on the initiative of individuals, who are empowered to decide what they want to develop. Employees are given lots of autonomy around how to do things they are left on their own to grow the project. But they are also supported by the company through formal or informal processes.
Often, a project starts informally, as people discuss problems and opportunities. They will likely get feedback and resources from their own networks of colleagues, perhaps making use of the enterprise social network. As the project develops, perhaps to a stage where a prototype is built, the project should become officially recognised so that it can be properly resourced. Even though the project is officially recognised, individuals or small teams should still be in charge, managing it from the beginning to the end. This is a core characteristic of corporate entrepreneurship.
This sort of informal kick-start to innovation might be common and maturing within some companies, but rare or novel in others. I find there’s more appetite and momentum across all industries and sectors for internal entrepreneurship.
GL: What sort of cultures facilitate corporate entrepreneurship?
VB: Organisations that are somewhat decentralised and have quite an informal culture where people are trusted tend to be able to foster innovation as I’ve described. Such cultures can be called organic as opposed to hierarchical. Structurally, they are made of many little units, which are fluid and work well without onerous bureaucratic processes. In such organic organisations, communication is very important; people interact and talk to each other across the various departments, functions, and organisational levels.
An organisation that has a culture of sharing will naturally benefit from individual’s networks and the discussions within and across the physical and digital workplace. When someone has an idea, but hasn’t yet completely formulated it, they can find support and expertise from across the organisation to develop their idea into a project. People within such cultures are keen to share their knowledge and experience, and take every opportunity to help others.
But there are organisations more focused on performance. Within a culture of performance, people may still have a lot of autonomy, but they’re also under some pressure not to waste time or money. There could be clear expectations around results. Discussion and networking is still part of the process, but the organisation needs progress and achievements.
I’ve provided lots of examples of well-known companies in the book that have developed such sharing and performance focused cultures, such as WL Gore, L’Oréal, and 3M.
GL: What makes those companies stand out?
VB: The high degree of informality at WL Gore certainly makes it stand out. There are no hierarchical levels; all the employees are so-called ‘associates’. For some people it could be uncomfortable to work without the standard hierarchy, not knowing who the boss is. Such an informal culture is not for everyone.
But the fact that there’s no explicit, obvious hierarchy, doesn’t mean there’s no hierarchy in practice; people are still assessed, and some may be regarded as the most talented. Yet such distinctions are not clear; it can take lots of time to find out who those employees are, as nobody is explicitly, formally labelled as a high achiever or expert.
GL: How might you spot an organisation that is unable to innovate as fast as more progressive organisations?
VB: All companies innovate, but many of them innovate poorly. The less innovative ones lack vision. The innovation portfolio is not managed in a strategic way. There is often lots of inertia. These slower companies don’t implement systems or rules to eliminate poor innovative projects. For example, they go on investing (or wasting) money in initiatives that everybody inside the company knows are not so good.
Companies focused on short-term profit may well struggle with innovation. Their need to control everything stifles innovative practices. Micromanagement stifles innovative thinking. Such organisations monitor each employee very closely to assess performance. Goals are clearly defined and progress, for example, towards a sales target, is closely tracked. This attention can be useful to some extent, but only when it’s done in a balanced manner. If the company does this too heavily, then it’s not possible for employees to have the autonomy and time, which are necessary to corporate entrepreneurship. To truly facilitate innovation, employees need some freedom to elaborate new ideas. If there is no slack, then it becomes difficult for them to develop entrepreneurial projects.
Businesses that implement institutionalised innovation processes tend to be very slow. Their rigidity squashes creativity and the decision-making process moves too slowly to engender momentum. So the project cannot adapt as soon as it needs.
You may also see disconnects between the technology side of the business, the research and development side, and the market. If the company is split into silos then there won’t be efficient and effective circulation of information.
GL: Have you found any geo-cultural differences around how organisations approach corporate entrepreneurship?
VB: In some bureaucratic European countries, like France to some extent, there’s no ‘right to fail’, only the ever-present expectation of success. This is a serious impediment to innovation. Experimentation is necessary, and some experiments will fail or at least fail to succeed as desired. The people involved in such a ‘failure’ will have leant a good deal, and could do better next time. But not every country or culture recognises the value in such a learning experience. There’s a stigma attached to a lack of success. I’m certain people should be praised, and even rewarded, for trying.
In sharp relief, America’s culture has the ‘right to fail’ built in. Many successful Americans talk openly about their failures, how they’ve failed ten times before getting to where they are now.
GL: Yes, a popular phrase associated with innovation is ‘fail and fail fast’. Would you agree with the sentiment?
VB: Yes. Corporate entrepreneurship involves developing small successes, and managing small failures along the way. Risks are mitigated by multiple checkpoints, such as when the individual gets a little money or other resources to turn an idea into a proper business concept. Then additional money and resources can be invested to develop a working prototype or pilot. At this stage now, the potential and actual results need evaluating, and if things are not working out then no further resources need be invested. There’s no cataclysmic failure, just experimentation.
The initial steps are certainly fast; at intervals, the value or viability of the project can be assessed. Changes can be made, investment can be increased or decreased; it’s all about the many checkpoints – evaluations make it impossible to invest in a project that lacks potential. So, there will be no great failures, only some small failures-to-succeed and personal learning.
GL: Is corporate entrepreneurship critical to the future of work?
VB: Yes. Things are moving fast. On the one hand, companies need to have long-term innovation strategies, led from the top with continuing investments. Leaders need to be aware of the latest technologies, and see the opportunities such tech might afford them. Funding such potential opportunities can be expensive, and that’s why the innovation strategy needs to be set by senior leadership.
But on the other end, only the people in the field, who are near to the market and to the suppliers on a daily basis, can really capture the new tech trends as they emerge, and help turn them into opportunities for the company. So, everybody has to be involved in the innovation process. It’s very important that everyone in the company feels entitled to innovate. Everyone needs to be enabled to share their knowledge, expertise, and passion, to help bring emerging trends, practices, and technology into the company.
Internal innovation is related to employee engagement, which of course is crucial to the future of work and corporate success. When individuals can develop their own projects and feel autonomous – rather than working on the orders of somebody else, following strict procedures – they are motivated to succeed. It’s so satisfying and empowering to develop your own project and have a direct impact on the organisation.