It is no surprise that intrapreneurship programmes are increasingly used by firms to deal with an ever more rapidly changing business environment. They are structured processes that guide employees in developing innovative solutions. Successful ones can help to continuously renew and empower the firm.
Yet, starting an intrapreneurship programme is not just plug and play. It needs a careful architecture right from the beginning to seize its full potential. Here are three things that our research and practical experience has taught us:
- Get clear on the programme’s role for employee development
Before designing an intrapreneurship programme, a key question needs to be answered: How much importance do you assign to the fact that your programme is a great employee empowerment instrument? The answer will largely determine how to incentivise employees, how to allocate resources, how to structurally embed the programme within the firm.
An easily overlooked but powerful benefit can be the empowerment of employees.
While many firms run intrapreneurship programmes solely to develop innovation outputs, an easily overlooked but powerful benefit can be the empowerment of employees, which here refers to their learning of entrepreneurial tools, skills, and mindset through the programme. By working on their own projects, employees learn through action – learning-by-doing. Further, working in oftentimes cross-departmental intrapreneurship teams and dealing with a new variety of stakeholders extends their network within the firm and beyond dramatically – an important additional empowerment aspect.
Determining the relative importance of employee empowerment will thus have large implications for the overall design. And in any case, the expectations for the programme should be clearly communicated to all relevant stakeholders. Additionally, attaching importance to employee enablement also means evaluating the programme differently.
- Set up the right measures to prevent failure
Depending on the goals that you set for the programme, a second key question is how you want to measure the success of an intrapreneurship programme. Even if you aim for innovation output that is close to your company core and thus rather incremental, resulting business models will rarely be profitable whilst part of the programme. Mostly, the programme’s active involvement ends way before any financial return on investment is achieved. That’s a fact your organisation needs to be aware of right from the start, and that needs to be taken into consideration when setting up your measures.
So, the question is how to measure success?
The most important thing to understand is that there are no inherently right measures. Make sure that the measures you apply always help you to operationalise corporate strategy. Regarding innovation output, there are some best practice measures which can be considered. However, take into account that appropriate measures also depend on the stage of your project funnel:
- First, programme success can be measured by the number of qualified idea applications you receive. Is your programme well-received? Is your communication effective? Do you reach all the units you want to reach?
- Second, measure the number of projects that reach certain stage gates. Most innovation endeavours fail because they can’t validate hypothesized customer needs. What’s the ratio of the projects that advance to the next stage to those which don’t?
- Third, how many projects do you either hand over to internal units or spin out?
To measure employee empowerment, best practice also relies on project maturity. Early in the process, a best practice is to assess changes in the participants’ entrepreneurial alertness, their willingness and ability to learn, their overall customer orientation or their self-efficacy regarding the application of entrepreneurship tools. Later in the process, when more commitment and personal resources from employees are required, you want to assess how the programme affects their entrepreneurial effort or the degree to which they can handle uncertainty.
- Involve business units early to secure follow-up financing
While intrapreneurship programmes need independence to prosper, an early involvement of business units is paramount for its success. Here is why:
As projects mature to a phase characterised by prototyping and preparing market entry, more resources are needed. These needs may exceed the regular programme budget for the individual projects. Further, even if your projects have the potential to eventually spin-out as new companies, during that prototyping or MVP-phase, they are typically still too immature to be attractive for (corporate) venture funds.
While business units may be interested in investing in high-potential innovation output, the unpredictability of innovation success may collide with their budgeting cycles.
To address this issue, it is recommended to involve business units as early as possible. Involve them when intrapreneurship teams validate their problems. Keep them in the loop to avoid the “not invented here syndrome” and potential internal cannibalism. It may also help to get units on board with a smaller initial budget to understand whether there is true interest. While doing all that, map out what it means if projects become successful and what is needed resource-wise to push them over the hump.
Christian Stumpf is the co-founder and a programme manager for the TenneT PowerLab Intrapreneurship Programme. He was previously the engagement lead for DB Intrapreneurs, the Intrapreneurship Programme of Deutsche Bahn, the head of marketing for A+ Composites GmbH, a start-up developing continuous fibre reinforced plastics, and has a background in entrepreneurship science.
Christoph Seckler is an assistant professor of entrepreneurial strategy at ESCP Business School (Berlin campus). He is a member of the Jean-Baptiste Say Institute and Academic Director of the U-SCHOOL. In his research, he is interested in understanding the dynamics of entrepreneurial ecosystems, and learning from failure. Before joining academia, he worked for several years for an international professional service firm in Hamburg and New
Peter Borchers is an affiliate professor for entrepreneurial leadership and strategy at ESCP Business School (Paris campus). He is a member of the Jean-Baptiste Say Institute and Academic Director of the U-SCHOOL. He is a successful angel investor, keynote speaker, author, advises global enterprises and hidden champions on digital issues and has supported numerous companies in bringing successful startup programmes to market. Peter also served on the Digital Advisory Board of the German Federal Government.