Entrepreneurs have fascinated the American public for decades. Ford, John Deere, and many others not only have left their name sake on the companies that they started but also changed our nation. These early pioneers changed America and their names have become icons. The modern day “pioneer” we may never here the name of but we all can be affected to their contributions everyday. Many of the entrepreneurs are really intrapreneurs. They work for a company that is open to their input and suggestions.
What is an intrapreneur? Gifford Pinchot coined the phrase back in the 1980’s to explain current and past trends. He once stated “look back at any great business or invention at just about any big company and you can find that intrapreneurs created it.” (Takahashi 2001) An intrapreneur is someone at an existing company that has thee freedom to innovate and then push those ideas through the organization. They are given company resources to develop new ideas and concepts. Most companies do not practice intrapreneurship because it can be somewhat risky and not in line with existing management styles and expectations. But more and more companies are learning that this is a good way to do business and have taken advantage of the talent and ideas that are already in the company.
3M Intrapreneurship Bench Mark
3M was and still is one of these companies that are willing to take the risk of incorporating in house intrapreneurship. The founders of 3M hired others like themselves, innovators. They learned early to identify and utilize the talent that they have. An account of this from 1923 demonstrates this clearly.
Dick Drew identified a need in the auto industry for tape that would be used for painting two tone automobiles. He made an initial attempt to come up with a product on his own. It was too rigid to work properly and he knew it needed more work. (Fry 1987) When then CEO William McKnight caught wind of this he ordered Drew to stop. Dick Drew only followed those orders for one day and then began to work on that project again. Today we have masking tape and 3M has a policy that employees can use 15% their time in developing new ideas and products.
This early innovation and commitment to intrpreneurship is why I have made 3M to measure 3 other companies by in this paper. They have earned that distinction.
Through the programs that 3M has put into place they have had sustainable results. I will take the factors that made 3M successful and then compare and contrast them to the other companies.
Mr. Fry whose article that I’ve used as the basis for this paper is not only another employee at 3m but the innovator behind “post it notes”. He put the successful factors in his article and I will point out how these factors fit into helping him achieve post it notes through the stages of development.
Executive Champions. These are the upper managers who are not threatened by intrapreneurial activity but embrace it and encourage it through their support and seeing that those good ideas like post its get through.
Availability of resources. 3m has an 80/20 rule when it comes to resources for its developing intrapreneurial ventures. 80% of the materials used in these projects come from things already owned by the company and the other 20%come from outside sources. Fry called this scrounging and had to go out onto the shop floor to find some of the things that he needed to make this work.
Freedom to fail. During the process of developing an idea into a marketable product Fry was not discouraged or dissuaded from further pursuit of the idea. He was able to get some inside help and when the office staff of company executives fell in love with their new note pads eh began to get some help from upper management. I was impressed that when his project didn’t really look all that promising that he was allowed to continue. Management at 3M haws the foresight to look long term and knows that some ventures will be a success and some will fail.
Dual ladder policy: Just because you are a technical worker at 3M that doesn’t mean that pay and job titles have the expected ceiling like most other companies. At 3M you do not have to manage people to earn the highest rewards and job title associated with it.
Communications Network: they focus on exchanging ideas and helping each other on
key projects even in facilities that are around the world. (Fry 1987)
Intel Thinking Outside The Box
From the evidence in this article Intel does a good job encouraging employees to think outside the box and have the desire to want to let their ideas be known.
One example of Intel’s commitment to intrapreneurship is that of Paul Scagnetti. He came up with the idea of a hand held device that records and plans fitness and nutritional information. He acquired Intel’s financing and was given 15 employees to help launch his fitness planner.
Intel demonstrated that employees are given the resources and support to try new things and have the companies help and guidance. The executives championed new ideas, provided resources and made it acceptable to try and fail. (Takahashi 2000)
Microsoft’s game designer Seamus Blackley showed a true entrepreneurial trait when a major project he was working on failed in the marketplace. He failed, picked himself up, and tried again with a new idea. Blacklley thought that Microsoft should take the knowledge and experience in computers and use that to create a game player that could compete with Sony’s Playstation. (Takahashi 2000)
Through determination and despite some initial serious opposition he was able to get those important to the success of such a project behind it and was off and running.
In 2001 X-Box was released to enthusiastic gamers. I am sure that Blackley could not have envisioned the buzz that would accompany the release of the X-Box 360 in 2005.
Through this Microsoft demonstrated executive championing, access to resources, and a communication system that was key to the success of this project. (Takahashi 2000)
Has a different take on the intrapreneurial developments that other companies are using. To Alcoa, which is a specialty metal producer, processes are everything. If they can hone those processes and eliminate waste they have an advantage over their competition and earn more without increasing customer base. To achieve this we have a fairly formal way of getting together to discuss certain problems or challenges. These meetings are called Kaizens and involve employees at all levels. Problems are solved using a testing process and any conclusions that the group comes up with are monitored and changed as needed.
They may not be encouraging new businesses but they are empowering those who are closest to what is done on a daily basis to change how they do business. I believe that Alcoa definitely has executive champions for this new way of turning everyone into intellectual capital and that is throughout this organization of 120,000 employees. They provide a system for communication, resources and an environment for trial and failure.
Overcoming competitors’ ability to duplicate the advantages you have created through intrapreneurial efforts was spelled out in the article “Innovation Through Intrapreneurship” by the one who literally coined the phrase intrapreneur, Gifford Pinchot. The author felt that companies should hold back on placing all of your improvements or newly acquired know-how into the marketplace at once. He suggested that keeping some important aspects to be applied to later versions of an individual product. This brings to mind the computers that had clock speeds in them that were just turned up in later versions to create faster operation. (Pinchot 1987)
I have learned from personal experience that some companies and especially manufactures are quite all right with being second rate when it comes to product development. They let their competitors pay the heavy bill for research and development and cut the path into new territory or technology. They are always right behind them benefiting from their hard work.
The companies that I used as examples have each have a unique approach to intrapreneurship. One of the major similarities in each organization is the expressed desire for their employees to be involved in such activities and not be threatened by that. This is something not common among most companies that leave product development and new business ideas up to those in charge who I believe are sometimes too busy managing to have the same sort of fresh perspective that others in the companies may have. The key to the success of any intrpreneurial venture in a company is the environment where those ideas will be considered and expressing those ideas is a good thing to do.
Pinchot, Gifford. (1987) “Innovation Through Intrapreneuring.” Research Management. March-April 1987. vol.xxx. no.2
Takahashi, Dean. (2000) “Reinventing the Intrapreneur: Corporations Are Devising New Ways to Cultivate Entrepreneurial Efforts”. Retrieved from Ebsco Host July 2006.
Fry, Art. (1987) “The Post-It Note: An Intrapreneurial Success.” This article was adapted from a speech given by Mr. Fry at the 1987 SAM Conference in Lancaster, Pa, May 2, 1987.