What is the difference between Intrapreneuring and Corporate Entrepreneuring?

Intrapreneuring and Corporate Entrepreneurship are very different and directly affect business outcomes.  Read about both approaches, their distinct opportunities, and challenges.

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For many years I have worked as an Intrapreneur. I advised startups, built intrapreneurial eco-systems across global organizations, and mentored corporate teams applying Lean Startup and other entrepreneurial methodologies in Corporate Entrepreneurship programs.

The question that came up frequently was about the difference between intrapreneuring and corporate entrepreneuring: Are they the same?

The quick answer is ‘No’ as there are significant differences on many levels that directly affect the business outcomes.  Both approaches come with distinct opportunities and challenges (see also the comparison table below):

Idea Origin

  • The Intrapreneur finds a bold idea that can have the potential to transform or even save the business but may not align with the business plans and priorities of the company – more likely, the idea is not anywhere on the management’s radar.
  • The Corporate Entrepreneur receives the objective together with a project handed down by management. The idea (project scope) is a business goal of sorts that the Corporate Entrepreneur should address.

Ownership

In a large company, jobs are small. The increasing complexity and high specialization of work in a large organization narrow the responsibility and job descriptions for the individual employee. In a small company, in contrast, jobs are big since there are only a few people who need to step up and cover all aspects of the business – the individuals ‘own’ and contribute to the success of the business directly and to large degrees.

  • In this context, Intrapreneurs make an idea their own which determines the mission and scope of the intrapreneurial quest, the ‘intraprise’. The Intrapreneur assumes ownership and full responsibility for the idea and brings it to life – even against the resistance of the organization. Thus, the Intrapreneur runs his or her own, small ‘intraprise’ with full responsibility, freedom to operate and navigate in any way and direction imaginable, and -therefore- has a big job (just like an entrepreneur).
  • The Corporate Entrepreneur receives the project objectives handed down by management and is held responsible for delivering on project results as scoped. The idea directly translates down from a business goal of sorts. The Corporate Entrepreneur usually runs or contributes to a ‘small job’ project that is temporary. This project scope and small job perspective together with the time limit can also affect process and outcomes as it can easily narrow the solution space, or adjusting and ‘pivoting’ by re-aiming, for example, at opportunities beyond the original or change the scope of the idea altogether.

Passion

The Idea Origin and Ownership are key to the single most important driving force for an Intrapreneur: Passion.
The importance of being passionate about the idea is essential because passion is needed to persist and to bring about change against the resistance many obstacles an Intrapreneur runs into. The resistance of the organization is a sign of meaningful change entailing the intrapreneurial idea; therefore, facing resistance can be a positive sign.

  • An Intrapreneur committed and passionate about the idea will try everything and get very creative in bringing the idea to life.
  • The Corporate Entrepreneur usually is not truly passionate about a project handed down by management and being held responsible for delivering on the project as scoped.

Mandate

‘Intrapreneur’ is a self-assumed role in the organization and, therefore, operates without a formal mandate, organizational support or assigned resources. On the upside, the Intrapreneur does not have an answer to a superior. The challenge is, however, to get creative to find allies and resources in an organization unprepared to formally support the Intrapreneur. This lack of formal authority and institutional support by management also comes with considerable risk for the Intrapreneur and the idea.

The Corporate Entrepreneur has a clear mandate and already receives support from management usually within the given operational framework of the approved project. The project scope is narrow which translates into limited resources and restricted freedom to navigate. Furthermore, the project comes with timelines and expectations by sponsors whose patience can run out fast when the team misses milestones or falls short on expectations. Thus, Corporate Entrepreneuring, more often than not, is a glorified term for ‑usually‑ quite ordinary projects of incremental nature along established processes.

Mindset and Results

The limited scope, resources, and overall operational framework define a ‘box’ for the Corporate Entrepreneurs to operate in within the larger organization and the path on how to get there. Often enough these limits extend also into the mindset and open-mindedness of the team and their approaches. Real or perceived restrictions can originate from various factors present in the established organization such as formal process and procedures, authority and hierarchy, values and norms, group-think and taboos, etc.

Corporate Entrepreneurs operate openly and under the constant scrutiny of the larger organization. The latter can take uninvited influence on the project scope, progress, process, resources, results, and success as well as on the project team itself. Being able to leverage the resources of the larger organization can be very helpful when it comes to implementation and scaling (if it ever comes to his point) but operating in the limelight is not always helpful and may easily lead to compromises, trade-offs, and scope-creep induced by powerful stakeholder.

The Intrapreneur is not as limited by the formal boundaries, practices, and culture of the organization. Being able to operate outside the box lends itself to pursuing a bold and disruptive idea, taking unconventional and stealthy approaches and pathways that help to move the idea forward ‑ the sky is the limit. Operating in the shadows initially avoids drawing broader attention to the idea. Preventing premature exposure to the ‘organizational immune-system.’ Once triggered, it tends to quickly put an end to the unconventional idea and their champion. A stealthy Intrapreneur can more cautiously test the waters, find experts and executive supporters also outside the own business unit, and allow the idea to take shape, evolve, and mature before taking the risk of exposure.

Exposure comes with a range of possible outcomes where the idea can then can slip beyond the control of the Intrapreneur including:

  • Shutting down the idea and implementation altogether or watering it down by absorbing it into the regular structures and processes of the organization
  • Bringing the idea to life by creating a new company structure and business altogether
  • The Intrapreneur leaving the organization to pursue the idea elsewhere

I have seen all of these outcomes many times throughout my career as an Intrapreneur and executive consultant.

Reward

What are rewards can look very different for Intrapreneurs and Corporate Entrepreneurs. The latter delivers a project and may get recognition for it, a bonus or promotion even, before moving on to the next assignment.

The Intrapreneur, however, has a much greater sense of accomplishment and fulfillment for the passionate Intrapreneur having brought a great idea to life against all obstacles and resistance of the organization.

Comparison in Summary

From my perspective, the main difference is that an intrapreneur has a calling, a vision, that he or she wants to bring to life for the better of the organization even against the resistance of an organization. Intrapreneuring is an active expression of organizational citizenship behaviors (OCB), i.e. ‘helping behaviors’, with going beyond the call of an employee’s duty. It requires intrapreneurial spirit with passion and guts to pursue challenges and to overcome obstacles day after day which includes taking risks including to stand all alone against the organization at times. This can make some Intrapreneurs even leave their organization to make their dream come true elsewhere or on their own.

While Corporate Entrepreneuring propagates introducing entrepreneurial methods within an established organization, if you look beyond its fancy label and a vendor’s prospectus, the approach ‑most often in my experience‑ remains shackled by numerous institutional constraints. Therefore, these program falls short to deliver the true potential of entrepreneurship or intrapreneurship. Instead, the solutions tend to remain in the more predictable space of incremental improvement that large organizations are more accustomed to and feel comfortable to operate in.

Thus, the average Corporate Entrepreneur is not an Intrapreneur by any means and not an entrepreneur either.  Corporate Entrepreneurship then resembles a non-controversial, risk-free, and feel-good version of the intrapreneurial experience out of the safe position as an appointed corporate cogwheel in a glorified project with a marketing blast and a defined career path waiting at the end of the project.

The Golden Opportunity

Now having said all this, there is no reason why true Intrapreneurs and Corporate Entrepreneurship programs should not be compatible in ways where they can benefit from each other mutually.

A savvy Intrapreneur could use company’s Corporate Entrepreneurship program as a vehicle to forward the Intrapreneur’s agenda somewhat in alignment with company goals and avoiding a frontal collision with the organizational immune system. In return, the company benefits from a driven Intrapreneur in the driver seat who can bring intrapreneurial passion to the project – with a lot of ‘If’:

  • If they are willing to embrace the disruptive challenge of bringing about meaningful change,
  • If they are able to identify true Intrapreneurs in their organization and
  • If they are bold enough to take a chance on Intrapreneurs by allowing them into the program in the first place. Remember, Intrapreneurs tend to be disagreeable among other ‘features’ that, often enough, not win them an invitation by management to join their fancy Corporate Entrepreneurship program.

All these ‘If’ remain the biggest obstacles across corporations to embrace Intrapreneurs. More recently, the phrase “culture fit” tends to disqualify Intrapreneurs and their passion ‑or‑ as the Contently founder Shane Snow puts it: “When an organization has an ethos rooted in ‘culture fit,’ a nasty hidden habit develops. Whenever someone has an idea that doesn’t ‘fit’ the established way of thinking or of doing things, they’ll either shut up or they’ll get shut down.”

There is something about the passionate individual and somewhat renegade employee with a vision and a transformative idea that challenges the status quo, group-think, or widely accepted goals in

an organization who may just need that disruptive or transformational idea to grow, outrun their competition, or even survive while rejecting the change initially. In the end, it comes down to the power of one individual that envisions greatness and brings it to life against all obstacles.

Table Intra vs Corp Entre v2

Intrapreneurship: Designing sustainable innovation ecosystems! – Executive Webinars in Oct/Nov 2017

Intrapreneurship: Designing sustainable innovation ecosystems! – New Executive Webinar Series in Oct/Nov 2017

Register now for my new Intrapreneurship series of Executive Webinars starting in October 2017 and powered by Ijona Skills:

  1. The Power of Intrapreneurship – an Introduction
    Online only October 18, 2017 – recording available
  2. “Where to start?” – Designing a sustainable innovation ecosystem in a large company for exponential returns
    Online only – October 31, 2017 – coming up
  3. “Against all Odds” – Implementing a sustainable innovation ecosystem in a large company
    Online only – November 15, 2017

The three webinars build upon each other and provided maximum value when attended in this sequence (they are being recorded, so no you can catch up if you missed one)

Event: Global Growth – Next Practice Strategies In Customer Experience, Talent & Transformation, Apr.6, NYC

Global CEOs, Top HR and Key Influencers share strategies

Global Growth – Next Practice Strategies In Customer Experience, Talent & Transformation (Event)

Register (at the bottom of the webpage) to join Global CEOs, Top HR and Key Influencers share strategies at the
Cheung Kong Graduate School of Business 601 Lexington Ave. 26th Fl. New York, NY 10022

‘Leading in an Ambiguous World’

How to stay ahead and aligned in today’s fast changing markets, talent compression, regulatory shifts and technology disruptions. A fast paced, highly interactive collaboration among global leaders on emerging trends.

Featured presentations:

  • How to build a Global Customer & Client Centric Organization- the 8 key behavioral and operational dimensions
  • How to create a Culture that supports Innovation and Intrapreneurship
  • 2020 – The Next Practices in Global Talent Development and Mobility
  • Staying ahead of Regulatory Shifts and leveraging Technology for Operational and Market Advantage

 

Meet me at 2017 ISPIM Innovation Forum XXVII- Fostering Innovation Ecosystems

Join my session on “Building a Sustainable Innovation Ecosystem in a Global Corporation” in the Innovation Culture & Ecosystems track on March 21.

Meet me at the International Society for Professional Innovation Management (ISPIM) Conference 2017 ISPIM Innovation Forum XXVII- Fostering Innovation Ecosystems in Toronto, Canada on March 19-22, 2017!

Join my session on “Building a Sustainable Innovation Ecosystem in a Global Corporation” in the Innovation Culture & Ecosystems track on March 21.

Blog ISPIM Toronto event picture

 

What my session is about?

Large pharmaceutical (and other) organizations struggle with the tectonic shifts and fundamental changes across the landscapes worldwide. The traditional mindset and business models are failing. A rejuvenating and holistic transformation effort is needed to get nimble again and adapt to the new reality.
How do you change a stagnant innovation culture and create a sustainable ecosystem within a global organization that stands the challenges of real life?
As an example, this case study discusses the comprehensive yet practical approach that mobilized hidden talent and resources transforming Boehringer Ingelheim, a Global FORTUNE 500 pharmaceutical company, from within on a global scale. It generated exponential returns and fundamentally changed the culture of the organization from leadership training and managerial decision-making down to bringing grass-root ideas to a break-through and new career paths for employees.

What is the Problem?

The issue is universal and not limited to a pharmaceutical or healthcare company: There is no lack of great ideas aiming beyond incremental improvement at the grassroots of large organizations. There is also no lack of funds or support for break-through ideas on the top of the hierarchy; in fact, leadership is constantly seeking for good ideas. However, there are many obstacles bringing them together.
One problem is how to connect the people with great, disruptive ideas with the ones that have the authority and resources to making them happen in the organization?
A second problem is how to find and vet the ideas that have a game-changing potential and develop them with limited risk?
The third problem is that even with executive support it can be hard to implement a new idea against the resistance of the organization, which rejects them as disrupting the equilibrium of the status quo.
The proposed session illustrates and discusses the real-life experiences of building and operating a holistic and sustainable framework that successfully addressed the issue, overcame resistance on many levels, and yielded an exponential return-of-investment. It resulted in a visible and measurable way changed innovation mindset and changed behaviors throughout the organization to bring disruptive ideas and projects to life.

Where do I find more Information on the Topic?

Visit my blog OrgChanger.com to read more about intrapreneuring with case studies and real-life success stories!

German Innovation Insider: Holding the Brakes on Digital Innovation

German innovation gets trapped in the very mentality focusing on building quality products ‘Made in Germany’ that the country got well known for. Holding on to vertical product improvement, however, obstructs crossing industry barriers, convergence, developing game-changing business models, and coming up with breakthrough innovations with potential for exponential growth and returns.

Germany – Land of the ‘Hidden Champions’

A recent research study of the Centre for European Economic Research confirmed Germany leading by far with 1,550 hidden champions.  Companies are commonly considered a hidden champion if they are no. 1 or 2 on the world market, make less than EUR 1.5b revenue and their name is not overly well unknown to the general public.

Note that mid-size companies comprise 80%(!) of German industry and resemble the backbone of the German economy altogether. According to the Berlin School of Economics and Law, 90% are focused on B2B.

germany-celebrates_(latintimes.com)
Champions not only in world football (image: latintimes.com)

See if you recognize a few examples of hidden champions that are leading global players:

  • Dixi / ToiToi (portable toilets)
  • Sennheiser (headphones)
  • EBM-Papst (motor and fan manufacturer)
  • Enercon (wind energy)
  • Krones (bottling machines)
  • Recaro (car and airplane seats)
  • Trumpf (laser cutters)

Inside the Vertical Tunnel View

Among the 1.500+ market leaders, only two German companies are leading software companies (Software AG and SAP).  The vast majority focuses on more tangible product innovation leaving this digital industry somewhat isolated, underdeveloped and vulnerable like an economy’s Achilles’ Heel.

You get a good sense of a vertical bias in product innovation, when you read German open job postings for innovation lead position of sorts:  As an innovator in an automotive company, you require a solid background in engine engineering, for example, or as an innovation leader in a chemical consumer goods company, you will not be hired without in-depth knowledge of adhesives, for example.  It becomes painfully obvious how the vertical product innovation fosters a mindset of inbred solutions and can miss out on transformative opportunities beyond the own domain, bridging and converging industries.

3D-printed-German-car(partsolutions.com)
3D-printed car (image: carpartsolutions.com)

Point being: Innovators are usually hired from within a vertical industry. This leaves little room for a creative influx from the outside.  Since meaningful innovation ‘happens’ at the crossroads of disciplines in a horizontal cross-pollination of different industries and domains. This inflexible German practice lends itself to incremental improvement of products rather than disruptive transformation of businesses, entire industries or even across industry arenas.  Within a vertical mindset, ecosystem cross-pollination withers and innovators are less suited, prepared, capable, or enabled to disrupt.

Digital Transformation “Made in Silicon Valley”

When it comes to digital transformation, German companies got disrupted and steamrolled mostly by large-scale digital disruptors coming out of the United States from either California or the East coast technology ecosystems with huge global impact and a different approach:

  • The world’s largest taxi service owns no taxis (Uber)
  • The most popular media owner creates no content (Facebook)
  • The largest movie house owns no cinemas (Netflix)
  • The largest accommodation provider owns no real-estate (Airbnb)
  • The largest software vendors don’t write apps (Apple, Google) and so on.

The above examples differ from traditional products not only by bold out-of-the-box thinking but also by paying close attention to the customer.  Their business models rest firmly in the digital world with a software business and an internet backbone.

Uber and Airbnb offer digital platforms – that’s it, no tangible goods.  Nonetheless, they shake up the established industries of transportation and hospitality in ways unheard of.  They also reap exponential returns by creating new digital arenas that generate highest recurring revenue in the digital space.

Digital Industry (telecitygroup.com)
Digital business has arrived (image: telecitygroup.com)

Missing the Digital Train?

Back in Germany, its 1,500+ hidden champions flourish in a robust economy, so Germany must be doing something right overall with a vertical focus set on tangible quality products within industries.  Good money is still made in Germany by holding a steady course of vertical product improvement.

This practice also goes hand-in-hand in hand with protecting and not challenging enough the traditional sales-driven business models to avoid cannibalizing the status quo for next-generation innovations.  It reminds of the Kodak-Eastman story having invented the first digital camera but rejecting the technology in order to protect the business around the existing analog film products – and we all know what happened to Kodak.

A Digital Transformation Divide

Truly putting the customer in the center and embracing digital business requires a radical transformation of the existing business and its operations.  The critical interface between IT and Marketing, for example, often is not well developed in Germany, where traditional companies lack understanding of the digital potential and struggle with developing new, digital business models in time.

It is not a question but painfully obvious that -with the current mindset and strategy- Germany misses the train on digital transformation.  While the world moves online, many companies in Germany failed or simply ignored the emerging technological opportunities to develop digital business models consequently, in a structured fashion and timely.

Failure_to_Innovate(bobmaconbusiness_com)
Germany is missing the digital innovation train. (image: bobmaconbusiness.com)

In fact, German companies practically ‘gave up’ across entire industries including media, travel, and retail.  In a recent wake-up call, the German government asked companies and industries to focus on digital transformation in a widely proclaimed initiative called “Industrie 4.0” ‑ a race to catch up internationally.  And catching up is much needed: the narrow German ‘inside focus’ presents a vulnerability to be exploited by foreign disruptive players.  The gap widens steadily as the competitors advance fast, build up huge resources and become increasingly experienced to develop and apply digital transformation with new business models.

pessimism_quote(notable-quotes.com)
(image: notable-quotes.com)

Pessimism with an Insurance Mindset

The high level of disruption and uncertainty does not come easily to a less flexible German mindset:  Having experienced hardship many times during the not-all-that-distant history, Germans tend to seek and value predictability and safety.  Anxiety and fear of the unknown forms an undercurrent in the mindset of German society, which is expressed by seeking refuge in insurance policies to prepare for unknown future events.

As an example, not only do Germans over-insure their daily lives with a myriad of insurances, Germany also holds on to one of the largest amounts of hospital beds and bunkers per capita. You find more hospital capacity in the Berlin-area alone than in all of their neighboring country, The Netherlands!

In general, start-up funding is not as easy to come by as in the U.S., for example, where venture funding is a more common practice.  When I arrived in Germany a year ago, I came across a serious government program that ‘supported’ a new start-up or entrepreneurs with grants tied to a projected positive return-on-investment (ROI) within the first year.  Now, building a profitable business from scratch within in year is an unrealistic goal.  Consequently, the desperate entrepreneur in need of funding would have to submit a bogus business plan right off the bat, which is a set-up for disappointment down the road.  So, either the government program is not meant serious (unlikely) or is designed by people not knowing the first thing about starting a business (likely).

senior-woman-confused-by-tablet-computer(sheknows.com)
Reluctance to embrace technology? (image: sheknows.com)

Techno-Fear and Over-regulation

Overall, the German mindset tends to be more critical regarding new and unfamiliar technology.  Seeking to avoid risk comes with a tendency to ‘over-regulate’ in the sense of applying regulations just because it is possible to regulate rather than because it is necessary to come up with regulation.

Since a long time, Germany has the strictest data privacy laws (that recently translated into GDPR, Europe’s new General Data Protection Regulation).  The domestic law protects the individual by granting them the right to control their personal data online and offline.  These regulations are rooted in the country’s dark experiences during its Nazi-past but are also is a reflection of the outspoken suspicion among the broader population towards digital data technologies and their application.  Thus, Germans tend to be more reluctant to share personal data on social media out of fear of exposure and losing control.

The protective (domestic) legislation means well but can only be effective in a closed system, which the (global) internet is not.  In a digital world, international boundaries are artificial.  Given the nature and proliferation of digital technology and interconnectivity of people around the globe, keeping up the aspired high standards proves increasingly cumbersome if not impossible.

The German island can hardly be defended effectively over time.  It may protect the citizens from some harm locally but in return also isolates them and denies them access to the benefits of a technology that ever progresses globally.

Losing the Entrepreneurial Spirit

Given a rather pessimistic Germany mindset that is reluctant to fully immerse in the digital world, digital-resistant citizens appear poorly prepared for ‘moonshot’ visions, embracing the opportunities of Big Data Analytics or the vast potential of the Internet-of-Things (IoT).

German innovation death(deskmag_com)
Reluctant to start up a business (image: deskmag.com)

The present German ‘generation of heirs’ inherits the wealth created by their parents’ generation during the famous post-WWII decades known as the economic “Wirtschaftswunder” boom.  Very much in contrast to the U.S. or Asia, many Germans do not share the venturing spirit anymore.  They show reluctance to trying out something new such as building a business as an entrepreneur for several reasons:

  • Firstly, Germans tend to prefer a detailed plan before actively exploring an opportunity and strictly sticking to the plan during implementation. Besides the favorable element of thorough planning, this approach also reflects a deeper fear of failure and seeking a sense of security and predictability.  Deviating from the plan is often interpreted as a failure.
    But then, which plan ever is perfect and stands the test of a dynamic reality? Sadly, the debate then quickly tends to turn to finding a culprit when things go sour rather than making adjustments to keep moving on.
  • Secondly, German hesitation and even a good amount of pessimism roots in the stigma of a business failure, which seems to stick more in German society than in the United States. More than 9 out of 10 start-ups fail, but when a startup fails in the U.S this does not automatically translate into a personal failure of the leader.  It is much more seen as a learning experience, while a German CEO gets easily branded a loser.
    Surrounded by the ‘insurance thinking’ mentioned earlier it will be hard for the former CEO finding support for a future business or even employment in Germany after a venture failed. In consequence, the German CEO is more motivated to beat a dead horse rather than cutting the losses and move on.

Summary – Brakes on Digital Innovation in Germany

For all these reasons, visions tend to be smaller in Germany.  They are more designed to control risk than seizing exponential business opportunities.  Thinking too small, not disruptive enough and too focused within an industry prohibits to compete with the digital global players that emerged with exponential business models, such as the Googles, Apples, Amazons, Airbnbs, Ubers, and so on out there.

Brake-damage(dba.com.au)
Brake damage ahead! (image: dba.com.au)

What keeps the brakes on the German innovation machine is the inbred mindset and vertical tunnel vision with a focus more on products instead of customers, and the risk-avoidance and fear of applying digital technology to its full potential.  It traps many German companies in a self-limiting disadvantage compared to American or Asian competitors, which prove more venturous, flexible and generally optimistic.

The U.S., in particular, entrepreneurs come not only with a more flexible and optimistic mindset but can also tap into unique startup eco-systems in place (Silicon Valley, Boston, and NYC areas primarily) with easy access to bright minds, cross-pollination and venture capital.

Outlook

There remains a demand for physical, quality products in the future, such as the machinery, tools or cars we value today as Made in Germany, so the 1,500+ hidden champions look into a bright future.  Their reluctance to embrace the digital age, however, and transform to embrace new digital business models, however, may steadily push them to the sidelines as industries and arenas change beyond their input or control.

Driving Innovation in Healthcare: New Executive Intrapreneuring Workshop

Experience the new two-day intrapreneurial journey to transform you organization with exponential results!

Don’t miss EBCG’s intense and hands-on Intrapreneuring Workshop “Building an innovation framework to design, launch and execute business projects” in the Driving Innovation in Healthcare series in the “Golden City” of Prague, Czech Republic, on April 6-7, 2016.

Sign up before December 23, 2015, to save during the special promotion period.


 

 

Save 50% at the 6th Intrapreneurship Conference in NYC, Oct. 21-23, 2015!

Contact me for a 50%-off discount code for the 1-day Wednesday program (Oct. 21) at the upcoming Intrapreneurship Conference in New York City, Oct. 21-23, 2015!

Join me for my workshop on How to build a strong foundation for a sustainable Intrapreneuring program at 1:35pm to 3:30pm on Thursday, October 22, 2015:

  • As an intrapreneur you struggle with many visible and hidden innovation barriers in a large organization.
  • How do you get started to change the organization bottom up?
    What does a sustainable innovation ecosystem look like and how can you set one up?
  • This workshop helps you to identify and overcome obstacles, to find allies and sponsors, and to measure and communicate success to upper management convincingly.
  • Learn from real-world case studies, practical hands-on experience and apply powerful tools!