Lessons From The Corporate Entrepreneurship (Intrapreneurship) Trenches

In my experience with corporate entrepreneurship and after following several examples of successful intrapreneurial companies, it is clear that companies which consistently achieve profitable growth and develop a sustainable intrapreneurial culture are the ones that have understood these three rules:

1. You can’t cut your way to growth

2. It takes time to grow

3. You can’t buy your way out of a financial growth stagnation and not pay the price

First, successful corporations understand that while continuous improvement is a philosophy that must permeate the whole company, ultimately, growth can only come from the proper combination of investments in innovation and intrapreneurship. Waves of cost cutting efforts will gain the company temporary improvements on the bottom line and incremental gains on EPS, but it cannot provide sustainable bottom line growth. Sustainable growth comes from funding innovation and launching intrapreneurial initiatives to bring those innovations to market.

Second, they understand that it takes time to grow a sound and sustainable business. Getting the business model right, pivoting the plan as required, and establishing an effective infrastructure takes time. Larger companies understand how to leverage task teams to solve major challenges in a timely manner. Unfortunately, this approach does not work for launching and growing a new business or corporate startup. In other words, successful intrapreneurship is not a simple matter of creating a task team, throwing a bunch of people at it, and having results implemented within six to twelve months. Intrapreneurship requires innovation, and both are not short-term plays.

Third, you can’t buy your way out of a financial mess without paying a price. Any attractive acquisition target that can provide immediate and accretive contributions to a company’s bottom line will cost the buyer dearly. Growth by acquisitions will generally cost companies a lot more and have higher failure rates than organic growth by intrapreneurship, but can provide more immediate and material contributions. On the other hand, growth via intrapreneurship will take longer but will generally result in more sustainable and less risky long-term success and have less of a negative impact on the balance sheet.

Successful intrapreneurship is a long-term commitment that requires leadership, courage, and a cultural shift that business executives must understand and be willing to embrace prior to adopting an organic growth strategy. While most business leaders will be predisposed to focus their energy on the external market and business case, the reality is that the main challenges to be faced by the corporate startup and its intrapreneur will come from within the very corporation that is looking for its intrapreneurship drive to succeed. This is the focus of my book, The Twelve Labours of the

Intrapreneur: Overcoming the Obstacles Within, which I will be publishing by the end of the year.