Entrepreneur- we’ve all heard this term before. The Oxford dictionary defines it as “A person who sets up a business or businesses, taking on financial risks in the hope of profit”. Now what about the term Intrapreneur? A term not as widely used as entrepreneur, Oxford describes it as “A manager within a company who promotes innovative product development and marketing”. What these brief definitions fail to cover is the breadth of it; the essence of entrepreneurship versus intrapreneurship. Entrepreneurs essentially uncover a gap in society; showcasing a primordial urge to satisfy existing needs. Intrapreneurs on the other hand, are commonly recognized as an entrepreneur within an established organization. As similar as these two terms may seem to appear, they are quite distinct categories. In an article published by Forbes, Larry Myler identified four differentiating key factors, that if not addressed appropriately, can encumber the growth and innovation of an organization.
1.) Venturous- Entrepreneurs willingly sign themselves up for an endless range of possibilities, ranging from massive gains to substantial losses. Conversely, intrapreneurs tend to avoid risk by choosing to receive a steady pay cheque month after month from their corporation. As entrepreneurs are driven by huge rewards, they are more inclined to take daring risks. Whereas intrapreneurs are less risk-oriented, hence they do not anticipate huge financial gains. The ‘reward versus risk’ mentality is a major psychological difference between entrepreneurs and intrapreneurs, and the number one differentiating factor.
2.) Culture- One of the biggest perks of being an entrepreneur is the luxury of building a company’s culture, vision, and mission according to what they prefer and see best fit. On the contrary, intrapreneurs often find themselves fighting a never-ending battle against a deep rooted history of commonly held practices, beliefs, and assumptions- most of which may counter to advancing the innovative capacity of the corporation. Due to the numerous years behind the existence of a well-established corporation, an outdated culture may already be set in place; requiring a long period of time to change before any cultural fruition can be observed.
3.) Autonomy- Intrapreneurs in comparison to entrepreneurs are not as independent as they are often perceived to be. They are often restricted by top level management from executing a particular motion when challenges arise; giving rise to disappointment. As intrapreneurs exist in massive organizations with predetermined rules and regulations, obstacles mainly occur when independent decisions and actions are made. As one small move can potentially affect the performance of the entire company as a whole, independent decisions are much harder to take as an intrapreneur.
4.) Access to Resources- Entrepreneurs use their own means to secure resources to support their innovations. Through the means of networking, they establish working relationships that add value to their business. For instance, the attainment of funding is secured through building networks with investors. Nonetheless, no matter how competent intrapreneurs can be in securing the same resources, they are still perceived to be employees that belong to a company. Therefore, similar to any other employee, intrapreneurs must negotiate and rebuttal with senior management to secure scarce resources like talent and funding (which are often subject to internal availability and competing projects within the corporation).
By understanding the needs and motives distinctive to an intrapreneur, corporations can substantially increase the production of innovation within a traditionally perceived conventional environment. For example, financial rewards are deemed important in motivating employees. Intrapreneurs on the other hand, require a more powerful method of motivation known as recognition. Mentions in public announcements, newsletters, and awards for their achievements, has proven to be a far more influential strategy in inspiring intrapreneurs.
Additionally, as intrapreneurs are known to have little power when challenging the norms of a corporation’s culture, this prolonged process of transformational change will require a greater understanding from top management. The leaders of the corporation must be willing to sacrifice short-term gains and forfeit outdated notions in order to reach a mutual agreement. Successful leaders will accept risks to increase innovation and intrapreneurial behaviour as a form of respect for their intrapreneurs; thus enhancing a corporation’s culture through the transformational process they seek to improve.
Oftentimes, what seems to be realistic expectations in the eyes of the corporation may appear to be unrealistic restrictions to a rising intrapreneur. Hence, it is extremely important to provide intrapreneurs with as much freedom as possible without completely surrendering reasonable expectations and authority revolved around the span of control. As innovating within a massive organization presents many limitations by itself, easing up on added restrictions governed by top management will present the intrapreneur with a sense of independence and belief from the management side in their decision-making skills. This demonstrated support will cause the intrapreneur to calculate decisions in such ways that prove to be beneficial towards to company.
Furthermore, if new products, services, or processes initiated by an intrapreneur is proven to be worth the risk, corporations should refrain from limiting access to valuable resources. The biggest competitive advantage an established company has over start-ups is its pool of resources which is required to launch any innovation. This holds to be true especially when funding is required, as it is the most challenging resource for entrepreneurs to secure. By providing sufficient resources an intrapreneur needs, this will give the corporation a higher chance of outperforming its competitors with new innovations and improved processes that cannot be competed against in the market.
All in all, many people believe both intrapreneurs and entrepreneurs can be expected to behave in similar ways, be motivated by the same influences, and react similarly in various situations. But by conducting a deeper analysis below the surface level of what seems to be true, the findings reveal these are nothing more than common generalizations that can potentially hinder the growth of intrapreneurship. With a better understanding of how intrapreneurs and entrepreneurs compare and contrast to one another, what type of innovating style do you prefer? Comment down below!
