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  • 09.07.10

Get “Startup Experience” in That Big Company

Are you an “intrapreneur” or an employee? Here are 13 ways to tell.

Cheetah on Elephant

Since joining IBM in 2004, I have had the good fortune of
helping IBM start up and develop a number of businesses. These experiences in
“intrapreneurship” have equipped me with exactly the kind of skills in
leadership, ‘do-whatever-takes’-ness, and creativity which are required in
“entrepreneurship.” The former is a startup mentality applied within large
organizations and corporations. The latter is a startup mentality applied to
one’s own personal business. Arguably, both entail the same calculated risk, careful
selection of partners, persuasion of skeptics, and requisite passion and
patience.

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Perhaps, as you also consider taking the plunge to be your
own boss, or if you were recently laid off, you should stop to recognize what
it is in your own resume and work experience that makes you intrapreneurial.
This exercise will give you the courage to just do it. Go for it. And stop
procrastinating. You are neither too old, too inexperienced, or too cloistered
to be an entrepreneur. You probably already have all that it takes to start up
a successful business.

So what is intrapreneurship? It is the pursuit of new market
opportunities by large organizations using entrepreneurial or startup
practices. While research and development (R&D) is more oriented towards
discovery, intrapreneurship is intent on addressing a real customer want or need
and, most importantly, profiting from it. Think about it. A small business
owner doesn’t start up a business to do research and development just for
kicks. He/she wants to make money. It’s the same with intrapreneurship. An intrapreneurial
team is a profit center. R&D is often regarded as a cost center.

In my mind, the most exemplary model of corporate
intrapreneurship began in Lockheed Martin’s Skunkworks. Perhaps that model has
since evolved at other companies into more formal programs such as IBM’s
Emerging Business Opportunity (EBO) in which I was a participant. From my
experience, I’ve learned that successful intrapreneurial startups have the
following characteristics:

1.
A healthy
dose of internal competition:
Different teams or “startups” compete for a
limited pool of resources within the corporation.

2.
Steering Committee:
Senior executives act as VC’s (venture capitalists) who assess the
opportunity and perform some degree of due diligence.

3.
Executive
commitment:
A senior executive sponsor invests people, money, and time to
start up and sustain the operation. Without a committed sponsor, the startup
becomes an orphan and the chances of failure increase.

4.
Founding
team:
The initiative begins with a small group of competent, passionate,
and results-driven “heavy hitters” with complementary skills. Team members
become “evangelists”, not just employees. No freeloaders or “empty suits” are
allowed into the team. The startup is allowed to source the best talent
internally or externally.

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5.
Market
need:
The team is driven by a desire to solve real world problems for
existing or new customers. Customer validation becomes an integral part of
product development, and the first few “flagship” customers are the hardest to
obtain, even for big name companies.

6.
Unconventional:
“Radical”, “leapfrogging”, “disruptive”, and “game-changing” are often words
associated with intrapreneurial startups. The team is freed from the
organization’s “normal” bureaucracy in order to develop processes, methods,
tools, and strategic internal and external partnerships which are, at minimum,
unconventional. At best, intrapreneurial startups fly in the face of the
company’s revered historical practices. The traditional rule book is thrown
out. Failure and making mistakes is an acceptable part of the culture.

7.
The
rallying-cry:
Where cross-divisional support is required, the
intrapreneurial startup becomes the lightning rod or rallying cry which
attracts additional resources from across the company matrix. Friends are
on-boarded. For skeptics, a mixture of soft and hard selling, collaborations,
and “socializing” is used to develop a joint sense of ownership.

8.
“Do-whatever-it-takes”-ness:
This very real but intangible quality of the intrapreneurial team makes the
team standout from the rest of the organization. Team members are often in a “sink
or swim” situation where seniority, tiles/roles, and job descriptions are
subservient to the problem or task at hand. One is expected to wear several
hats and pull his/her weight. The peer pressure to keep up is intense, yet the
atmosphere of fun and camaraderie remains.

9.
Lean and
focused:
The scope is limited to a particular industry domain, market
segment, customer problem, or a finite set of “key plays” with a common
strategic control point. In spite of the backing from its larger parent
organization, the intrapreneurial startup doesn’t seek to boil the ocean.
Innovation is accompanied with a heavy dose of pragmatism which ruthlessly
distinguishes between value-adding and non-value adding activities. The
intrapreneurial startup seeks the most direct path to solving the customer’s
problem.

10.
Profit-Driven:
Again, I make the distinction that intrapreneurial startups are profit-centers,
not cost-centers or investment-centers. The end goal is money – not just
increased mindshare, successful pilots, or more patents.

11.
Urgency:
The team is held accountable to performance measures and milestones which must
be met by a pressing deadline which is either imposed by an external customer
or by the internal executive sponsor. The startup’s survival and continued
funding depends on the achievement of these milestones, which may include targets
for revenue, profitability, press mentions, productivity ratios, and ROI. In
most cases, both the target measures and the time frames are aggressive with
3-5 year planning horizons.

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12.
Risk:
Intrapreneurial startups are accompanied with the same kinds of risk associated
with entrepreneurial startups. These risks include financial, technological,
legal, reputational, et al. For each team member, there’s a general sense that
more is at stake; that their personal decisions and actions have significant
impact on internal and external stakeholders.

13.
Exit:
Just as an entrepreneurial startup may have an exit, e.g., IPO’ing or getting
acquired, an intrapreneurial startup may also have an exit once it reaches a
measurable stage of maturity. It can be spunoff, rolled into existing
divisions, or “graduated” into its own formal, standalone line of business.

Varying degrees of intrapreneurship exist from one
organization to another. Some are more formal than others. Some foster
innovation, but not necessarily intrapreneurship. For example, at Google,
engineers are allowed to allocate 20% of their time on ‘pet projects’ which
have nothing to do with their primary job. Is this intrapreneurship or R&D?

So are you an intrapreneur or just an employee? Will your
actions today lead to big changes in the way your company and customers operate
and think? I hope that the characteristics above provide guidance on where you
fall in the spectrum between traditional R&D and intrapreneurship. I
believe that the more you are exposed to these experiences in an
intrapreneurial startup, the more you are ready to embark on your own
entrepreneurial path.

About the author

Jeff is a Certified Trained Lean Six Sigma Black Belt with a focus on finding new ways to apply technologies related to process improvement – situations which demand entrepreneurial thinking, a deep understanding of the financial impact of technology decisions, and collaboration with strategic partners. At IBM's Retail Emerging Business Opportunity Group, a corporate "startup", Jeff launched an SMB-focused business which later grew to account for 20% of EBO revenues worldwide.

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