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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.

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.

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.

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.