Posted by: danielrashke | September 4, 2018

Intrapreneurs are Essential to Innovation

Entrepreneurs take on great financial risk in the hope of creating something successful. But what about after they have successfully launched their business? What then? The natural inclination is to play it safe and keep doing what made you successful, but resisting change can be fatal. Times change, markets change, and people change. If you stop innovating because you feel like you’ve “made it,” you may find yourself, and your company left behind.

Our business is a strong example of how change can pay off. My father was an entrepreneur. He went into business selling life, health, and disability insurance to farmers and people who owned small businesses (I cut my teeth working in that business, too). My father was also an intrapreneur as our company evolved to showing those farmers and sole proprietors how they could benefit by adding a medical reimbursement plan and moving those expenses to their business returns.
Entrepreneurship got us started, but innovation and intrapreneurship keep us going and growing– at more than 20% annually.

So, when I was invited to speak at the University of Wisconsin Family Business Center’s Family Business Retreat, I knew I wanted to talk about the importance of intrapreneurship. But then, entirely by coincidence, I came across a Harvard Business Review article titled, “The Myth of the Intrapreneur.” Here I was thinking intrapreneurship was essential, and the Harvard Business Review was saying I was all wet. Or at least, that’s what the title suggested.

The real point of the article, I soon discovered, was that companies can’t count on a single “lone genius” intrapreneur to power their innovation. Innovation, writes author Andrew Corbett, “has to be a company-wide endeavor.” I completely agree. Intrapreneurship isn’t a person. It’s a culture. And since most companies aren’t set up for innovation from the start, change management is necessary to support the shift into a culture that makes it happen. We’ve worked hard at TASC to create that culture. Here are some of the ways we foster innovation.

We start with basic requirements gathering questions: why, when, what, who, how, and where. “Why innovate?” should be your first question. If you don’t know why, it doesn’t pay to put a ton of energy into the “how” or the other questions. Your innovation should be strategic and sustainable.

After “why,” the most important question you need to answer is “when.” In his book, The Innovator’s Dilemma, Clayton Christensen addresses the difficulty of knowing when to innovate. Your business is successful. You’ve got things rockin’. But at some point, your gains are going to level off. Waiting until then is probably too late. Some people believe that with TASC’s continuing success we should be all-in on driving growth and efficiency instead of spending money and resources on innovating for the future. I tell them I’m innovating while we’re successful because I know that eventually, a downturn will happen. It’s inevitable. I just don’t know exactly when it will happen.

Here’s another way to look at it. TASC has done great, but we’re a 40-plus-year-old company. That’s old. And I don’t want to be old. Sometimes the only way to keep a successful company from getting old is to create what I call a midlife crisis. Create a culture that says, “If I don’t start looking for that next new thing, we’re going to be dead soon.” Use that sense of urgency to jump-start your thinking about how to innovate inside of your company.

So how do we make innovation happen? Several ways. We ask our leaders to continually be assessing who has intrapreneurial spirit? Who is thinking about problems and solutions creatively and from a perspective of opportunity as well as risk mitigation? We want those people invited to the innovation tables.

We have a few different groups formed for what we call our Ideation Clubs. People from throughout the company get together during off hours. They take ideas and start throwing them together. They collaborate. We give them resources, tools, food, and beverages. They feed us ideas.

We also have a New Product Development Pool. We train people on how to create a new product or business model. They come away with a resume that says they know product development. We get more talent to help us research and vet new product ideas.

To foster innovation, we allocate money and time to exploration outside of your normal research and development efforts. This doesn’t need to be a big investment – it just needs to be prioritized and committed to by more than just one person. When your innovators land on something with real potential, fund it and then starve it just enough to create a hungry, start-up mentality.

I’ll drill deeper into TASC’s innovation culture and methodology in future posts. Meanwhile, give some thought to why and when your company should innovate.


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