Leading At Every Level
“Great ideas are what drive organizations forward. Those that fail to embrace innovation and change may lose more than a missed opportunity,” serial entrepreneur Hernan Lopez writes in an article titled “You Have a Great Idea, But You Work for Someone Else. What Do You Do With It?” on Entrepreneur.com.
As the former founder and CEO of Wondery, a podcast network, Lopez knows a thing or two about entrepreneurship. But he’s not talking about entrepreneurship in this article—he’s talking about intrapreneurship.
Intrapreneurship is when an employee drives innovation that advances existing business goals (like growth, engagement) and tests those new ideas. It’s similar to entrepreneurship, but instead of creating a startup, they work on the inside of their organization.
For many of us, intrapreneurship is a new term. Yet the concept has been around for some time. According to an article posted by MIT Management’ Sloan School in June 2018, Gifford Pinchot III and Elizabeth Pinchot used the word in their 1978 paper “Intra-Corporate Entrepreneurship” and again in their 1985 book “Intrapreneuring.”
At Holiday Showcase® last December, Dr. Simone Ahuja spoke on intrapreneurship during her keynote address. Ahuja is CEO of Blood Orange, a global innovation strategy firm that works with Fortune 500 companies. She’s also a bestselling author and co-developer of Jugaad Innovation, a frugal and flexible innovation methodology that lends itself particularly well to the nonprofit model because it doesn’t rely on traditional resources (like budget).
Ahuja spoke with us again for this article, elaborating on concepts she introduced at Holiday Showcase and applying her strategic insights to association work.
What is intrapreneurship, and how do you incorporate it into association work?
What is innovation? This is a question Ahuja often asks rhetorically in her keynote addresses. “The truth is, even in my own industry, people don’t always have clarity on that,” she says, adding, “Even if you go to the world’s most innovative organizations, they don’t always have a shared definition of innovation; which makes it pretty hard to go after.”
Ahuja defines innovation as creating new value. The value could be a myriad things: increasing customer satisfaction, increasing usability and accessibility, or increasing customer reach. “Innovation is not just about the next iPhone,” she says. “It’s not only about flying cars … Mostly it’s new value creation in the things we do every single day.”
With this definition, Ahuja scales innovation to something attainable for any organization. While she works with corporations such as Target, Pepsi, and US Bancorp, Ahuja’s definition of innovation is just as applicable to nonprofit associations. We have members, not customers. Yet, creating everyday value is paramount to an association’s success and longevity.
“Innovation often feels massive and overwhelming,” Ahuja says. But, she stresses, we have to change the way we think about it. “When innovation means value creation, it applies to user experience, for example, do our members feel heard, getting someone through a line at a conference more quickly, or enjoyably,” she says. This creates value because it saves time and reduces frustration.
Reflecting on Blood Orange’s 8-week innovation workshops, Ahuja says that after using our methodology, many participants realize that the problem they are trying to solve is reducing frustration. While the concept sounds simple, it’s applicable to every department of an association. Your leadership is trying to conduct efficient and effective board meetings (I.e., reducing frustration for board members). Your communications team is updating the website with an eye for high value content and usability (I.e., reducing frustration for members). Your conference staff is booking the very best speakers while choosing thoughtful and inclusive menus (I.e., reducing frustration for attendees). Your finance department is setting up ACH payments to get vendors paid faster (I.e., reducing frustration for preferred vendors). You get the idea.
“How do we know we’re solving the right problems?” Ahuja asks, adding that many innovation initiatives start with assumptions, rather than a clear process to identify problems to solve. Research, member surveys, and focus groups may get you closer to an answer. But Ahuja also recommends paying attention to a variety of feedback channels. Are people complaining a lot about something? Take note. “Questions like, ‘Why do we do it that way?’ are an excellent prompt to help identify pain points and encourage intrapreneurship,” she adds. This is where “leadership at every level” truly takes shape.
It’s unlikely that your executive leadership is fielding daily calls from members. Depending on the size of your staff, there may be several layers insulating leadership from the everyday frustrations and “unmet needs” of the people they serve. By empowering all staff members to innovate, association leaders can not only identify the right problems to solve, but also create a sense of agency and engagement while bolstering your association’s growth.
Creating a culture of innovation and intrapreneurship
Our previous issue of FORUM Magazine (Dec. 2022) explored agility and associations. Agile Methodology is a well-known system in the IT and software development world that is increasingly being applied to all types of businesses. Agile associations move quickly by producing work in cycles, continuously testing ideas, and reviewing projects with a mind towards improvements. What’s foundational about this approach to business is building psychological safety and trust within a team. Innovation can’t happen without it.
Intrapreneurship shares this approach. In 2015, Deloitte published a whitepaper offering five insights on intrapreneurship. Insight 1: “Intrapreneurship describes a people-centric, bottom-up approach to developing radical innovations in-house.” In essence, intrapreneurship thrives on leadership at every level.
According to that same Deloitte paper, 88 percent of Fortune 500 companies in 1955 were no longer present in 2015. It’s not that they didn’t make the list—they no longer existed.
Fortunately, associations have stood the test of time. Like several Chicago associations, Association Forum is more than 100 years old. But we can hardly expect to operate the same way we did 100 years ago. In addition, change seems to move faster these days. One reason for this is due to technology. Technological advances are literally growing exponentially and we have more information at our fingertips right now than ever before.
According to the U.S. Chamber of Commerce Foundation, 90 percent of the world’s data has been produced in just the last two years. So how does your organization keep up?
“Our primary revenue sources cannot be the same as they always were,” says Ahuja. She acknowledges that some organizations have a strong hold on their industries, but she still pushes the idea of innovation to ensure those organizations can not only maintain their place, but grow sustainably. “Leaders, managers and employees often have the same question – where do we start? We suggest starting with the unmet need of the customer.”
She outlines a simple framework to identify these needs: the functional need, the emotional need, and the social need. The functional need is what a product or program does for a customer, whereas the emotional need is how it makes them feel. Finally, the social need is how the customer wants to be perceived. Ahuja stresses that listening to members is important, but observing them is equally valuable to hone in on their needs – especially those that often go unsaid.
Deloitte Insight number 5 asserts that “intrapreneurship requires a different management approach.” According to Deloitte’s research, an intrapreneur’s skill set and intrinsic motivations strongly differ from the average employee—so why would you manage them the same? The report lays out seven steps that can create a healthy intrapreneurial environment: support, autonomy and responsibility, motivation and incentives, compensation, resources, communication, structure and processes.
“Entrepreneurial companies have a decentralized structure, where managers delegate decisions to the lowest possible level to ensure that they are made by those with the most knowledge,” the report reads. This is not unlike the workings of agile organizations.
“My firsthand experience and emerging research make it clear that intrapreneurs feel a sense of agency,” Ahuja says. She says that empowering the intrapreneurs in your organization creates engagement because they feel valued, they can feel the progress, and they are typically passionate about the work they are doing. What’s more, the organization can see immense returns.
Companies like Google (20% time) and Facebook (hackathons) are famous for encouraging innovation. 3M’s post-it notes were created by an intrapreneur working on adhesive for the aerospace industry. Playstation was created by an intrepreneurial Sony employee.
For associations with less resources than a Fortune 500, how can they encourage innovation? “Start talking about innovation and build it into things that already exist,” says Ahuja. She says that leaders need to signal to employees that it’s ok to test things out and innovate from inside the organization.
“Let’s say you have a standing, small group meeting,” says Ahuja, adding, “and at the beginning of that meeting for 10 minutes, everyone shares an idea and tells us what problem it’s rooted in. There may be additional discussion or ideas that build on the original idea. A simple practice like this can help you start to build a community that’s willing to share, and one that feels empowered to help the organization advance.” This requires vulnerability from leaders to create psychological safety. Leaders can do this by demonstrating what it looks like to share new ideas and also listen without judgment, Ahuja says.
Encouraging intrapreneurship can pose a challenge to conventional management styles, but the payoff can be huge. Remember, “intrapreneurship isn’t about going off the rails – it’s about advancing existing business goals better, faster and with fewer resources,” says Ahuja. “The benefits are a sustainable growth and a healthier culture including team members who feel dialed in and engaged, tremendous benefits and new value for your membership … all of which have a ripple effect on society. It’s pretty significant,” she says.
How to become an intrapreneur
According to Deloitte, “it’s not about creating intrapreneurs, it’s about finding and recognizing them.” If you are the type of person who is brimming with ideas and looks at challenges not as setbacks, but as a puzzle to be solved, there’s a good chance you have the intrapreneurial spirit.
But first, let’s back up and discuss why you would want to be an intrapreneur in the first place. After all, if your idea is that great, why not become an entrepreneur and profit off your success?
Lopez outlined the many pros of intrapreneurship in his article: “you will not need to spend excessive time procuring funding, setting up legal entities or deciding which health plans to offer for employees you haven’t even hired yet. Instead, you will benefit from a brand, a client list and access to colleagues who will return your calls and offer help. You’ll continue to get a cash salary that’s significantly above what typical startups provide, as will your team. And if you have a family, you won’t have to take them on a daily rollercoaster ride.”
In essence, you take on much less risk as an intrapreneur than you would as an entrepreneur. Lopez is an interesting advocate for intrapreneurship, because he chose to become an entrepreneur when he left his role as CEO of Fox International Channels to start Wondery. But he doesn’t think his decision is for everyone. In fact, he offers four questions that helped him make his decision:
- Does your company encourage internal innovation?
- How does the company treat projects that fail?
- How long will it take?
- Have you already used any company assets?
His fourth point is critical from a legal standpoint. “Even if you only wrote a business plan draft on the company laptop while on vacation, you must bring the idea to your employer,” Lopez writes.
Questions one and two have to do with your organization’s culture. Ultimately, you need to assess whether this is a safe place to pitch and explore innovative ideas. Organizations that penalize failure don’t promote innovation.
If you feel your idea is fit for intrapreneurship, consider approaching your leadership. Pay attention to your organization’s culture and be prepared to hear “no.” Entrepreneurs hear “no” all the time. Unlike an entrepreneur, most intrapreneurs have to take “no” for an answer. But don’t let that deter you. Either use the opportunity to go back to the drawing board, or consider making a move to an organization that’s more supportive of innovation. Ahuja offers a “recontracting” worksheet that helps employees reimagine their role in innovation, and build a simple plan for approaching managers, so managers can say yes to intrapreneurship more often.
What truly sets intrapreneurs apart is passion. Intrapreneurship involves hard work and risk. You must be passionate about the project to pursue it and take on the extra work and stress that comes with innovation.
Remember Gifford Pinchot III, who is credited for first using the term “intrapreneur”? Here are 10 commandments he offers from his book “Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur.”
- Work underground as long as you can—publicity triggers the corporate immune system
- Remember it is easier to ask for forgiveness than for permission
- Do any job needed to make your project work, regardless of your job description
- Follow your intuition about the people you choose, and work only with the best
- Circumvent any orders aimed at stopping your dream
- Find people to help you
- Never bet on a race unless you are running it
- Be true to your goals, but realistic about the ways to achieve them
- Honor your sponsors
- Come to work every day willing to be fired
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