1.2 History and evolution of intrapreneurship
7 min read•august 21, 2024
Intrapreneurship emerged as a response to changing business environments and increased global competition. It bridges the gap between entrepreneurial innovation and established corporate structures, representing a shift towards fostering internal creativity and risk-taking.
The concept has evolved from isolated initiatives to a strategic organizational approach. It reflects the changing nature of work and the increasing value placed on innovation in corporate settings, transforming how companies approach internal creativity and growth.
Origins of intrapreneurship
- Intrapreneurship emerged as a response to rapidly changing business environments and increased global competition
- Concept bridges gap between entrepreneurial innovation and established corporate structures
- Represents a shift in organizational thinking towards fostering internal creativity and risk-taking
Early corporate innovation examples
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- pioneered internal innovation culture led to groundbreaking inventions (transistor, laser)
- 's Skunk Works developed advanced aircraft designs through autonomous project teams
- 's practice of allowing scientists to pursue independent research resulted in revolutionary products (nylon, Teflon)
- 's independent business units fostered development of personal computers
Coining of the term
- III introduced "intrapreneurship" in 1978 article for Tarrytown School for Entrepreneurs
- Term combines "intra" (within) and "entrepreneurship" to describe entrepreneurial activities inside established organizations
- Pinchot's 1985 book "Intrapreneuring" popularized concept among business leaders and academics
- Definition evolved to encompass employee-driven innovation and corporate venturing initiatives
Evolution of intrapreneurial concepts
- Intrapreneurship has transformed from isolated initiatives to strategic organizational approach
- Reflects changing nature of work and increasing value placed on innovation in corporate settings
1970s and 1980s developments
- Focus shifted towards fostering innovation within large corporations to maintain competitive edge
- Japanese management practices influenced Western companies to adopt more collaborative approaches
- (TQM) movement emphasized employee involvement in continuous improvement
- 's "In Search of Excellence" highlighted importance of innovation-friendly corporate cultures
- Emergence of corporate venture capital units to invest in promising internal projects
1990s expansion and recognition
- Intrapreneurship gained wider recognition as viable strategy for corporate renewal
- Dot-com boom accelerated adoption of entrepreneurial practices within established firms
- Companies began implementing formal intrapreneurship programs and innovation labs
- Increased academic interest led to development of theoretical frameworks and case studies
- Rise of knowledge economy emphasized importance of leveraging employee creativity and expertise
Key figures in intrapreneurship
- Influential thinkers and practitioners shaped development of intrapreneurship as distinct field
- Corporate leaders who implemented successful intrapreneurial initiatives served as role models
Influential thought leaders
- Gifford Pinchot III popularized intrapreneurship concept and provided practical guidelines for implementation
- Rosabeth Moss Kanter researched innovation in large organizations and advocated for "corporate entrepreneurs"
- Peter Drucker emphasized importance of innovation and entrepreneurship within existing businesses
- 's work on highlighted need for intrapreneurial thinking
- Eric Ries' methodology influenced intrapreneurial practices in established companies
Corporate pioneers
- at Apple fostered intrapreneurial culture leading to groundbreaking products (iPod, iPhone)
- of Nucor Steel implemented decentralized management structure encouraging employee innovation
- promoted intrapreneurship across Virgin Group's diverse business units
- of Procter & Gamble championed "Connect and Develop" model
- of Amazon institutionalized "Day 1" mentality to maintain startup-like agility and innovation
Historical intrapreneurship case studies
- Examining successful intrapreneurship initiatives provides insights into effective implementation strategies
- Case studies demonstrate long-term benefits of fostering internal innovation culture
3M's innovation culture
- Implemented "15% time" policy allowing employees to work on personal projects
- Resulted in development of iconic products (Post-it Notes, Scotch Tape)
- Encouraged cross-pollination of ideas between different departments and divisions
- Established "Tech Forum" for sharing knowledge and collaborating across organizational boundaries
- Implemented "dual ladder" career path allowing technical experts to advance without becoming managers
Google's 20% time policy
- Allowed employees to dedicate 20% of work time to personal projects
- Led to creation of successful products (Gmail, News, AdSense)
- Fostered culture of innovation and experimentation throughout organization
- Attracted top talent by offering creative freedom and autonomy
- Policy evolved into more structured "Area 120" internal incubator program
Intrapreneurship vs traditional management
- Intrapreneurship challenges conventional hierarchical structures and decision-making processes
- Represents shift towards more agile and innovative organizational models
Shifting organizational structures
- Move from rigid hierarchies to flatter, more flexible organizational designs
- Implementation of matrix structures to facilitate cross-functional collaboration
- Emergence of "ambidextrous organizations" balancing efficiency and innovation
- Adoption of project-based teams and temporary task forces for specific initiatives
- Increased use of internal networks and communities of practice to share knowledge
Employee empowerment trends
- Greater autonomy and decision-making authority granted to employees at all levels
- Shift from command-and-control leadership to coaching and mentoring approaches
- Implementation of idea management systems to capture and evaluate employee suggestions
- Increased focus on developing entrepreneurial skills through training and development programs
- Recognition and reward systems aligned with intrapreneurial behaviors and outcomes
Global spread of intrapreneurship
- Intrapreneurship concepts have been adopted and adapted across diverse cultural contexts
- Global competition has driven multinational corporations to foster innovation worldwide
Cultural adaptations
- Collectivist cultures emphasize team-based intrapreneurship over individual initiatives
- High-context cultures adapt communication strategies for pitching and promoting ideas
- Power distance considerations influence how intrapreneurial programs are structured and implemented
- Risk tolerance levels affect willingness to support experimental projects and accept failure
- Local innovation ecosystems shape interactions between intrapreneurs and external partners
International success stories
- 's employee suggestion system led to millions of implemented improvements
- 's Innovista program encourages innovation across diverse businesses in India
- 's "RenDanHeYi" model transformed Chinese appliance maker into global innovator
- ' global innovation network connects intrapreneurs across countries and divisions
- 's C-Lab (Creative Lab) nurtures employee-driven projects in South Korea and globally
Technological impact on intrapreneurship
- Rapid technological advancements have transformed how intrapreneurship is practiced and supported
- Digital tools and platforms have enabled new forms of collaboration and idea development
Digital transformation effects
- Cloud computing and collaboration tools facilitate virtual intrapreneurial teams
- Big data and analytics provide insights for identifying opportunities and validating ideas
- Social media and internal networks enable rapid sharing and iteration of concepts
- Artificial intelligence and machine learning augment human creativity and decision-making
- Internet of Things (IoT) creates new possibilities for product and service innovation
Startup methodologies in corporations
- Lean Startup principles adapted for corporate innovation projects
- Design thinking approaches integrated into intrapreneurial problem-solving processes
- Agile methodologies applied to internal product development and project management
- Growth hacking techniques utilized for rapid experimentation and scaling of initiatives
- Open innovation platforms connect internal intrapreneurs with external partners and resources
Intrapreneurship in different industries
- Intrapreneurial practices have been adopted across diverse sectors with industry-specific adaptations
- Varying competitive landscapes and regulatory environments influence intrapreneurship approaches
Manufacturing sector evolution
- Shift from centralized R&D to distributed innovation networks
- Implementation of rapid prototyping and 3D printing for accelerated product development
- Integration of IoT and smart manufacturing technologies drives process innovations
- Adoption of circular economy principles spurs intrapreneurial sustainability initiatives
- Increased focus on servitization leads to new business model innovations
Service industry applications
- Financial services firms establish innovation labs to develop fintech solutions
- Healthcare providers implement intrapreneurial programs to improve patient care and operational efficiency
- Retail companies leverage employee insights to enhance customer experience and omnichannel strategies
- Hospitality industry encourages front-line staff to propose and implement service innovations
- Professional services firms create internal incubators to develop new consulting offerings
Academic research on intrapreneurship
- Scholarly interest in intrapreneurship has grown significantly since the 1980s
- Research contributes to understanding of intrapreneurship dynamics and best practices
Theoretical frameworks development
- Assessment Instrument (CEAI) measures organizational support for intrapreneurship
- Resource-based view applied to explain variations in intrapreneurial performance across firms
- Organizational ambidexterity theory explores balance between exploitation and exploration
- Social network theory examines role of relationships in intrapreneurial success
- Institutional theory investigates how environmental factors influence intrapreneurship adoption
Empirical studies and findings
- Longitudinal studies reveal positive correlation between intrapreneurship and firm performance
- Cross-cultural research identifies universal and culture-specific intrapreneurship factors
- Surveys of intrapreneurs highlight importance of management support and organizational structure
- Case studies document processes and outcomes of successful intrapreneurial initiatives
- Meta-analyses synthesize findings across multiple studies to identify key success factors
Future trends in intrapreneurship
- Ongoing evolution of intrapreneurship reflects changing business landscapes and societal needs
- Emerging technologies and management philosophies shape future directions of corporate innovation
Emerging models and practices
- Ecosystem intrapreneurship involving collaboration with startups, universities, and other partners
- Purpose-driven intrapreneurship aligning innovation efforts with social and environmental goals
- Gig economy principles applied to internal talent allocation for innovation projects
- Blockchain and decentralized autonomous organizations (DAOs) influencing corporate governance
- Neuroscience-informed approaches to fostering creativity and innovation in organizations
Predictions for corporate innovation
- Increased integration of artificial intelligence in ideation and decision-making processes
- Rise of "intrapreneur-as-a-service" platforms connecting companies with skilled innovators
- Greater emphasis on diversity and inclusion to drive innovation through varied perspectives
- Shift towards continuous transformation rather than episodic change initiatives
- Evolution of corporate venturing towards more autonomous and agile investment models
Key Terms to Review (31)
3M: 3M is a diversified technology company known for its innovative products across various sectors, including healthcare, consumer goods, and industrial solutions. Established in 1902, 3M has evolved from a small mining venture into a global leader in research and development, often embodying the principles of intrapreneurship by encouraging employees to create and commercialize new ideas within the organization.
A.G. Lafley: A.G. Lafley is a prominent business leader known for his role as the CEO of Procter & Gamble (P&G) from 2000 to 2009 and then again from 2013 to 2015. He is recognized for his innovative approach to management and his significant contributions to the concept of intrapreneurship, particularly by fostering a culture that encourages employees to act like entrepreneurs within the organization, leading to increased creativity and growth.
Bell Labs: Bell Labs, officially known as Nokia Bell Labs, is a research and development subsidiary of Nokia that has been influential in advancing telecommunications and technology since its inception in the 1920s. It has played a pivotal role in developing innovative technologies and fostering an environment where intrapreneurship can thrive, contributing to groundbreaking inventions like the transistor and information theory.
Clayton Christensen: Clayton Christensen was a prominent American academic and business consultant, best known for his theory of disruptive innovation. His work fundamentally changed how companies approach innovation by emphasizing the need to focus on emerging technologies and market changes that can disrupt established industries. This idea connects deeply with the historical development of intrapreneurship, corporate innovation types, and various forms of innovation.
Corporate Entrepreneurship: Corporate entrepreneurship refers to the process by which established companies foster innovation and agility through entrepreneurial thinking and practices. It enables organizations to explore new business opportunities, create new products or services, and adapt to changing market conditions while leveraging their existing resources and capabilities. This concept is essential in understanding the definition and concept of intrapreneurship, its historical evolution, the characteristics of those involved, and how innovation impacts return on investment.
Disruptive innovation: Disruptive innovation refers to a process where a smaller company with fewer resources successfully challenges established businesses, often by introducing simpler, more affordable products or services that initially cater to a niche market. This approach gradually improves over time and eventually displaces established competitors, fundamentally altering the industry landscape.
Dot-com bubble: The dot-com bubble was a period of excessive speculation in the late 1990s and early 2000s, characterized by the rapid rise and fall of technology stocks, particularly those of internet-based companies. This economic phenomenon saw stock prices soar to unsustainable levels before the market crashed in 2000, leading to significant financial losses and the collapse of many startups. The bubble illustrates the volatile nature of emerging technologies and how they can impact entrepreneurship, especially within corporate settings where intrapreneurship thrives.
DuPont: DuPont is an American multinational company that has played a significant role in various industries, particularly in chemistry and materials science. Founded in 1802 as a gunpowder mill, DuPont evolved over the years into one of the largest and most diversified chemical companies in the world, known for its innovations and intrapreneurial culture that fostered new product development and technological advancements.
Economic Recessions: Economic recessions are periods of temporary economic decline during which trade and industrial activity are reduced, typically identified by a fall in GDP in two successive quarters. These downturns can lead to increased unemployment, lower consumer spending, and a general slowdown in economic growth, which can profoundly affect businesses and innovation.
Gifford Pinchot: Gifford Pinchot was an American forester and politician who served as the first Chief of the United States Forest Service, playing a pivotal role in the conservation movement during the early 20th century. His vision for responsible land management and sustainable use of natural resources resonates strongly with the principles of intrapreneurship, which emphasizes innovation, leadership, and risk-taking within established organizations.
Google: Google is a multinational technology company known primarily for its search engine, which has revolutionized how people access and find information online. Founded in 1998 by Larry Page and Sergey Brin, Google has expanded into various sectors, including advertising, cloud computing, software, and hardware. Its innovative culture has fostered an environment where employees, known as 'Googlers', are encouraged to be intrapreneurs, driving new ideas and projects within the company.
Growth of corporate innovation labs: The growth of corporate innovation labs refers to the increasing establishment and expansion of specialized units within large organizations that focus on fostering creativity, developing new products, and driving technological advancements. These labs aim to harness the entrepreneurial spirit of intrapreneurs by providing a structured environment for experimentation and innovation, ultimately leading to increased competitiveness and adaptability in a rapidly changing market.
Haier: Haier is a global home appliances and consumer electronics company that originated in China and has become a symbol of innovation and intrapreneurship. Known for its focus on customer-centric products and rapid adaptation to market changes, Haier exemplifies how a company can foster an entrepreneurial spirit within its organizational structure, enabling employees to pursue new ideas and solutions effectively.
IBM: IBM, or International Business Machines Corporation, is a multinational technology and consulting company known for its innovations in computing and information technology. Founded in 1911, IBM has played a pivotal role in the evolution of intrapreneurship, leveraging its resources and fostering a culture that encourages innovation within its workforce to drive business growth and adaptation in changing markets.
Innovation Management: Innovation management is the systematic process of managing ideas, resources, and activities to foster the development and implementation of new products, services, or processes. This approach not only focuses on creativity and ideation but also emphasizes the importance of aligning innovative efforts with organizational goals and market demands, which is crucial for sustained competitive advantage.
Jeff Bezos: Jeff Bezos is the founder of Amazon, one of the largest e-commerce companies in the world, and a key figure in the development of intrapreneurship through his innovative leadership style and commitment to customer-centric business practices. His entrepreneurial journey has inspired many within organizations to embrace intrapreneurship, fostering an environment where employees can act like entrepreneurs within the company, driving innovation and growth. Bezos's approach emphasizes experimentation, long-term thinking, and a willingness to take risks, all essential components of successful intrapreneurship.
Ken Iverson: Ken Iverson was an influential figure in the field of intrapreneurship, primarily recognized for his role as the former CEO of the steel company Nucor Corporation. He is renowned for fostering a culture of innovation and entrepreneurship within a corporate setting, which significantly contributed to the evolution of intrapreneurship as a key concept in business. His management philosophy emphasized decentralization and employee empowerment, encouraging individuals at all levels to take initiative and act like entrepreneurs within the company.
Lean Startup: The Lean Startup is a methodology that emphasizes rapid iteration, customer feedback, and the development of a minimum viable product (MVP) to quickly validate business ideas. This approach allows entrepreneurs to efficiently test their hypotheses, reduce waste, and adapt their products based on real user data, making it a critical framework for innovation and intrapreneurship.
Lockheed Martin: Lockheed Martin is a global aerospace, defense, and security company formed from the merger of Lockheed Corporation and Martin Marietta in 1995. It plays a critical role in the history of intrapreneurship by fostering innovation within its vast organizational structure, encouraging employees to pursue entrepreneurial initiatives that lead to groundbreaking technologies and advancements in military and civilian sectors.
Open Innovation: Open innovation is a business model that encourages companies to use external ideas and technologies, alongside their internal resources, to advance their innovation processes. This approach fosters collaboration with external partners such as customers, suppliers, universities, and even competitors, leading to a more dynamic and effective innovation landscape.
Peters and Waterman: Peters and Waterman refer to Thomas J. Peters and Robert H. Waterman Jr., who co-authored the influential management book 'In Search of Excellence' in 1982. This work played a significant role in shaping the understanding of effective management practices and the importance of a strong corporate culture, which are key elements in the evolution of intrapreneurship.
Richard Branson: Richard Branson is a British entrepreneur and founder of the Virgin Group, known for his innovative business ventures and adventurous spirit. His approach to business embodies the principles of intrapreneurship, as he encourages creativity and risk-taking within his organizations while also drawing comparisons to traditional entrepreneurship through his establishment of diverse companies.
Samsung: Samsung is a South Korean multinational conglomerate known for its wide-ranging business interests, primarily in electronics, telecommunications, and technology solutions. Its innovative approach and commitment to research and development have positioned it as a leader in the global market, especially in consumer electronics like smartphones and home appliances, reflecting key elements in the history and evolution of intrapreneurship.
Siemens: Siemens is a global engineering and technology company based in Germany, known for its contributions to electrification, automation, and digitalization. Its innovative approaches and intrapreneurial culture have significantly impacted the development of technology and business practices, making it a key player in the history and evolution of intrapreneurship.
Skunkworks: Skunkworks refers to a small, agile team within a larger organization that is given the freedom and resources to work on innovative projects, often outside the standard corporate structure. This approach encourages creative problem-solving and rapid development of new ideas, embodying the essence of intrapreneurship by allowing employees to act like entrepreneurs while benefiting from the resources and support of their employer. Skunkworks teams have been pivotal in the history and evolution of intrapreneurship, showcasing how unconventional approaches can drive innovation and change within established companies.
Steve Jobs: Steve Jobs was a co-founder of Apple Inc. and a key figure in the technology industry, known for his visionary leadership and innovative products. His ability to blend technology with design transformed consumer electronics, making them more user-friendly and aesthetically pleasing, which has had a lasting impact on intrapreneurship as it emphasizes creativity, innovation, and a strong corporate culture within established companies.
Tata Group: Tata Group is a multinational conglomerate based in India, founded by Jamsetji Tata in 1868. It is known for its diverse business interests, which include sectors such as steel, automobiles, telecommunications, and hospitality. The group's commitment to innovation and social responsibility has made it a prominent example of how intrapreneurship can drive growth and social impact within established companies.
The Innovator's Dilemma: The Innovator's Dilemma is a concept that explains how established companies can fail despite doing everything right, mainly because they ignore disruptive innovations that initially seem inferior. This term highlights the challenges organizations face when they prioritize existing customer needs over new, potentially game-changing technologies, leading to missed opportunities in the market. Understanding this dilemma is crucial for intrapreneurs, as they navigate the balance between sustaining current business models and exploring new avenues for innovation.
Total Quality Management: Total Quality Management (TQM) is a comprehensive approach aimed at improving the quality of products and services through continuous refinement in response to feedback from both employees and customers. This philosophy emphasizes the involvement of all members of an organization in enhancing processes, products, services, and the culture in which they work. TQM aligns well with the evolution of intrapreneurship as it fosters innovation and accountability, encouraging individuals within organizations to take initiative and drive improvements.
Toyota: Toyota is a leading global automotive manufacturer known for its innovation and quality. Founded in 1937, it has played a crucial role in shaping modern manufacturing techniques, particularly through the development of the Toyota Production System, which emphasizes efficiency and waste reduction. The company's approach to intrapreneurship has fostered a culture of continuous improvement, known as 'Kaizen', which encourages employees at all levels to contribute ideas for better processes and products.
Venture Building: Venture building refers to the process of creating and developing new business ventures, typically within an established organization. This approach encourages innovation by leveraging the resources, expertise, and infrastructure of the parent company while allowing for entrepreneurial freedom. As a result, venture building fosters a culture of intrapreneurship where employees are empowered to take risks and explore new market opportunities.