Intrapreneurs Are Not Entrepreneurs

Intrapreneurs in large organizations are not the same as
entrepreneurs at start-ups. Stated flatly, that’s pretty obvious. Yet my experience
tells me that many of us take the wrong lesson from that simple statement.

Read one way, it is a call to action for largeorganizations:wall off new initiatives to better unleash creative entrepreneurialzeal. Thisis the story told by Kelly Johnson’s skunk worksat Lockheedor the Macintosh pirateflag at Apple.That is an approach I have been taught and have championed in the past -whatbetter way to be a champion than to lead an innovation revolutionagainst thestatus quo?

However, the more I look at how people work,including myself, the more suspicious I get about the idea. It is truethat a well-executed skunk works eliminates some large-organizationbureaucratic problems and providessome of the deep-pocket benefits of executing under a big tent. It isalso true that such an approach comes withmany of the problems of entrepreneurial resource constraints whileproviding far less your-fate-is-in-your-hands motivation and disciplineon either the upside or downside. WhileI don’t have proof, I expect that such intrapreneurial ventures areactually morelikely to fail to meet expectations than comparable entrepreneurial ventures, and not justgiven updatedresearch about entrepreneurial success rates.

To help explain why, let me first outline some keypoints aboutlarge organizations, by which I mean market leaders orsovereign states that:

  • Spenda lot of time estimatingand measuring “return on investment” or ROI. This is natural, since theytakein and spend a lot of money. Save 10% of $100M and suddenly you are inthemarket for your own low-end private island. Grow a $500M business by 10%andyou’re talking Caribbean island with an airport and fresh water.
  • Activelymanage risk becausethey have a lot of stakeholders and a lot to lose. Again, perfectlynatural…everyoneis gunning for the guy out in front with a bag full of cash. Why do weall takeour shoes off to get on airplanes? Because in the sense of ‘protect andserve,’the government doesn’t want to risk losing us.
  • Arelargely focused onexisting customers or citizens, or should be. Unless your customer baseisgrowing by ~20% annually, chances are you have more customers today thanyouwill attract new customers over the next five years. And if yourcountry, stateor province is growing faster than 20% a year…well, they have a pillfor that.

In short, large organizations regularly spend andmake a lotof money, and have a lot to lose, thanks to large customer bases.

Sound like an exciting, high-stakes place to workif youwant to have a big impact in the world? Yep. Sound like fertile groundfor an entrepreneurialventure? Nope.

To see why, consider what entrepreneurs do. We allhave our ownopinions, and a large hagiography has built up over the past couple ofdecadesin particular. I don’t want to rehash it all here, because I think myformerprofessor BillSahlmansums it up nicely: “They pursue opportunities beyond the tangibleresourcescurrently controlled by their organizations. And they’re driven toidentify newopportunities, not protect what their companies already have.”[emphasis added]

That is not what intrapreneurs do. Here is mydefinition of an intrapreneur, using the same format: “They pursueopportunities leveraging theconsiderable resources currently controlled by their organizations.And they’re driven toidentify missed opportunities, finding new ways to extend whattheir companies alreadyhave.”

What are the key similarities and differencesbetweenwhat entrepreneurs and intrapreneurs do? 

LikeEntrepreneurs

UnlikeEntrepreneurs

Marshalpeople and money to pursueopportunities

Marshalexisting brand equity andcustomer relationships

Blazenew trails and motivatepeople

Workwith existing systems and peoplethey don’t control

Seekupside

Managedownside

 

In otherwords, intrapreneurs see missed opportunities, know howto work the system, and are pragmatic andpersistent as hell.

So why not raise theentrepreneurial pirate flag over your skunk works project and sallyforth? Because you leave your organizations biggest strengths behind,and take on all the risks of a start-up, only without the same carrotsand sticks. As inspiringas it is to imagine a young boy’s sling stone taking out a giant, youcan have greater impact by standing on the shoulders of giantsand steering their course than by hoping for a lucky strike.

So why does the literature abound with exhortationsto ‘be entrepreneurial,’ and braggadocio about ‘entrepreneurialcultures’? Because the entrepreneurial myth is a good story that you cansell like sugar water because every business was started by anentrepreneur, and business begins and ends with BS. ‘Be entrepreneurial’is not pragmatic advice for the next wave of intrapreneurs.

If nothing else, intrapreneurs hadbetter be pragmatic. While it’s great to beking of the hill, it can be extremely frustrating to try to innovateinside large, successful,risk averse organizations. Especially when you are shackled to the baneofevery intrapreneur’s existence: existing enterprise systems. Waving thepirate flag is one way to try scaring away that boogey man. But anotherway is emerging…and that is a story foranother day.

Fancy yourself anentrepreneur? Then hit the bricks and get to work, but do yourself afavor and do it somewhere else.

Determined to bepart of a new crop of intrapreneurs? Follow me on Twitter @erikdlarson.