Entrepreneurship vs Intrapreneurship

Sue Lebeck noted the following observations on successful intrapreneurship, during Chuck House’s feature presentation for the SVII Innovation Society. Very informative….

An entrepreneur“… is one who has a dream and builds an organization to achieve it.”
An intrapreneur is one who has a dream and tries to achieve it within an already existing corporation.

Entrepreneurs must ensure the technology works, and sell it at a profit.
Intrapreneurs must also get their company to let them do the innovative project to completion
- Change-creators implicitly seek to alter the current smooth operations –
there is naturally going to be resistance from internal players

Intrapreneurial endeavors are best undertaken within a “project organization”
this can operate outside the normal operational rules.
- organized for a specific task
- people are summoned from other work, for a “brief” period
- not a task force, or a committee, but a Project
The Project Team is often not loved by the Operational Team

Innovation projects often require going against the current “best practices” within an organization
- Must prepare the company for the value the project will create
- Must organize the change/transition process
- Must organize the company for success from the project

Categories of innovation
- Leap
- Refine (refine, refine, refine)
- Combine
- Leap again

Some general principles about successful innovation players
- only a few players in an industry will win
- the earliest conceivers are typically not the ultimate marketplace winners
- those who speak, get remembered (e.g. Mead invented “Moore’s Law”; but Moore spoke about it.)

Direct rewards are not always forthcoming in the Intrapreneurial world- if you don’t get traction, you may get fired
- if you get traction, others may try to modify your idea
- if your idea works, others make take the credit
- ultimately, the greatest reward is your Sense of Accomplishment

Few winners, many hidden personal costs- financial or lifestyle sacrifices
- potential harm to family, personal life, career
- uncertainty, stress
- long hours
- often, you have to give up the business in order to see it succeed – have to let someone else take it and manage it to success

Process of Vision and Strategy Forming
- study the world – what might be needed?
- phase 1: try something and test it
- phase 2: set strategy and tune tactics (often people get stuck here, and repeat)
- phase 3: review strategy, and allow new vision to form

Changes occur in the lifecycle of an innovation – these affect the clarity of the original vision- leadership changes
- goal changes
- structural changes

Principles for anticipating (and creating) structural change- seek 10 (nth) changes in technical power
- seek 10 (nth) changes in installed base
- seek “what if…?” scenarios
- understand the dangers of “and if…” scenarios

Trust and Belief
- Laser printer sold 0 units/month for months. Peaked at 6 units/month
- after 9 years, it was rebuilt by the original (trusted) guy; terms: a 2-page contract and a handshake
- price went from $3495 in 1984, to $129 in 2008
- huge success

Timing is everything
- Laser-printer originally introduced on December 7th (Pearl Harbor)
- It was a Japanese-driven product
- it did not, at that time, succeed!

The HP Phenomenon: Innovation and Business Transformation
By Charles H. House and Raymond L. Price (Draft, Stanford University Press)
- Renewal
- Close to customer
- Transformation
- Staying the course
- Strategic turmoil

Intrepreneuring in Action
- make a contribution
- FAST experimentation
- easier to ask forgiveness than to get permission
- work “underground” – publicity triggers the corporate immune system
- find people to help – collaborate, cooperate, co-opt
- “know the terriroty” – deeply, zealously, passionately
- come to work each day willing to be fired

Four stages of companies
- pre-stage, seed, serendipitous (couple of people)
- startups, someone else puts in $ (about 10 people)
- one-trick pony (500+ people)
- create something that flows

Innovation often gets driven out of bigger companies
- tragic – because bigger companies have the money to invest

HP has kept going- beyond their peers
- model for success:
– built a creative organization from the bottom up
– let the market judge innovative products (even if current leadership didn’t like the product)
– changed product leadership – 6 times (though noisily, with much resistance from the top)
– gave freedom
– ran a franchising incubator
- people who left HP often started other successful companies

The HP Way
- based on worth of individual at every level
- profit shared across the company
- players endured many shifts and changes over the years
- not perfect, but players felt validated, felt like they could make a difference

About Chuck:

Risk-taking and visionary qualities often show up at a young age- it is sometimes in your blood – Chuck’s mother drove 170 miles on the autobahn in the middle of an attack situation
- Chuck and his friend Spike missed a lot of school in the 3rd and 4th grades
- Sources of stimulation that saved him
– Encyclopedia Brittanica
– TV: Lowell Thomas’ travelogue, “The War in the Pacific” (but the visual in the film did not fit with what he’d read and imagined).
– when 13, thought it an outrage that Santa Barbara and San Diego beaches were at risk, and wrote about it;
teacher doubted it was his own writing
– when 17, philosophized about the potential of transmutation of soul

Example innovation led by Chuck
April 1, 1982 – Chuck earned the “Medal of Defiance”
… “awarded in recognition of extraordinary contempt and defiance beyond the normal call of engineering duty”
“In total defiance of adverse market studies and surveys concluding the existence of a worldwide market of no more than 50 total large screen electrostatic displays, Charles H. House, using all means available – principally pen, tongue, and airplane to extol an unrecognized technical contribution, planted the seeds for a new market resulting in the shipment of 17,769 large screen displays to date.”
- used by: first artificial heart transplant; first moon walk; first movie special effects; Engelbart; Kay