Intrapreneurship is the practice of using entrepreneurial skills without taking on the risks or accountability associated with entrepreneurial activities. It is practiced by employees within an established organization using a systemised business model. Employees, perhaps engaged in a special project within a larger firm are supposed to behave as
entrepreneurs, even though they have the resources and capabilities of the larger firm to draw upon. Capturing the dynamic nature of entrepreneurial management (trying things until successful, learning from failures, attempting to conserve resources, etc.) adds to the potential of an otherwise static organizations without exposing those employees or self employed people to the risks or accountability normally associated with entrepreneurial failure.
The term itself dates to the 1983 PhD dissertation by Burgelman and later defined in a 1985 book by Gifford Pinchot III, "Intrapreneuring"; a revised edition, entitled "Intrapreneuring in Action" is currently published. The concept apparently dates back to 1976.
The term was later applied to the self-employed worker by
Ed Ludbrookin his 2008 book '100% Confidence' to describe the self-employed people who operated a systemised business opportunity, such as franchising or a Network Marketing/MLM business. The use of this term helps name the differences in entrepreneurial activity and the theory that most business opportunity seekers are not just risk-adverse, they will not accept high levels of risk that entrepreneurs will.
An employee "Intrapreneur" is the person who focuses on innovation and creativity and who transforms a dream or an idea into a profitable venture, by operating within the organizational environment. Thus, Intrapreneurs are "Inside
entrepreneurs" who follow the goal of the organization.
Employees, perhaps engaged in a special project within a larger firm are supposed to behave as entrepreneurs, even though they have the resources, capabilities and security of the larger firm to draw upon. Capturing a little of the dynamic nature of entrepreneurial management (trying things until successful, learning from failures, attempting to conserve resources, etc.) adds to the potential of an otherwise static organizations without exposing those employees to the risks or accountability normally associated with entrepreneurial failure.
Many companies are famous for trying to setup internal organizations that promote innovation within their ranks. One of the most well known is the "Skunk Works" group at
Lockheed Martin. The group was originally named after a reference in a cartoon, and was first brought together in 1943 to build the P-80 fighter jet. Because the project was to eventually become a part of the war effort, the project was internally protected and secretive. Kelly Johnson, later famous for Kelly's 14 rules of intrapreneurship, was the director of this group.
Another example could be
3M, in which they encourage many projects within the company. They give certain freedom to employees to create their own projects and they even give them fund to use for these projects.
A self-employed Intrapreneur is the person who builds a business based on a business format or system sold by another company. They operate within set policies and procedures. This business offers a low risk alternative to creating your own business.Self-employed Intrapreneurs are estimated to be the majority of people investigating business opportunities as few people have the acceptance of risk necessary to be an entrepreneur [link entrepreneur] .
FranchisingThe $2trillion global franchise industry has been built on appealing to Intrapreneurs. This industry was pioneered appealing to entrepreneurs and its failure rate produced widespread condemnation by 1970s and was called Pyramid Selling. The industry then evolved their franchisee systems to a competence basis which ensure minimum skill levels and performance. It reduced the failure rate to such a low level that failure in franchising is considered unusual. The most famous franchise is McDonalds that requires new franchisees to attend their Hamburger University and study for a minimum of 9 months full-time to prove their competence in their business system. This has ensured that McDonalds franchisees effectively never fail.
Over 95% of companies in the $100bn Direct Sales industry now offer a leadership business opportunity. The opportunity is to earn commissions on the sales network you built. This is why it is known as a Network Marketing or MLM opportunity. The business opportunity is claimed to be a systemised business like a franchise system.Direct Sales industry also seeks to attract Intrapreneurs yet has pioneered its industry like the Franchise industry with entrepreneurs and thus has produced unacceptably low success rates.
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