“Entrepreneurs are not unique to the ownership group of small, privately-held companies. They can also be found working as employees in larger organizations.”
What distinguishes an entrepreneurial venture from just a regular small business? While there are many definitions one could cite, I prefer that of “value creation” (if you can forgive the cliché)! The entrepreneurial business owner can see beyond just making a profit and understands that if you do the right things, you can also create a business that has value that can be realized upon exit.
Contrary to conventional wisdom, entrepreneurs are not unique to the ownership group of small, privately-held companies. They can also be found working as employees in larger organizations – even publicly-traded companies. These “intrapreneurs” are very valuable to their organizations because they help make their companies more valuable.
Here are some things you should be doing to attract and retain more intrapreneurs to your organization:
- Get their involvement with creation of the business plan. You want your people to feel that your business is THEIR business. One of the best ways to do that is to allow them to fully participate in the business planning process. That means more than just letting them observe – instead you have to actively listen and respond to them – and hopefully incorporate their ideas.
- Share the numbers – all of them. Open book management works for all companies of all types and sizes. I first witnessed this in action at Federal Express Corporation in 1983. They posted their key performance indicators (KPIs) on the walls of every room and in every hallway so everyone who worked there could see how the company was doing. Doing this helps create psychological ownership in your most motivated employees.
- Share the rewards. Again – if you want your people to act like entrepreneurial firm owners even when they are not actual owners, treat them as such. If the business performs, they should benefit from it just as they would if they were the real owners of the enterprise. That means paying out a certain percentage of your profits to everyone who’s there – and not through the profit sharing or retirement plan, but rather through bonuses.
- Give people opportunities to act. One reason people start businesses of their own is they want some independence. Recognize that your intrapreneurs are wired similarly. They, too, want a chance to work independently on something and not be micromanaged. You have to be sure your intrapreneurs have these kinds of opportunities or you will lose them.
- Dedicate resources for experimentation. As all of us who own entrepreneurial ventures know, you can’t eat all your seed corn or you won’t have a crop next year. You need to earmark some funds for R&D and for experiments with new service or product lines, or business units that could create growth for the company. And some of this money must be made available to your best intrapreneurs if you want to keep them.
- Eliminate needless bureaucracy and draconian policies. Again – if you look at what drives entrepreneurs to do their own thing you will find they too often become frustrated with what they perceive as needless meetings or approval processes for small purchases, or strict rules about when to work or how to dress. Intrapreneurs are wired similarly. Why run them off just because you have always done things a certain way?
Entrepreneurs or intrapreneurs – it’s in your interest to acknowledge there isn’t much difference. We all need a certain number of them in our businesses if we want our companies to stay competitive and grow.
Mark Zweig is Zweig Group’s chairman and founder. Contact him at email@example.com.