November 4, 2016
5 Pitfalls to Avoid for Intrapreneurs
by Wes Thompson
The challenge for most organizations is not a shortage of ideas but rather the lack of intrapreneurs who can execute on them.
Entrepreneurship is not for everyone, especially in the traditionally complex and conservative insurance business. Honing skills as an “intrapreneur” enables success in a large corporate environment while also developing the mindset to take the leap as an entrepreneur. An intrapreneur is very much like an entrepreneur, except an intrapreneur is an innovator and change agent within the confines of a traditional corporate environment.
Having been through the trenches and formerly serving on the leadership team of two major insurance organizations, becoming an intrapreneur is, unfortunately, easier said than done.
Intrapreneurs are driven employees who can harness ideas and clearly articulate their vision in a way that energizes the organization. Intraprenuers operate at the intersection of experience, ideas and insight. They innovate or facilitate innovation by building capabilities focused on dramatically changing the customer experience.
Ideas Are a Dime a Dozen
The challenge for most organizations is not a shortage of ideas but rather the shortage of intrapreneurs who can bring ideas to life and effectively execute on them to deliver sustainable competitive value. One study published in the Harvard Business Review found that, in a firm with 5,000 employees, there are at least 250 natural innovators; of these only about 25 are great intrapreneurs who can build the next business for your organization.
See also: Insurance Innovation: No Longer Oxymoron
Intrapreneurs have an unusual ability to operate at the intersection of experience, ideas and insight. Within the confines of a traditional corporate environment, these are typically individuals who have a broad view of the business (or businesses), as opposed to someone whose experience has been focused on a singular business unit or discipline. In addition, intrapreneurs do not operate alone but are masters of recognizing the importance of aligning strategy, culture and leadership to create sustainable value. Without this, they are just another employee with a good idea and good intention operating alone in a corner office or cubicle.
- To better understand what makes a successful intrapreneur, perhaps it is best to explain it from the perspective of the pitfalls to becoming an intrapreneur. These pitfalls can be viewed from the intersection of strategy, culture and leadership. An open culture and effective leadership team is essential to nurturing the proper environment for an intrapreneur to flourish. Because I often get questions on how strategy comes into play with regard to facilitating innovation, in my experience I have found it most helpful to discuss it from the perspective of the pitfalls to avoid. To that end, I will focus on five strategic pitfalls to avoid and how a leader can effectively go from just having ideas to becoming an engine for innovation.
The Pitfalls to Avoid in Becoming an Effective Intrapreneur
It all starts with strategy — the integrated set of choices of how the business will achieve its objectives and deliver value to customers.
- Problem and market not clearly defined: The intrapreneur cannot reply to nor expect an organization to have a preexisting framework to prioritize its external threats or weaknesses. Taking the initiative to think about this on your own time via an exercise like a SWOT analysis (strengths, weaknesses, opportunities, threats) puts an aspiring change agent in a position to be seen as a person who takes initiative — and one who is not only looking at problems from an internal micro perspective but from an external macro view as well.
- The customer experience is an afterthought: A recent trend in organizational development is the change of the role of customer service to “customer success” or “customer happiness.” It’s typical particularly in larger organizations and consultancies to get so wrapped up in internal change initiatives that the external customer is almost an afterthought. If you are an intrapreneur with customer-facing responsibilities, establishing a set of key performance indicators (KPIs) for customer success provides a way to test and measure improvement. Approach this from the mindset of being the new leader of an organization — what metrics would you put in place to move the organization from vanity metrics such as call response times to more meaningful KPIs such as net promoter score (NPS) and qualitative data like testimonials?
- No delivery mechanism to bring innovation to market: An idea is not effective until a framework for execution is put in place to test, prioritize, execute and track any internal innovation initiatives. Consider appointing a champion of this initiative who is not only an innovator but is someone with a track record of delivering results. This doesn’t mean going through the expense of simply bringing in a consultant. A simple Google Sheet can be the start of listing the tasks, resources, time required and cost of going to market with an internal innovation. Share this within the organization to give other innovators an opportunity to comment and contribute, thus creating further momentum and interest in seeing these initiatives to fruition.
- A bloated road map: Taking a play from the Lean Startup framework, an established organization need not waste time mapping out a “five-year plan.” The next step is to break the initiative into bite-sized chunks that can be validated and to then proceed to the next stage. For example, suppose one of your innovations is to enable a live-chat service on your enrollment website. Traditionally, this would involve conversations with compliance, IT, marketing and sales — all with the assumption that people will actually use it. Instead, validate it before you even build it by polling existing users if and to what degree they would prefer live chat to your existing email- or phone-based support. If the results are significantly in favor of the chat initiative, then you have just successfully validated a real need without spending a single dime.
- No clear path to revenue: One final and perhaps most important characteristic about successful intrapreneurs is that they have a clear view of how the business will make money and how profits will be delivered and sustained. Few characteristics make intrapreneurs more prepared to move into the world of entrepreneurship than this resolute focus. This is often one of the most difficult challenges of being an effective innovator, particularly if you are entering an entirely new market or vertical or are developing a new product.
There is no better testing ground to becoming an entrepreneur than first testing the waters in a responsible way within your own organization as an intrapreneur. From the leadership team down to the customer service new-hire, innovation should be not another top-down initiative but an organic exercise where employees are encouraged — and rewarded — for thinking outside of the box.