Intrapreneurs (corporate entrepreneurs) (do not) inhibit organizational performance

202103

Growth and renewal are crucial aspects of a company’s sustainable competitiveness. It is essential to promote these and to consolidate them within one’s own organization. One answer to the challenge of continuous development is offered by intrapreneurship (corporate entrepreneurship) approaches. For entrepreneurs, they represent an opportunity to activate the creative power of their employees in a targeted manner.

By Christopher Kuhl

The majority of entrepreneurs and top managers are constantly confronted with the pressure of growth and further development of their own company. In order to be able to survive on the market in the long term, organizations try to renew themselves strategically, to take new directions or to identify new business areas. Investments in start-ups and cooperations such as joint ventures are considered just as much as innovation management to create ideas and organize innovation processes. Only those who constantly develop new, demand-driven solutions will be successful on the market in the long term. So how can approaches and answers to these challenges be sustainably promoted in a company – without getting lost in the complexity of the measures?

Drivers of success in companies

An accurate answer to this question is provided by the meta-study by Bierwerth et al., which examines the relationship between intrapreneurship and the performance capability of an organization. The authors define the term intrapreneurship as formal or informal activities at the corporate level that focus on the development of new business opportunities in the form of strategic renewal, innovation and participation. Taking into account 13,237 companies, the authors identify a clear link between intrapreneurship activities and the objective, subjective as well as overarching performance of the companies (Bierwerth et al., 2015).
Strong intrapreneurship activity shows positive effects on key figures such as return on sales, revenue growth or profitability (objective performance). In addition, the activities have a positive impact on customer satisfaction for instance (subjective performance). Despite the study year being 2015, the results are highly relevant and are confirmed, among others, by the Intrapreneurship Monitor of 2020 of the University of Bayreuth. Intrapreneurship is still considered one of the most important drivers for organizational success and performance capability. In the coming years, promoting entrepreneurial and innovation-oriented behavior among employees will continue to grow in importance (Baum & Isidor, 2020).

Satisfaction with intrapreneurship approaches is reflected in the shape of output: More than 50 % of the companies surveyed state, that they developed up to five innovations through their intrapreneurship activities in the past two years. In about 80 % of these, at least one innovation was still active in 2020.

Intrapreneurs – the innovators of tomorrow

Now, what possibilities do entrepreneurs and top managers have to promote intrapreneurship activities in their organization in order to find answers to the challenges of continuous growth and further development? In general, three levels should be addressed to promote intrapreneurship:

  1. The mindset: intrapreneurs need a specific attitude and mindset towards the unknown, complex and uncertain. They should face typical resistances in their own organization with company culture-specific skills and experience (Mohedano-Suanes, A. & Garzo ́n Ben ́ıtez, D., 2018).
  2. Skills: An intrapreneur should know the company well and know which processes, tools and methods promote innovation and how they fit with the company’s mission and vision. He or she should be able to inspire colleagues with empathy and proactivity, to motivate them, but not to overwhelm them.
  3. The framework conditions: For an intrapreneur to be effective, he or she must not be held back by organizational hurdles. A specific budget, resources and working materials should be available.

Looking at these three levels, intrapreneurship can be fostered in organizations, which can have a positive impact on organizational performance in terms of strategic renewal, innovation and participation.

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