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    “Intrapraneuring”-It Takes a System #05 Innovation Newsletter

    When considering where truly innovative new products and services come from, especially ones that break norms and are built around new business models, we often tend to think about radical start-up companies and talented, renegade entrepreneurs and innovators.

    These are people that break the mold, march to their own drummer, and carve out space for new and creative approaches. (As an example, see this month’s short article under INSPIRATION, below.) But entrepreneurs on their own aren’t always best-equipped to execute all the things that turn an idea into a successful product, even when they are well-funded.

    Getting a great idea financed is just the beginning. On crowdfunding platforms such as Kickstarter, entrepreneurs are experiencing new pressures¹. They can run into all kinds of difficulties that cause delays and missed deadlines – from trouble getting permits, to difficulties in manufacturing and shipping to unforeseen changes in technology. One example is that of a new charging dock for the iPhone. The product was exceptionally popular and well-funded, but the creators did not anticipate that their design would not be compatible with the new iPhone 5. Now, they’re scrambling to adjust and adapt.

    The age of the intrapreneur

    A recent article in Harvard Business Review² postulates that we are entering a new era of innovation, one in which a form of intrapreneur, the mission-driven “catalyst,” develops not just new technologies but new business models, while working within the context of a larger organization.

    They draw on the resources and assets of the organization – its global infrastructures, brand reputation, partners, patented knowledge, experience with regulators, and process excellence-to execute these new value propositions effectively. They pull together networks of people inside and outside the organization, sometimes with few or no direct reports, to accomplish their objectives.

    What does it take for catalysts to work effectively in an organization? According to the article, it requires:

    • A willingness to embrace “open innovation”;
    • A systemic approach;
    • Simplified and decentralized decision-making; and
    • Being learning focused and failure tolerant. (For more on this, see the September issue of Strategic Innovation, “Refusing to Fear Failure.”)

    Executing well demands a systemic approach

    You can’t count on a few good “intrapreneurs” in your company to save the day on their own initiative; not even those who are mission-driven, creative in getting past obstacles and breaking down barriers, and good at building support; not even when they are backed by strong, senior executive champions.

    Many companies focus on creativity to boost innovation, but most of them already have lots of creative potential, recognized or unrecognized. Our innovation math works like this:
    Creativity × Execution Capability = Innovation Capability.

    In other words, assuming that you’ve already got significant creative ability in your organization, doubling your execution capability would lift your innovation potential far more than continuing to work on enhancing creativity.

    The ability to execute well requires a comprehensive, systemic approach in your company. That means building the right structures for your organization, specifying formal relationships and allowing for informal ones, and mapping decision rights, information flows, and task flows. It means establishing streamlined decision-making paths using criteria that make sense for new ventures. Your “innovation system” must also encompass planning and budgeting processes, norms for evaluating business performance, and performance measures and incentives.

    Companies almost always have entrenched assumptions, mindsets, and biases that can hold back innovation if they are not “forgotten” when working on new value propositions. Consciously building an innovation system with that concern in mind can help you avoid the trap.

    1. Success of Crowdfunding Puts Pressure on Entrepreneurs,” by Jenna Wortham, New York Times (September 17, 2012).
    2. The New Corporate Garage: Where today’s most innovative-and world-changing-thinking is taking place,” by Scott D. Anthony, Harvard Business Review(September, 2012).

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