When looking back at the Fortune 500 list in 1955, nearly 90% of the companies are no longer in existence — some were part of mergers and acquisitions, but most either went bankrupt or lost their cultural significance. With the rise of artificial intelligence and an increasingly competitive technology market, companies that stay stagnant are looking at a short-lived future, as consistent, impactful innovation is necessary for organizations to survive.
In order to keep up, a rising number of firms are starting to prioritize intrapreneurship. This people-centric, bottom-up approach to building radical innovations in-house, according to Deloitte Digital, is rapidly replacing, and in some cases supplementing, the practice of outsourcing innovation. By tapping into their current pool of talent, and implementing policies that foster a culture for innovation, experts say more leaders can stay ahead of the curve when it comes to sustaining long-term success.
Benefits of Intrapreneurship
At Google, which was one of the pioneers of formalizing intrapreneurship with its 20% rule, employees are able to devote a fifth of their time working on creative projects that will benefit the company. Since the start of this program in 2014, iconic products that the company is arguably best known for today, such as Google Maps and Gmail, were created. More recently, Google engineers built a rapid Air Raid Alerts System for Android phones in Ukraine as a response to the Russian invasion, allowing the company to provide aid and be impactful for real-time responses that weren’t on the product roadmap.
About the company’s culture of innovation, Google employee and Chief Member Kiran Oak says, “Employees feel ownership across the company. Beyond their roles, there’s this ownership that they feel to do good in the world.”
According to a study by Rockbridge, companies that are perceived as highly innovative have increased job satisfaction rates (87% compared to 31% for companies perceived as low in innovation) along with lower attrition rates. Intrapreneurship both fuels a stronger workplace culture, as employees take more ownership of and are more engaged in their work, and also gives team members the chance to develop leadership skills that can allow them to rise more quickly to managerial roles. One study conducted by EY even finds that fostering innovation at work can boost talent recruitment, with nearly 70% of employees saying they would be willing to leave their current job for a similar role at a more innovative company.
Implementing Intrapreneurship Policies
A policy like Google’s 20% rule may not always be possible to implement at growing companies that lack the systems and financial resources the tech giant possesses. To create a more sustainable version of the policy, 150-person company MyPlanet launched a program in 2011 called “Awesome Time,” which allows employees to dedicate five percent of working time to side projects. The program is still going strong, though it has now pivoted to a token system where employees can take a minimum of five days of the year to meet with mentors and work on impact-driven side projects.
For smaller companies looking to identify intrapreneurs within their own organization, experts say internal hackathons, company-wide brainstorming sessions, or small cross-functional team meetings are also effective ways to encourage employees to develop interests and goals beyond their current role. But regardless of the way intrapreneurship policies are implemented in your organization, it’s important to have strong managerial support that embraces the risks and even mistakes that comes with building and trying something new — not just the wins.
“I like to tell my team that if we’re not making mistakes pretty regularly, we’re not pushing ourselves hard enough,” Chief Member Natalie Silverstein, Chief Innovation Officer of Collectively says. She explains that at her company, intrapreneurship is woven heavily into her executive team, with senior leaders understanding the importance of risk-taking and innovation at the top.
Intrapreneurship in the C-Suite
When Silverstein joined the influencer marketing agency nearly five years ago, her CIO role didn’t exist. But after serving in other senior leadership positions and seeing how the company was doubling down on its commitment to innovation, she co-created the role last year with her executive team. While embracing innovation has not always been a key component of the C-Suite, studies show that more and more companies are looking for leaders who can help foster this forward-thinking from the corner office. In fact, as of 2017, 29% of Fortune 500 companies had a senior innovation executive, with more than 400,000 individuals today holding this title on LinkedIn.
“We were focused on making a claim,” Silverstein says. “Frankly, if you have a Chief Innovation Officer role, that’s saying something about your organization and what you care about.”
To transition into an innovation-focused executive role, Silverstein recommends focusing on building collaborative relationships across peers in your organization, and having a deep understanding of your business across its different dimensions. So much of the role requires getting people on board with an idea and making them see the value and possibility in what you’re building, she says.
Adding an innovation officer to the C-Suite will likely require a structural change to ensure there are clearly defined operating and reporting structures for the role. Otherwise, CIOs may end up focusing on incremental process improvement initiatives rather than entirely new opportunities for growth. For an innovation department to be successful, the organization needs to “separate out the disruptive entity, protect it, and let it operate by a different set of rules than the core business,” says David Duncan, Managing Director at innovation consulting firm Innosight.
With more than half of Gen Z looking to start their own businesses today (and 14% having already done so), building strong innovation policies and supporting employees looking to pursue impact-driven projects can not only be a boon for employee retention but for future-proofing the company with the next generation innovating on its behalf.
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