The global marketplace in which businesses operate today is changing. Globalization, digitalization, resource scarcity, supply chain dynamics, and market volatility are just some of the pressing issues on the radar of chief executives. A 2010 survey of CEOs by IBM highlighted that 79 percent of respondents expected a very high or high level of complexity in the next five years, and yet only 49 percent felt prepared to address it. One interpretation of this “complexity gap” is that it underscores the need for business leaders to find new ways of balancing short-term financial performance with the demands of longer-term value creation.
But there is reason to be optimistic. Intrapreneurs—those who embrace the characteristics of entrepreneurs but work within large organizations—are addressing complexity by serving as internal change agents. They are developing the strategies, products, services, processes, and business models to help companies solve short- and long-term issues. We set out to interview the most successful intrapreneurs in the business world, to understand how these people work. What we found is that to embed the kind of change needed to tackle the complexity gap, companies are making progress—but not through one or two charismatic individuals. Rather progress is resulting from the best and the brightest people working together.
We all know that building strong teams is a good idea in any business environment. When managed well, teams capitalize on the unique experiences of different individuals and provide a breeding ground for new ideas. Teams can ensure that energy levels and momentum stay high. When people work in teams, they have a better chance of finding the right balance between a vision of change and the operational prowess needed to deliver on that vision. It is rare to find a person who can hold these conflicting trajectories in sync, which is why working in groups with people of different skills—some strategic, some delivery focused—can facilitate change faster.
Sadly, there is no instruction booklet on how to build an intrapreneurial team. From our interviews, however, we identified a few factors that can enable a group to work together on complex intrapreneurial ventures.
The first factor is the composition of the team. Should it depend solely on internal team members? Or should the emphasis be on bringing external expertise to the challenge? The second factor that enables a strong team is its structure. How is it governed? Does it take cues from top-down direction or bottom-up intelligence—or both? Is it managed centrally in a single office, or does it operate through decentralized online networks? The third enabling factor is what motivates these teams. Are there incentives the group values, social or otherwise? Below we explore these enablers through five examples of successful intrapreneurship.
Intrapreneurship at Work
At Hewlett-Packard (HP), a board-level discussion in 2009 set the wheels in motion to transform the company’s social impact strategy from a traditional CSR model to a social innovation model. In 2011, environmental sustainability was integrated into that strategic mission. HP’s current Sustainability and Social Innovation (SSI) group is a small global team of full-time employees that enlists volunteers throughout the company to serve on its larger virtual team. By design, SSI partners with a range of public and private organizations in the areas of health, education, and the environment. Among its innovative partnerships, SSI works closely with Mothers2Mothers, an NGO devoted to improving the health of mothers living with HIV and eliminating pediatric AIDS.
Paul Ellingstad, director of partner and program development in the SSI group, uses what he calls the “MacGyver” approach—a way of being extremely innovative but also pragmatic and resourceful when developing solutions. Yet Ellingstad concedes that the need for speed and results is tempered by the importance of developing sustainable solutions that can be scaled up. There are rarely any “quick fixes,” he says, and the collaboration necessary for long-term success requires careful management. In the partnership with Mothers2Mothers, HP has tapped into a range of internal talent and resources to improve the NGO’s systems and processes. And what gets busy people at HP fired up to work with Mothers2Mothers? Not surprisingly, it is the opportunity to have a positive impact on the world and the satisfaction of tackling challenging problems in innovative and collaborative ways.
Nike is another high-energy company where intrapreneurship is part of the culture. Hannah Jones, vice president of Nike’s Sustainable Business & Innovation (SB&I) unit, has spent the last four years developing an effective team to activate system-level change. Her team doesn’t just focus on sustainability projects, it embeds sustainability into Nike’s overall strategy inside and outside the company.
But getting people from different backgrounds to work together can be a challenge, so Jones has put the right incentives in place. These incentives are not just about financial rewards; they build a sense of purpose and belonging. The SB&I team regularly stress-test new ideas that connect to their sustainability agenda. Openness and candid debate are crucial enablers for the team to achieve their goal of creating value for their business and innovating for a better world. The SB&I unit helped develop a road map for how Nike, in collaboration with other apparel companies, could move toward zero discharge of hazardous chemicals in its supply chain by 2020. This ambitious plan sets a new standard of environmental performance in the industry and was made possible by bringing together a wide range of skills and expertise—including chemists and supply chain and communications specialists—to address the system-level challenge.
Another example of intrapreneurship: Over the last decade, Royal DSM CEO Feike Sijbesma has taken a 110-year-old company and its 22,000 employees on a transformative journey. What started out as a small Dutch coal mining business is now a global life and materials science company with annual net sales of approximately 9 billion euros. Feike’s motivation for building an intrapreneurial team? “I have two young sons,” he said. “And I started thinking what I would tell them about what I had done with my life. I realized I did not want my only story to be that I increased the value of the company’s stock. And I know my colleagues felt the same.” Under Sijbesma, Royal DSM decided to embark on a radical culture and portfolio change focusing on the triple bottom line of people, planet, and profit.
To kick-start this transformation, Feike kept it internal (no outside consultants were brought in) and created conditions for the internal teams to own the process. Although top-down driven at first, the transformation now is focused more on bottom-up processes in which all departments of the company focus on developing products that improve the lives of people and the planet. Feike had to convince his shareholders of the financial sense of this new approach. And they have not been disappointed: The company’s reputation and returns have grown. Among Feike’s actions was to divest 50 percent of Royal DSM’s portfolio of products that were not compatible with its sustainability mission. It did this while achieving a significant increase in the value of its stock on the Amsterdam Stock Exchange. Social intrapreneurial teams were the fuel that delivered both social and financial rewards.
Another example is M-PESA, an immensely successful enterprise that provides mobile banking solutions in Kenya and Tanzania. What many people don’t know is that the early concept was incubated within Vodafone. Nick Hughes, head of Vodafone’s International Mobile Payment Solutions, and his team were committed to improving mobile telephony solutions for Africans. In doing so, they accidentally developed the disruptive innovation that transformed banking for the poor in Kenya. When they realized the potential of their innovation, they sought support within the company to pursue further development, but they met with resistance. So they turned to external sources of funding. By winning an African Enterprise Challenge Fund grant from the UK Department for International Development, Hughes’s team achieved the flexibility it needed to prove the model within Vodafone and protect it in its most vulnerable stages.
The diversity of skills in the M-PESA team and the shared passion for finding a workable solution enabled branchless banking to materialize. Some members of the team were based in the United Kingdom and others in Kenya, allowing the bi-continental colleagues to run pilot projects and react quickly to feedback from customers to improve the product. This feedback loop became an incentive for the team to keeping pushing—for they saw customers using the product and could witness improvements to customers’ lives because of it.
Our last example is from Novartis, a multinational pharmaceutical company and major player in global health care. A few years ago, Dorje Mundle, global head of Corporate Citizenship, recognized that developing approaches to serving clients in BOP countries put Novartis out of its comfort zone. In 2011, he launched a company-wide team to address this challenge, building a leadership development program in which senior executives took virtual workshops and then embarked on a full month working in an emerging market with local stakeholders on important health challenges. The goal is for senior executives to cultivate their social intrapreneurial skills to prepare the company to succeed in important new markets. The program so far has stimulated much enthusiasm.
We see that the complex issues faced by companies today are sector agnostic. The issues of market access and growth in the short term and sustainability in the long term are similar across pharmaceutical, consumer goods, technology, and chemical industries. We believe that what will differentiate companies is the ability to deploy intrapreneurial teams to respond effectively to this complexity and to steer the business through the turbulent times ahead.