Finding room for the intrepreneur - intracorporate entrepreneurship

Nation's Business, Feb, 1984 by Sharon Nelton

Finding Room For The Intrapreneur

ENTREPRENEURS are individuals, and they do not fit well in the traditional corporation. But more and more people concerned about the health of U.S. business--from academics and consultants to company chiefs--are warning that corporations must make room within their walls for entrepreneurs if the companies are to retain their vitality and even survive.

Internal enterpreneurship is seen as a means to stimulate innovation in products, services and techniques; increase productivity; and help companies hold on to some of their best and brightest employes--objectives all geared to making U.S. business more competitive on a world scale.

"A scarcity of innovation is the surest path to slackened competition, to emphasis on maintenance of effort and, finally, to inertia,' Robert R. Grohman, president and chief executive officer of Levi Strauss & Company, told an international conference of financial executives in Montreal recently.

Grohman used that forum to encourage other corporations to open their doors to in-house entrepreneurs, and he was in a good position to do so. After a profit slide at the beginning of the 1980s, his San Francisco-based company experienced a dramatic turnaround, credited in part to what one Levi's spokesman calls an "entrepreneurial mentality.' That mentality has included persistent efforts to shape a corporate culture where innovators can thrive.

Entrepreneurial spirit, at Levi's and elsewhere, manifests itself in many ways--from simple incentives, like prizes awarded to employes for good ideas, to complex efforts, such as helping launch new businesses or even totally restructuring a corporation.

Figuring out how to embrace the entrepreneur is not easy for a corporation.

"Most corporations really don't want entrepreneurs, because they rip apart the warp and woof of the organization,' says William Zucker, professor of creative management at the University of Pennsylvania's Wharton School. Another observer says that because innovators take risks, they are often branded as not being team players; if they fail, they are often fired.

If a corporation wants to be innovative, experts agree, it must learn how to manage entrepreneurs and develop new ways for them to work within the organization. Helping companies find those ways is a new breed of consultant. One is Gifford Pinchot III, grandson and namesake of a noted political figure of the early 1900s. In 1978 Pinchot, then owner of a small upstate New York ironworking business that made specialty items like fireplace equipment, attended the School for Entrepreneurs, a program at the Tarrytown Conference Center in Tarrytown, N.Y.

Robert L. Schwartz, the center's founder and a teacher at the school, suggested some areas in which money could be made in the future. "Creating an environment so people could behave more like entrepreneurs in a large company' was one, Pinchot recalls.

That seemed implausible to him, he says, and he took it as a challenge. "I went to work on it.'

An early result of that work was a long memo to Schwartz in which Pinchot began to develop some ideas about the in-house entrepreneur, calling the concept "intrapreneurship,' a word he has since trademarked. (He had kept writing "intracorporate entrepreneurship,' he explains. "After a while, you want to abbreviate it.') As Pinchot defines it, an interpreneur is simply "someone who fills the entrepreneurial role inside a large organization.'

Now an internationally acknowledged guru of intrapreneurship, Pinchot is president of Pinchot & Company, a New Haven, Conn., consulting firm devoted to helping companies like Tektronix, Westinghouse, Xerox and AT&T develop an atmosphere that will nurture intrapreneurs. In May, he will start a school for intrapreneurs at the Tarrytown center. About the same time, Harper & Row will publish his book, Intrapreneuring: Why You Don't Have To Leave the Corporation To Become an Entrepreneur.

ANOTHER SCHOOL for intrapreneurs is being put together by the ForeSight Institute, a joint venture of the Naisbitt Group in Washington (headed by John Naisbitt, author of the bestselling Megatrends) and the ForeSight Group, a Stockholm consulting firm. Some of the institute's ideas are borrowed from Pinchot, who has taught at a ForeSight Group school for intrapreneurs begun in Sweden four years ago.

Under the ForeSight plan, students participate in a six-month training period, spent partly in the classroom and partly in their home corporations. The students, who usually come to the school armed with an idea for a new product or service, develop a business plan, learn how to use resources of the corporation and obtain their first customer.

ForeSight also runs a parallel program aimed at preparing a company to accept and support the intrapreneurs it has helped create.

During training, a student's company provides him or her with a small project budget--$10,000, for example. If the project turns out to be viable, the company can decide if it wants to invest in the idea further.