The intrapreneur is an employee which is usually assigned to innovative projects that can impact the company’s future success. As such, the intrapreneur is an employee that acts like an entrepreneur within the organisation. While the intrapreneur has access to the resources of the organisation she does not bear the risks connected to it.
What is the difference between entrepreneurs and intrapreneurs?
Entrepreneurship is the process of designing, launching, and managing a new business. The individual, or entrepreneur, assumes most of the associated risks but will also reap the most rewards if the business is successful.
Intrapreneurship involves an employee developing new ideas or products within an existing company. Intrapreneurs can formulate new ideas or products without the associated risks of entrepreneurship.
The role of both entrepreneurs and intrapreneurs is to uncover new opportunities and then devise a strategy to profit from them. Both roles also require that individuals be adaptable, innovative, persistent, resilient, and effective leaders.
The primary difference is in risk-taking and ownership. Where the Intrapreneur does not own the company and does not take the financial risks associated with the project. The entrepreneur does.
That makes the entrepreneur more conservative and risk-avoidant.
And the intrapreneur is more risk-prone and, in theory, willing to take bolder steps that can make processes within organizations obsolete. Thus, looking at innovations that can impact the whole organization.
As we saw, the main difference between entrepreneurs and intrapreneurs is the level of risk that each assumes. Entrepreneurs start companies from scratch and take on extreme levels of risk to increase their individual wealth.
Since intrapreneurs operate within existing organizations, they can leverage their resources, networks, and expertise to take more calculated risks.
These individuals may pursue the same transformative ideas as entrepreneurs, but they may also be involved in incremental innovation projects and not be rewarded as handsomely if the idea pays off.
Other key differences between entrepreneur sand intrapreneurs
Entrepreneurs have the freedom to set their own vision for the company, while the objectives of an intrapreneur are influenced by their employer and its senior leaders. That is, they are less autonomous.
When an entrepreneur has a few months of lackluster sales, it may mean financial disaster. The potential ramifications for an intrapreneur as never as severe – particularly in mature organizations that can absorb failures and the associated negative financial impact.
Access to perks
While intrapreneurs may not enjoy the same freedoms or financial compensation as entrepreneurs, they are nevertheless valuable to their respective companies. Based on this, intrapreneurs can command attractive salaries and perks.
In theory, an entrepreneur can operate as long as funds allow. Intrapreneurs often work under time and resource constraints stipulated by the employer.
How does Intrapreneurship work?
Intrapreneurs get assigned to special projects that are extremely innovative.
That is also why they are usually given the freedom to pursue them, which means the intrapreneur is extremely independent within the organization.
Therefore, intrapreneurs can access resources from the organization, thus organizing and working with those resources on innovative projects.
At the same time, the financial risks associated with the project stay with the organization.
Good, in theory, what in practice?
While the concept of intrapreneurship is compelling, and perhaps many companies have leveraged it to keep innovating.
At the same time, the question remains whether the intrapreneur without skin in the game can really make an excellent contribution to the organization.
Intrapreneurship example: Google’s 20% Project
Google is one of the companies that took advantage of intrapreneurs to build wildly successful products. As Brin and Page highlighted back in 2004:
“We encourage our employees, in addition to their regular projects, to spend 20% of their time working on what they think will most benefit Google…This empowers them to be more creative and innovative. Many of our significant advances have happened in this manner.”
From this 20% project allocation, where employees could pursue the projects they felt compelled about, products like Google News, Gmail, and AdSense were built.
Other intrapreneurship examples
Here are just a few examples of intrapreneurship in modern companies.
The development of Gmail is one of the finest examples of intrapreneurship at work. The service was created by Paul Buchheit who joined Google as its twenty-third employee in 1999.
Buchheit had previously worked on a web-based email platform and search engine, but the idea of replicating this combination within Google’s email service was met with internal resistance.
Indeed, some executives were worried that the company was extending itself too far beyond its core search product.
However, co-founders Sergey Brin and Larry Page ultimately supported the project, with Buchheit using Google’s 20% time policy for personal projects to develop the Gmail platform.
History will show that when Gmail was released in April 2004, it grew rapidly to displace Hotmail and Yahoo Mail as the provider of choice. Gmail would also influence the development of Google AdSense in later years.
It may surprise some to learn that the famous Happy Meal started as somewhat of a gimmick when it was first slated in 1977.
The idea for the meal is credited to Dick Brams, former regional ad manager for the St. Louis, Missouri area.
Brams pitched the idea to senior management after witnessing that competitor Burger Chef was selling children’s meal boxes that also came with a toy.
While many believed it would never catch on, the Happy Meal became popular with McDonald’s franchise owners who desired a product that would streamline the chaotic process of ordering food for kids.
Brams is often credited as the “Father of the Happy Meal” in official McDonald’s communications, but depending on who you ask, the idea for the meal is also attributed to fellow employee Yolanda Fernandez.
She founded the first McDonald’s restaurant in Guatemala in 1974 and would add toys purchased from a local market to children’s meals.
Despite Sony’s PlayStation division earning $24.87 billion in 2021, the company was at one point disinterested in the video game industry.
In the late 1980s, however, a forward-thinking Sony engineer known as Ken Kutaragi was watching his daughter play with a Nintendo gaming console and was amazed at its potential.
Kutaragi invited his superiors to seriously consider developing a gaming console but was ultimately rebuffed.
Undeterred, the engineer surreptitiously took on a role with Nintendo to help them develop the Nintendo Entertainment System (NES).
When Sony found out, executives at the company were infuriated and their instinct was to fire Kutaragi on the spot.
In the end, Kutaragi was saved by CEO Norio Ohga who believed his idea had merit and funded a partnership with Nintendo to develop the Super Famicom (known in the West as the Super Nintendo).
Sony would eventually develop the PlayStation and, after its release in December 1994, became the first computer entertainment platform to sell over 100 million units.
Kutaragi was promoted to CEO of a new division called Sony Interactive Entertainment where he oversaw the development of the PlayStation 2 and PlayStation 3.
Successful entrepreneurs and indeed entrepreneurship culture is widely celebrated in the media and elsewhere. Successful intrapreneurs and their contributions to business, by comparison, are much less well known.
Here are some that stand out:
Whilst an employee of Sony, Kutaragi envisioned a future where electronic games were commonplace.
He ultimately convinced company leaders to create a new division where he lead the development of the Sony PlayStation.
The 23rd employee of Google was responsible for developing Gmail in 2001 and also prompted the product that would later become AdSense.
This animator was sacked from Disney because of his belief that the company should enter computer animation.
Lasseter then joined Lucasfilm where he was part of a team that pioneered CGI animation.
Once the graphics arm of Lucasfilm was sold to Apple, he oversaw the development of Pixar’s most successful films.
- Entrepreneurship is the process of designing, launching, and managing a new business from scratch. Intrapreneurship involves an employee developing new ideas or products within an existing company.
- The qualities and indeed roles of entrepreneurs and intrapreneurs are rather similar, but one of the primary differences is the level of associated risks and the extent to which each can access resources, networks, and expertise.
- The other key differences between entrepreneurship and intrapreneurship are the level of autonomy of control, the presence of safety nets and time constraints, and access to perks.
Connected Business Concepts
What is Entrepreneurship
Value Proposition Design