Intrapreneurship

Author: Robert V. Adams
Internal support crucial to successful enterprise

When thinking about entrepreneurs, the image that may first come to mind is that of an individual or group of individuals who invent something or turn a dream into a profitable business. I think of that as “American Dream” entrepreneurship. The ability for individuals to turn their dreams into successful businesses is one of the building blocks of our economic system and makes the U.S. unique. However, for successful businesses, entrepreneurship does not and indeed cannot end with the initial invention or dream.

For companies to remain viable and keep pace with change, the same process must continue internally, often radically and always rapidly because of the scarcity of capital and with little historical information to go on. The term “intrapreneurship” was coined about 25 years ago, but the practice of setting up internal organizations to foster innovation within a larger company goes back decades. Skunk Works (currently trademarked by Lockheed Martin) is a term Lockheed used in 1943 to describe a group given a high degree of autonomy to work on secret projects. Many companies have set up similar groups to either help generate new innovations or to move “back burner” research and development projects to the marketplace.

Robert V. Adams

I have been fortunate to be involved in both types of startup businesses at Xerox. In the 1970s Xerox research had come up with a new way to print information coming from a computer at high speed. Because of the unproven technology and the fact that the business might not easily fit into the Xerox system, attempting to bring this successful research project into the marketplace was a high risk. This tiny new business had to be protected from the operating costs of the large company design and manufacturing process. The result, the Xerox high speed laser printer and a second product, the high speed laser copier, became extremely successful. By the time they reached over $6B in annual revenue, each was successfully woven back into the main Xerox system. Without the latitude to operate independently it is unlikely that they would have been successful. In these cases, Xerox was the only financial investor. At Xerox Technology Ventures (XTV), we did some of each.

XTV was formed in 1989 to take advantage of technologies Xerox had developed over the years to identify and promote ideas, technologies, and businesses that had potential but fell outside of the strategy or mainstream business of Xerox. These included electronic publishing and document processing; software; computer peripherals; electronic imaging and scanning; and distribution, services, and supplies. In addition to identifying spinouts and joint ventures from Xerox R&D, we did a series of entrepreneurial startups with other outside investors providing some of the financial investment. During its 10-year planned life, XTV returned Xerox’s investment tenfold and at the peak of its activity, there were 11 companies with two as IPOs forming public companies.

To be actively involved with the intrapreneurial activities of an existing large business and helping to take a product or service from an idea to a deliverable product or service is every bit as exciting and fulfilling as entrepreneurship. The same technical and intellectual skill sets are required, and personal risks are similar.

The biggest difference between intrapreneurship and entrepreneurship, in my view, is that the intrapreneur would have some upfront funding from the parent company and may be able to draw on marketing and sales expertise from within the parent (when it is requested). But in both types of processes to bring new businesses into creation, success was dependent on small, highly motivated, highly competent, highly flexible, highly compatible, independent teams, and that is what made these startups successful.