Many people have praised the flexibility creativity risk taking, and energy that are often associated with small firms and intrapreneurship and have asked how these elements might be instilled in larger organizations. Intrapreneurship is the name given to intrapreneurial activities within a larger organization, and intrapreneurs are essentially internal entrepreneurs.
Intrapreneurs and entrepreneurs have many things in common. For instance, they value creativity and autonomy and have strong desire to achieve. On the other hand, since intraprenuers work within a corporate system, they face the benefits and constraints of that system. Unlike entrepreneurs, they operate under a corporate accounting system and must report to hierarchical superiors. They do not personally face the financial risks that entrepreneurs do, nor do they enjoy the same rewards. They can draw on the rich financial resources of the corporation.
Intrapreneurs may need different competencies to succeed than do entrepreneurs. For instance, intrapreneurs must be somewhat skilled at organizational politics, something that entrepreneurs may find reprehensible and that may, in fact, motivate them to work for themselves. Further, while entrepreneurs must provide their own goals and rewards, intrapreneurs are within the reward system of the formal organization.
Two major factors foster intrapreneurial success. First, sponsorship of intrapreneurs is important. Sponsors ensure that the intraprise gets the required resources, and they can help tamper the grievances of those who feel threatened by the innovation. Many intrapreneurs have several sponsors. Lower-level sponsors to fend off threatening strategic attacks. Second, there must be suitable rewards for intrapreneurship. Traditional rewards for success do not match the risks of innovating or intrpreneuring. Also, the basic reward in most companies is promotion, which does not work well for most intrapreneurs; they seek freedom to use their intuition, take risks, and invest the company’s money in building new businesses and launching new products and services. For this reason, a key reward for intrapreneurs is intracapital. Intracapital is a discretionary budget earned by the intrapreneur and used to fund the creation of new intra prizes and innovation for the corporation.
Hoping to grow and compete in a fast paced market, Bell Atlantic turned to intrapreneurship, with great success. Within a few years, more than 130 intrapreneurs had championed more than 100 projects, at least 15 products were on or near the market, and 15 patents had been awarded. Potential revenues estimated from the projects total a minimum of $100 million within five years. Similarly, at Xerox, many creative ideas were lost before being turned into marketable products. As a result Xerox recognized the need to merger intrapreneurs within the corporation. The company formed Xerox Technology Ventures (XTV), and a venture capital group that allows Xerox to bring creative products to the market through intrapreneurships. XTV has become so successful that it is now a role model for other firms.