Lessons learned in innovation and intrapreneurship

Businesses were so complacent in the pre-COVID days that innovation was something done only when absolutely necessary. Most companies resisted innovation as it usually entailed large investments and required management to step out of their comfort zones. Innovation is always expensive and hard.

Only when businesses are desperate do they actively pursue innovation. We faced that desperation two years ago when a competitor entered the market with a new concept and grabbed market share from us. The threat of competition forced us to rethink our entire business model and compelled us to strengthen the areas where we were less competitive.

The pandemic accelerated the need for top to bottom innovation. Overnight, customer preferences reverted to the bare basics, concerns over hygiene became more important than price, government regulations turned more stringent, and channels of sales shifted from brick and mortar stores to online platforms. And because consumer demand weakened drastically, organizations needed to down-size and restructure.

In one fell swoop, business conditions took a 180 degree turn and companies had to figure out how to make their products align with the needs of customers today and how to make their services stay relevant. Our company was not exempt from the COVID-19 tidal wave. As most of my readers know, one of my businesses is a restaurant group and it was severely affected by the pandemic. It reached a point where the very survival of our business depended on how fast we could innovate and adapt to the new normal.

As the chairman of the company, I needed to ignite a culture of innovation within our organization — and there was no time to waste. Everyone had to participate in the effort. It was then that I decided to launch our own intrapreneurship program.

Champions of innovation within an existing organization are known as “intrapreneurs.” They are employees who think like entrepreneurs but work in an established organization rather than on their own. For them to thrive, they must be given the time and freedom to develop their projects as an entrepreneur would. They should also be given the liberty to leverage the company’s resources for testing their ideas.

Developing intrapreneurs requires a change in paradigm. See, most corporations, like ours, train their employees to follow rules, to be team players and to conform to standard procedures. Non-conformists are frowned upon and deemed not a match to the company culture. To create an environment conducive to innovation, we needed to change the people’s mindsets and encourage employees to question the status quo.

Promoting intrapreneurship is a way of unlocking the wealth of ideas among employees that otherwise remain untapped. On the employee’s side, it makes them feel empowered and trusted. It helps boost morale and retention. It is a win-win situation.

I knew I was treading a slippery slope when I first embarked on an intrapreneurship program. Done carelessly, the change in mindset could confuse our employees and/or drive them to act recklessly. This is why I was very deliberate from the get go as should anyone doing the same. Let me share some of the best practices that worked for us.

A safe environment. We made it a point to assure our employees that it is safe to think outside the box and challenge the norm. No one will be judged or castigated for it.

Transparency is key. We purposely conveyed our intent to break apart the present systems and spelled out the reasons why we needed to do so. We made sure that our employees understood the rationale of the program as well as our goals and desired outcomes.

Setting directions and parameters. New ideas are great, but we made it clear that our employees should focus their time and energies on ideas that enhanced the company’s core business. Our senior managers sat down with our intrapreneurial teams and discussed our problems and what needed to be solved. We described the types of ideas, solutions and changes we were looking for. This gave our people the direction and the baseline with which to work.

Work in teams. Intrapreneurs work best in teams, this is why we formed innovation clusters based on the complementary skill-sets of each member.

Islands of Freedom. The teams were given islands of freedom and the resources to conduct experiments to test their ideas. They were set free and not micro managed. Note, we realized that too much freedom could be dangerous. Since intrapreneurs do not own the resources they are working with, the likelihood of them being careless with it was high. This is why we instilled a sense of urgency among the teams to fix problems, large or small, before they escalate. The teams were made accountable for mistakes borne out of carelessness.

Competition is good. Like entrepreneurs, intrapreneurial employees need healthy competition to get motivated and do the best job they can. Thus, we made the teams compete with each other. We made it clear, however, that the success of one team is intertwined with the success of the entire organization.

Reward and remunerate. In any intrapreneurial program, the company will end up owning the intellectual property rights for all innovations or inventions. Similarly, the company has all the rights to the profits derived from the intrapreneur’s work. That said, we made a commitment to give both recognition and financial recognition to those whose ideas were implemented.

Our intrapreneurship program was a success. After three months, we were able to roll-out new menus for our restaurants, reposition our concepts to attract new customers, expand to an online platform and work with fewer staff on the back of more efficient systems. Although the pandemic is far from over, we are in a better position to see it through to the end than we were six months ago. We literally innovated our way out of the COVID-19 crisis and I believe we are a stronger company for it.

Establishing an intrapreneurship program to find creative solutions to complex problems is a powerful management tool which I highly recommend.

Andrew J. Masigan is an economist