Innovation in high demand
Most senior executives view innovation as a key component to business growth and market competitiveness. It can often form the basis of a core business proposition, e.g. Apple. Innovation is what distinguishes successful companies; it is the reason the tech start-up scene is disrupting many traditional business models. If there’s ever a time for organisations to innovate, it’s now.
When a company needs more innovation they have two choices; outsource or in-source. The outsourcing option is where the entrepreneur comes in. But many well-established companies are reluctant to always turn immediately to an outside source. For instance, there may be concerns that the entrepreneur’s "innovative" ideas could unleash costly wholescale business change with no guarantee of success. And, after all, the entrepreneur has an inherent appetite for risk for which a company might not share.
So then there is the in-house option. In older innovation models, top-down investment was made into key areas of research and development. Big decision makers drove everything forwards. Increasingly, however, there is widespread recognition that innovation is something to be encouraged throughout companies; from grass roots level to the very top. That’s where the intrapreneur fits in.
What makes an Intrapreneur?
Pinchot coined the term in 1978. By 1984 intrapreneurs were seen as "dreamers who do”. A more recent definition by Koch (2014) claimed that intrapreneurs are the "secret weapon" of the business world.
The distinction between entrepreneurs and intrapreneurs can be seen in the different level of focus. The intrapreneur’s role is more focussed, within the company, to solve a specific problem. With more directly applicable skills for a given task, their innovation is more at a localised level.
Innovation involves employees across the company and it requires identifying and acting on opportunities. It manifests itself in a wide variety of outcomes; from new products and services to new business models and new ways of working. Quite often the freshest ideas come from those who have more perspective within the workplace. For example, those who are working on the "front line" of operations.
Intrapreneurs are increasingly being recognised for adding value to organisations, even those led by entrepreneurs. They will take risks, but within the context of their focussed area of expertise.
Examples in the workplace - Google Intrapreneurs
It’s an approach which has been adopted by Google – a company which places a high degree of importance on internal development and innovation, both applicable to its people and its business growth strategy. At Google, if any employee approaches a senior manager with a problem, they must also come prepared with three solutions to that problem. This simple "policy" not only helps to define new innovative ways of thinking at every level throughout the organisation, but it is also empowering employees to think independently. They are contributing to key decision-making and are embedding a problem-solving culture by default.
Google was also famous for its renowned "20% time" which enabled employees to spend one day per week on side projects; a policy which became instrumental to the company’s ability to innovate. Established in 2004 when the company went public, the allocation of "20% time" led to the invention of some of Google’s most significant advances, including Gmail, AdSense, Google Talk and Google News, among others. AdSense now accounts for 25% of Google’s US$75bn annual revenue, proving that internal innovation has been fundamental to the company’s success.
While "20% time" is no longer an all-encompassing workforce policy, Google is still innovating. Google X is the secret lab which is home to the likes of the driverless car initiative, Google Glass, high-altitude Wi-Fi balloons, and glucose-monitoring contact lenses. Google X famously seeks out people who want to innovate and invent, and who won't get easily daunted. With more than 250 employees strong, the lab is filled with an idiosyncratic troupe of scientists, sculptors, philosophers, and machinists, all working on clandestine projects which are set to shape the future.
There are three criteria that X projects share. All must address a problem that affects millions—or indeed billions—of people. All must utilise a radical solution that possesses at least one component which resembles science fiction. And all must tap technologies that are now (or very nearly) obtainable.
With a major focus on technology and quality of service, Equiniti has been actively developing its innovation framework; building workable and effective processes for employees and colleagues alike.
Regarding employees, Di Penly, senior manager of innovation explains: “We are encouraging a culture of intrapreneurship within Equiniti. We are doing so by getting more individuals to collaborate and innovate in their own areas of the business. Everyone has the potential to get involved in this way of working and the response so far has been fantastic.”
Innovations – sparked by a team of intrapreneurs – can come from anyone in any part of the business. Di Penly’s team have been using Equiniti's online collaboration tool Ignite to run a number of innovation campaigns. From in-house intrapreneur through to client, ideas can be shared, explored and developed.
Individual areas can then continue to work simultaneously but with the added oversight of what other teams are working on.
One such example is the "Bright Ideas" initiative in the contact centre. This was launched to encourage employees to contribute customer process improvement ideas. In this way, Equiniti is valuing insights and ideas from the staffs’ first-hand experiences and putting these to good use.
There certainly seems to be many benefits to cultivating an intrapreneurial working environment. The creation of successful workable innovative solutions and positive staff engagement are two such positives. And, solutions will provide added value to clients; the experience of improved quality as well as cost savings shared.
In-house innovators are intrapreneurs – they are major contributors to productivity within the company and they seek to provide unique solutions to business-wide, if not industry-wide, problems. Not all companies will embrace Google’s 20/80 time ratio on innovative projects, nor will they all have the resources to do so. But, successful companies should be embedding a culture of intrapreneurship; to identify future trends to address these before competitors do.
Intrapreneurs and Financial Services
As the financial services industry is continually disrupted, innovation is a key indicator of success.
Fintech start-ups are shaking up the industry, and it very much comes down to innovation. Founded by entrepreneurs, operated by intrapreneurs, and with innovation sitting at the heart of the business model, it’s a rapidly changing environment for financial services firms.
The lines between traditional finance, technology firms and telecom companies are blurring, and with many new innovative solutions emerging, there is no straightforward solution to navigate this fintech world, especially for incumbent financial institutions.
It’s no secret that disruptive technologies such as Bitcoin, Blockchain, autotraders, robo-advisers, cardless payment apps and peer-to-peer lending platforms have all contributed to a new digital revolution for finance. Those that are reacting and adapting to the culture change by adopting intrapreneurial behaviours and pursuing innovation across their portfolio of products, services and processes will stay ahead.
Cultivating intrapreneurial workforces will bring about positive innovation at all levels of the organisation. The need to collaborate with entrepreneurs and start-ups to develop new technologies will remain. And, no doubt, both intrapreneurs and entrepreneurs will be integral to the huge culture change in financial services in the coming years.
If you'd like to know more about Equiniti's innovation programme, please contact your relationship manager.