Intrapreneur: Meaning, Characteristics, Differences with Entrepreneur

Who’s it: An intrapreneur, or internal entrepreneur, is an entrepreneur who works within an organization. They are company employees but think and act like entrepreneurs. They are independent, proactive, creative, and generate new ideas and innovations for the companies they work for.

Just like entrepreneurs, intrapreneurs take direct responsibility and risk in generating business ideas and commercializing them. However, intrapreneurs don’t take all the risks like entrepreneurs.

The final risk lies with the company where the intrapreneur works. They may simply miss out on opportunities for promotion and lose careers if their initiatives fail. But, if successful, the company may appoint them as leaders in the newly formed business unit. And, for the company, a new business unit can add to its revenue stream.

Why is intrapreneurship important?

There are several reasons why growing intrapreneurship is strategic for companies. Here are three reasons:

Generate new revenue stream
Encouraging motivation within the company
Sustaining competitive advantage

New growth engine

Intrapreneurs introduce ideas – whether a new product or business – which can be a new revenue stream for their company. Thus, the company diversifies and grows revenue.

It is highly strategic in internal growth strategy. Companies depend on internal entrepreneurship to pursue new projects.

Motivation

Some employees may be excited about new ideas. They offer a new perspective on something they think is a problem. And they are trying to change the status quo.

And encouraging their entrepreneurship is one way to motivate them. They have the opportunity to experiment and innovate to put their thoughts into a potential new product or innovation.

On the other hand, without getting such opportunities, they are bored and fed up with their routine work. Eventually, they will leave the company to escape the stress and pursue careers elsewhere to realize their passion.

Competitive advantage

The business environment is constantly changing, related to market demand, the economy, technology, and competition. Therefore, it requires innovation and new ideas to adapt to such a dynamic environment.

Thus, cultivating entrepreneurship is a solution to adapt to a changing business environment and always be ahead of competitors. If successful, the company can sustain its competitive advantage.

What are the characteristics of intrapreneurs?

Entrepreneurs and intrapreneurs share several things in common. Both have a strong drive to innovate. Both are also happy to challenge the status quo to provide better solutions to the problems they encounter.

Risk-taker. Intrapreneurs are willing to take risks to bring about change to the status quo. They are and try to provide solutions to problems through their ideas. Losing a career is a major risk if their initiative fails.
Innovative. The intrapreneurship spirit is usually creative in solving problems, likes to try new and better things, and sees problems as opportunities to be solved.
Commitment. Internal entrepreneurs are responsible for finishing what they start and don’t give up. They are eager to put a lot of effort, time, and energy into making their ideas work.
Leadership. Intrapreneurship requires strong and effective leadership skills. Emotional intelligence is another vital aspect needed to motivate the team to work towards the same goal.
Good strategist. Intrapreneurs know what they need to realize a business idea, including selecting a team and organizing resources.

How does intrapreneurship work?

Some companies often encourage intrapreneurship among their employees. It can foster a culture of innovation, which can be their core competency to build competitive advantage.

Intrapreneurship is increasingly strategic when companies prefer to take internal growth strategies rather than external ones. Because by thinking like an entrepreneur, intrapreneurs will look for business opportunities to grow the company.

Who can become an intrapreneur? They can be anyone in the company. They work within the company to develop new ideas and products within the company’s internal policies. And they apply entrepreneurial skills to the roles they have in the company.

For example, a company authorizes an employee to undertake independent entrepreneurial initiatives. He manages a project to realize an idea he proposes to management. To run it, he needed resources, including a team, and the company facilitated that. Then, if successfully commercialized, the project can become a separate business unit or subsidiary. He may be appointed to lead a subsidiary.

Big companies like Sony, Facebook, and Lockheed Martin rely on entrepreneurship to grow their businesses. Another giant company is Google. They encourage and fund intrapreneurs to create and oversee projects of their own choice.

For example, Google introduced a “20% time policy“. The company encourages employees not to spend all their time just doing routine tasks. However, the company encourages them to spend at least 20 percent of their work exploring new ideas and discoveries. Google Chrome example results.

What is the difference between an entrepreneur and an intrapreneur?

Intrapreneurs differ from entrepreneurs because they:

Work as a company employee. Meanwhile, entrepreneurs are independent outside the organization.
Provide solutions by engaging in product innovation and possibly process innovation to generate value for the company. Entrepreneurs provide solutions by offering goods and services to satisfy consumer needs and wants.
Take a minimal risk. Meanwhile, the entrepreneur bears all risks, including business failure and possible loss of the initial invested capital.
Receive compensation such as salary and benefits. If successful, they may be promoted or appointed as a leader in a new business unit. But that doesn’t apply to entrepreneurs. They get compensated only if their business makes a profit. If the business fails, they lose money.
Bound by company regulations and policies because of working in the company. Meanwhile, entrepreneurs are free and independent. They are not bound by the rules and policies of any organization.
Supported by the resources provided by the company. But, entrepreneurs gather and organize resources by themselves. They also submit business proposals and plans to investors to raise capital to finance operations.
Provide benefits for the company. The business idea can add new revenue streams or maintain its competitive advantage. Meanwhile, entrepreneurs earn profits for themselves.
Generate innovation for internal or external customers. In contrast, entrepreneurs start a business to sell products to other people.

But, intrapreneurs and entrepreneurs share something in common.

Taking risks to commercialize a business idea. Both use their entrepreneurial skills in business to innovate.
Take the lead in promoting innovation and new ideas. Both often challenge the status quo and seek to provide solutions to problems.
Trying to make a profit. Intrapreneurs contribute to the competitive advantage and profits of the companies they work for. Meanwhile, entrepreneurs make a profit for themselves.
Have control over the project for the business idea they are working on. Entrepreneurs have full control, while intrapreneurs can have full control or not, depending on the company’s policies where they work.

Intrapreneur: Meaning, Characteristics, Differences with Entrepreneur