3 – Entrepreneur v/s Intrapreneur

Introduction

According to the concept of intrapreneurship, managers within the organisation should be encouraged to be entrepreneurs within the company rather than going outside. For an entrepreneur to succeed in a company, he or she must be sponsored and allowed sufficient flexibility to develop his or her ideas. Otherwise, the entrepreneur’s zeal will be extinguished. The entrepreneur who establishes his own company usually does so because he wants to be in charge of his show and dislikes taking directions from others.

A strong and healthy risk-taking culture is required in large bureaucratic organisations, with risk-taking management assured of security and rewards. An entrepreneurial culture requires a steady flow of new ideas. It requires managers who are prepared to listen to and respond to new ideas and a system that rewards managers who may fail but have developed and tested new ideas.

You’ll find an entrepreneur if you look into any significant innovation in a company.

“Any great business or invention of just about any significant corporation was founded by an intrapreneur,” says Gifford Pinchot, who coined the phrase and popularised it in his book Intrapreneuring.

Though Pinchot coined the word, forward-thinking organisations have depended on the concept (of internal entrepreneurial initiatives in an organisation to change the status quo, harness the energies of brilliant people, and sponsor promising ideas and breakthroughs) for decades.

3.1 The Process of Starting a Business

• At its most basic level, what entrepreneurs do can be described as a six-step process:
• They notice opportunities that others do not.
• They have a ‘vision,’ an explicit knowledge of the concept and what they want to accomplish.
• They can persuade people of their point of view and successfully express the concept.
• They amass resources to realise their goal (money, people, things).
• They combine these resources to start a new business, product, or market (leadership, teams).
• They are continually altering and adapting to the market’s changing expectations.

3.1.1 Recognize a Possibility

Timmons (1989) states entrepreneurship is about recognising an opportunity where others see disorder, contradiction, and confusion.

Identifying a business opportunity is the first step toward establishing and running a profitable company. Where others see difficulties and impossibility, entrepreneurs see opportunity. Identifying opportunities at the proper time is critical since it gives a business the “first mover’s advantage” and puts it ahead of competitors who take their time to catch up. The advantage of being first to market provides product identity and market credibility, better earnings, and faster economies of scale.

For example, Paul Scagnetti, an Intel engineer, came up with the idea for a handheld computer that would allow people to do only one thing: track and manage their fitness and nutrition. The gizmo ‘Vivovic Fitness Planner’ was a smash on the market.

Entrepreneurs perceive chances because they are innovative, open to new ideas, and seek challenges even when things work smoothly. [Like Kushagra Bajaj of Bajaj’s Hindustan, who returned from the United States in 2000 with a master’s degree in management, saw a lucrative opportunity in India’s sugar sector.] Sugar demand was increasing, and 100 of 553 mills in the industry were declared sick. He saw this difficulty as an opportunity and rose to the top of Bajaj Hindustan in 2005, becoming India’s sugar sector leader in the process].

3.1.2 Create a Vision

Simply looking for possibilities isn’t enough; an entrepreneur must also have a vision for the future that can only be realized if opportunities are seized at the proper time. He is utterly confident in his vision, which is crystal apparent to him, i.e., he can see himself as optimistic. He would adjust his vision to keep his dream viable and fruitful, even if market forces changed. Believe it or not, entrepreneurs have enormous dreams, which others may dismiss as unrealistic.

Steve Jobs and a group of 20 young engineers produced the Macintosh Computer without any adult supervision.

Reliance Industries’ Dhirubhai Ambani dreamed of putting a phone in everyone’s hands, and the rest is history. [We all know that nowadays, even vegetable merchants, farmers, milkmen, and gardeners have cell phones.] In a poor country like India, dreaming this big requires a lot of courage.

3.1.3 Convince Others

An entrepreneur does not work alone; he recognises that a successful business requires various skills. This stage of the entrepreneurial process is referred to as “building the foundation team” by Kathleen Alen, an American academic. i.e., an entrepreneur assembles a team of people who will collaborate to actualize his vision. An entrepreneur creates a business plan to help ‘the others on the team understand the goal and its methods. These folks include professional workers, funders, and even family members who believe in the entrepreneur. Narayan Murthy of Infosys, for example, had financial and psychological support from his wife and was joined by a group of friends who helped him build Infosys into what it is today. Infosys still employs these trustworthy individuals and continues collaborating with the company to ensure its future success.

3.1.4 Collect Resources

Identifying a business opportunity, forming a vision, and getting others to join isn’t enough; a company needs resources to succeed. This is the stage where an entrepreneur’s dream can become a reality. Even though we are presenting this process step by step, assuming that resource issues are taken into account, the reality is that part of the early appraisal of the concept will invariably include a preliminary assessment of whether it can be appropriately resourced.

There are four types of resources to consider:

• Financial
• Operating
• Human
• Information

3.1.5 Start a new business

After the entrepreneur has secured the abovementioned resources, the next step is to create/establish a new venture and successfully run it. In contrast, the former task (creating a new venture) necessitates great enthusiasm and persuasion to secure the best resources possible. The latter duty (operating a business enterprise) necessitates much tenacity and self-confidence.

3.1.6 Change/Adapt as Time Passes

Because change is the name of the game in today’s business world, the entrepreneur must keep his or her company updated and up to date at all times. This is a challenging undertaking since it requires not only the availability of cash to implement change but also (and maybe more importantly) the adaptability of human resources to the altered environment.

3.2 Intrapreneurship

During the 1970s, the word “intrapreneur” was coined. Because the top managers in these firms were not receptive to fresh ideas, several senior executives of prominent corporations left their positions to start their modest businesses. These executives-turned-entrepreneurs were a massive success in their new businesses, posing a threat to the companies they had previously worked for. The term “intrapreneur” was coined to describe these types of entrepreneurs. This type of brain drain isn’t just happening in the United States but worldwide. As a result, businesses have devised strategies to stem the flow of talent, expertise, and innovation.

According to intrapreneurship, managers should be encouraged to be entrepreneurs within the company rather than going outside. For an entrepreneur to succeed in a company, he or she must be sponsored and allowed sufficient flexibility to develop his or her ideas. Otherwise, the entrepreneur’s zeal will be extinguished. The entrepreneur who establishes his own company usually does so because he wants to be in charge of his show and dislikes taking directions from others.

A strong and healthy risk-taking culture is required in large bureaucratic organisations, with risk-taking management assured of security and rewards. An entrepreneurial culture requires a steady flow of new ideas. It requires managers who are prepared to listen to and respond to new ideas and a system that rewards managers who may fail but have developed and tested new ideas.

3.2.1 Definition of Intrapreneurship

Intrapreneurship is defined as entrepreneurial efforts with organisational sanction and resource commitments only to achieve innovative results. Intrapreneurship strives to encourage the entrepreneurial spirit within the confines of the firm, so providing a conducive atmosphere for growth.

A person who works for a large organisation and is directly responsible for turning an idea into a successful finished product by assertive risk-taking and innovation is known as an in-tra-pre-neur.

“Intrapreneurship is the activity of entrepreneurship by persons who work for established companies.”

Intrapreneurship is reorganising and resurrecting a company’s ability to create innovative skills and new ideas. It isn’t just about generating new ideas but also implementing them.

3.2.2 Intrapreneur Characteristics

Intrapreneurs have the following characteristics:

1. Intrapreneurs serve as a link between inventors and executives. They transform fresh concepts into lucrative realities.
2. They have a vision and the willpower to make it a reality.
3. They can predict what commercial opportunities will arise due to how customers react to their ideas.
4. They can plan the steps required to bring the idea to fruition.
5. They strongly desire to succeed and are willing to take calculated risks.
6. They are so focused on their profession that they ignore everything else, even their personal lives.

3.2.3 Reasons for Embracing Intrapreneurs in the Workplace

The following are some possible motivations for promoting intrapreneurs in the workplace:

Intrapreneurs flourish and vibrate in all types of businesses (large and small): Because the top management in these organisations was not open to their new ideas, several executives with extensive corporate experience and competence left their positions to start their small businesses. These executives labelled ‘entrepreneurs’ experienced tremendous success in their new companies, posing a challenge to the corporations they had left. As a response, businesses began creating strategies to stem the outflow of talent, expertise, and creativity, resulting in the emergence of intrapreneurs.

Because of their knowledge and extensive experience in the organisation, intrapreneurs understand the demands and wants of customers. They come up with new ideas based on these goals and needs. Intrapreneurs have an insatiable desire to achieve and succeed, so they don’t simply focus on developing these new ideas. They are eager to see their ideas turn into a successful business. With their wide-open eyes, venture capitalists welcome them with open arms. As a result, the company loses valuable knowledge and talent and develops competitors.

3.2.4 Intrapreneurs as Change Agents and Dreamers

“Dreamers who do” are intrapreneurs. People are classified as dreamers or doers in most companies. In most cases, both skills are not necessary in the same profession. But the problem with telling doers they don’t have to worry about their dreams is that they do. When they cannot put their ideas on how to help your firm into action, they dream of vengeance. A mind’s purpose is to imagine and then act. Separating the dreamer from the doer is a bad thing to do.

Entrepreneurs who are intrapreneurs conduct their market research. If your scientists and engineers cannot perform their market research, you have a big hurdle to innovation.

Intrapreneurs ponder, “Who would I need to assist me with this?” How much would it set you back? “What needs to happen first?” as well as others. “Could we release this technology Out into the marketplace in the shape of a product focused on such-and-such a client need?” they might wonder. No. If we did that, it would immediately – bite into a significant market of one of our competitors who have the power to respond, and there would be an essential competitive response before we produced our second-generation products.

Change Agents are the most authentic CEOs. They are progressive and innovative, intolerant of complacency, and constantly working to improve the organisation. Change agents are highly dedicated to improving core competencies and organisational capability. They instil a sense of urgency in all employees, both below and above their level of authority, to perform better. Most significantly, change agents are the industry’s or organisations’ “good conscience”; their management decisions protect people.

Change agents work for better management environments by confronting everyone in the hierarchy, both below and above them. Because they understand how ideas or management decisions are fashioned into effective processes, trustworthy agents will have a communication system where unpleasant topics are posed and explored. Change agents boost expectations by attempting to hire people who are more capable than themselves. Change agents are unyielding in their pursuit of excellence. Great leaders have supported the hiring of the best to be the best.

3.3 Entrepreneurial and Intrapreneurial Similarities and Economic Differences

There is an entrepreneurial spirit within an organisation. By acting within the organisational context, an intrapreneur focuses on innovation and creativity and develops a dream or an idea into a lucrative company. As a result, intrapreneurs are entrepreneurs who work for themselves.

Entrepreneurs are society’s builders and wielders of power. Many developing countries credit their success to entrepreneurs who, despite their comfort working in a firm, took the risk of starting their own business to provide jobs for others and aid the country. Regardless of our economy’s fate, some individuals in India still pursue their business interests, assist fledgling entrepreneurs, and inspire adolescents to become entrepreneurs.

The practice of entrepreneurial skills and techniques by or within a corporation or at home is known as intrapreneurship. Employees working on a unique project within a larger company are expected to act like entrepreneurs, although having access to the larger company’s resources and capabilities. In otherwise static businesses, capturing a little of the dynamic nature of entrepreneurial management (testing things until they work, learning from failures, attempting to conserve resources, etc.) is highly helpful.

This is why a founder’s behaviour differs from that of his or her successor. The entrepreneurial spirit is minimal or non-existent because everything is spoon-fed to those successors in a thriving business, unlike the founders, who faced challenges and disagreements.

3.3.1 Economic Disparities

The distinction between an entrepreneur and an intrapreneur is that an entrepreneur starts a firm, whereas an intrapreneur develops a new product for an existing company.

The simplest and most applicable definition of an entrepreneur is someone who perceives possibilities and arranges resources to take advantage of those opportunities.

For example, boardroom meetings become tense when a company’s growth slows and finger-pointing ensues.

3.3.2 Intrapreneurial vs. Corporate Culture

The sum of a company’s values, conventions, traditions, and meanings is referred to as corporate culture. Because it represents the goal of the company’s founders, corporate culture is sometimes called “the character of an organisation.” The principles of a corporate culture influence the ethical standards within a firm and managerial behaviour.

Intrapreneurship is a technique for boosting innovation by maximising entrepreneurial potential within an organisation. When adequately promoted and channelled, intrapreneurship stimulates creativity and assists employees with good ideas to better channel a corporation’s resources to generate more successful products.

Some of the most successful corporate leaders of the last century began their careers as intrapreneurs. Jack Welch, the former chairman of General Electric, created a name for himself by expanding GE’s plastic engineering business as if it were his own. Former 3M Chairman Lew Lehr built his career on his intrapreneurial pursuit of the company’s expansion into the healthcare market.

It is critical to create an elevating and encouraging environment that allows creative and entrepreneurial-minded people to innovate while providing them with the tools they need to bring their ideas to market quickly. Innovation and speed-to-market are two ways for small-to-midsize businesses to compete successfully against large, well-established corporations. Intrapreneurial imperatives include creating, nurturing, and maintaining the ideal environment.

3.4 Distinction: Entrepreneur vs. Intrapreneur