The challenge of unlocking innovation from within starts, first, with rethinking a significant misunderstanding we commonly hold about what it takes to be an intrapreneur.
It’s tempting to imagine, watching Mark Zuckerberg stride out on stage in jeans and gray T-shirt, or Jeff Bezos with his clean-shaved head and shades, that top innovators have a certain style about them, and that how they look is an outward manifestation of inner qualities, some sort of clue to success.
Relax. You don’t have to start wearing hoodies and ripped jeans. To succeed as an internal innovator, you do not need to look, speak, or act like an entrepreneur. In fact, doing so is quite likely to put you on the wrong track. Some of the qualities that make entrepreneurs successful may actually work to the detriment of internal innovators.
Internal Innovation Is Not the Same as Entrepreneurism
Don’t make the mistake of thinking that internal innovators are just like entrepreneurs except they’re still drawing a paycheck from someone else. The challenge that they face—that you will face—is different, in quite significant ways.
- You have two jobs, not one. In all likelihood you will have to maintain ongoing management activities while simultaneously pursuing something new.
- You have one investor, not 40. Entrepreneurs typically pitch their ideas to 40 or more investors before finding a funder that fits the idea. You have just one funder—your employer—and must find the idea that fits that funder. This means you need to invest a lot of time understanding what kind of ideas your employer will support, sort through them for the best option, and get your pitch just right. To say this another way: While entrepreneurs seek supporters for their ideas, internal innovators seek ideas for their supporters.
- While entrepreneurs often lead the effort from the moment of conception to realization as a profitable business, internal innovators are rarely involved from start to finish. More often they advance the effort, and then pass off responsibility. Entrepreneurs run a marathon; you will probably run one leg of a relay race and then pass the baton.
- While entrepreneurs launch ideas quickly but struggle to scale, internal innovators struggle to launch but can scale with speed. Getting an idea approved takes more work from within a large organization, but once you get it going, you can grow it far more quickly.
So, what can we say instead about internal innovators and about the qualities that make them successful? Two questions to explore: Is there a pattern to how they work? Are there personal attributes they all share?
The Core Process
As to the first question: There is a core process that defines the internal innovator. It starts with the notion, validated by research, that first and foremost they are people who seize opportunities. They do so by doing four things well (see Figure 2.1).
1) They discover new opportunities.
2) They evaluate and choose which opportunities to exploit.
3) They take autonomous action to move on those opportunities.
4) They mobilize resources while operating within a dispersed environment; that is, they are able to find the capital and talents needed to pursue an opportunity and rally those resources even if they do not have direct influence over their course.
In my upcoming book, Change the World Without Quitting Your Job, you will see those four process elements play out over and over. As we examine exactly what steps you need to take to bring your innovative idea to reality, and as we learn the stories of successful innovators in many industries, you will see that every one of them rests on the foundation of that core process.
But there is a more fundamental question we need to consider: What kind of person does it take to do those four things well? What are successful innovators like, and can their qualities be learned and emulated?
Six Vital Attributes
It’s easy to understand this frequent blurring of the lines between entrepreneurs and internal innovators. They do in fact have some things in common. But they are different in more, and more important, ways.
Traditional entrepreneurs are distinguished by three critical attributes:
- Innovativeness: the practice of exploring novel approaches and solutions rather than following accepted ways of doing things
- Market awareness: awareness of the external environment (competitors, customers, and industry) combined with a drive to help the company win
- Proactivity: a propensity to act before one is told to act, to “lean in,” to act autonomously
In simpler terms, we can say they are innovative, competitive, and proactive. Does that sound like anyone you know?
It probably comes as no surprise that research shows internal innovators share those three qualities as well. But it’s interesting that the same body of research shows they also exhibit three other characteristics that differentiate them entrepreneurs and make them uniquely qualified them to take on the challenge.
- Strategic approach to risk
- Political acumen
To bolster your chances of success, you need to consider carefully the extent to which you embrace these characteristics.
Common public perception is that innovators are unabashed risk seekers. In pursuit of something new, they’re quite willing to risk capital, career, or both. This perception is not wrong. It has been well established that, on average, entrepreneurs have a much higher risk tolerance. Elon Musk, after selling PayPal, invested nearly all of his wealth to launch SpaceX. Ted Turner gambled his company numerous times as he built his media empire. And we admire them for it.
But internal innovators think differently. They may appear to take high-risk gambles, but actually they are very deliberate about when and how to do so. They excel at calculating risk then making thoughtful bets.
Internal innovators approach risk differently for a specific reason. Even if you are comfortable with risk, your company may not be. And since you are risking your employer’s capital, not your own, it’s your company’s risk profile that matters. That capital is usually backed by more conservative sources. Stock market investors tend to want growth without risk. Their risk-aversion drives through the board into the company’s top team and throughout the organization.
How do internal innovators overcome the intrinsic risk-aversion of their company? They can try to remove it by, say, transforming the company’s ownership structure. But it’s more realistic, and far easier, to find creative ways to de-risk your bets. You must figure out how to engineer ideas to maximize your upside while protecting your downside.
Remember that while entrepreneurs can shop their ideas to, on average, 40 investors before getting funding; internal innovators really have only one option—their employer. So winning support depends less on the quality of your pitch deck than the political work performed before the pitch to understand and align interests.
In a breakthrough study of what they call serial innovators, researchers Raymond L. Price, Abbie Griffin, Bruce A. Vojak, Nathan Hoffmann, and Holli Burgon conducted in-depth interviews with nearly 100 internal innovators. They found the key trait that separates successful internal innovators from frustrated ones was that they view the political challenge simply as part of the problem-solving process.
Here’s how they describe the successful approach:
Serial innovators described themselves as consciously ‘crossing the bridge’ from having a naïve view of the organization’s political machinations to becoming willing to engage the organization politically using their talent, creativity, and persistence. Their political actions usually emanate from a foundation of trust and respect, which must be built over time and across people in multiple functions at multiple levels of the organization. Then they apply a wide variety of political influence actions to help move the organization. They actively engage people across their organization. They position the product and the project in the context of the organization in a way that others could see the value and benefits. Then, they use both soft and hard influence actions to help others move with them. Politics, almost, become a natural part of what they do in order to ensure that their innovations reach the market and address the customer needs they so thoroughly understand.[i]
Your internal innovation journey, then, will look less like banging down the doors of funders and more like carefully navigating a complex, interconnected network of internal stakeholders. Hoby Darling, the Nike executive who led Nike+, the company’s digital business behind the Nike FuelBand, arguably the product that proved the mass market for wearable sports technology, put it to me this way: “When you work for a large company, you need to spend a lot of time lining up the cannons, but when they go off, they go off with a big bang.”
Your challenge as an internal innovator is to design a solution that will work in a system that has multiple stakeholders and is continuously evolving. Success depends, not only on whether the market will embrace your idea, but whether you are able to synchronize your idea with the motivations of internal stakeholders.
You will also have to balance between incongruent systems of rules—what is formally allowed and what is best for the company. This will force you to deal with unique ethical choices.[ii] Think of it this way: If you’re pursuing something that you know your organization would benefit from but would require a change in an existing policy or procedure, how do you move forward? Internal innovators often have to step outside of the norms, bend or even break rules, but they are very clear that they do so for the benefit of the organization.
One source of tension that continually pops up is compensation. Internal innovators often express the frustration that they could be making more money if they were building their businesses and driving their innovation independently. “I am torn,” one told me, “because I used to be an entrepreneur and I know that if I were doing this on my own there would be a significant potential payout for me. Because I’m doing it here, it’s not clear that my effort will be recognized or rewarded. I may get a bonus or a pay raise, but it will never be comparable to what the payoff would be if I did it on my own.”
But when I asked why he didn’t just quit and go out on his own, he candidly admitted that doing so would come at considerable risk. He didn’t want to “eat ramen noodles every night” or put his family’s financial security at risk. He made a conscious choice that he was going to forgo the potential payoff in exchange for a more predictable career path. His supervisor, who heads the internal venturing group, said that whenever he gets into discussions about compensation, he reminds his internal innovators that “they are not incurring nearly as much risk as they would have were they to do it on their own. What you get to do here is build an exciting career.”
As we will see shortly, even the best internal innovators face significant barriers at every step of the way. These barriers can be so discouraging that some people simply give up. Others keep going, finding a way around or through those barriers. What motivates them to persist?
There are several answers, as documented by numerous research studies. They may be driven by the opportunity to leverage the scale of the organization and create something new that they could potentially become the manager of, thereby accelerating their career path.[iii] They may be moved by the sense of purpose that comes from building something new.[iv] They may want to serve the greater cause of their leader or organization.
Sometimes all of the above, or a combination. But no matter their underlying motivation, all great internal innovators are passionate. They proactively drive and independently think to pursue their idea. They tend to serve a higher purpose, perhaps even greater than their CEO. They seem to serve an understanding of what their organization stands for and seek out opportunities to help their organization fulfill its potential in the world.
Are you an internal innovator?
All innovators face barriers that hinder innovating from within. Download my recent webinar with GP Strategies in which I outline seven key steps to unlock the value of your employees’ ideas, drive innovation inside your organization, and make sure the next “great idea” doesn’t go unnoticed.
[i] Raymond L. Price, Abbie Griffin, Bruce A. Vojak, Nathan Hoffmann, and Holli Burgon, “Innovation politics: how serial innovators gain organisational acceptance for breakthrough new products,” International Journal of Technology Marketing, Vol. 4, Nos. 2/3, 2009
[ii] Donald F. Kuratko and Michael G. Goldsby, “Corporate Entrepreneurs or Rogue Middle Managers? A Framework for Ethical Corporate Entrepreneurship,” Journal of Business Ethics, Vol. 55, No. 1 (Nov. 2004), pp. 13-30
[iii] (Kirzner, 1973; Burgelman, 1991).
[iv] Cardon. (2009), Policy Sciences, 4:2 (1973:June)
Kaihan specializes in serving financial service, technology, and retail firms who recognize the need to move away from traditional linear models to embrace agile, digital strategies for the accelerating world. His clients include ABC TV, AIG, BNY Mellon, Citibank, Pershing, TIAA, Realogy, Microsoft, VM Ware, and Johnson & Johnson.
Nobel Peace Prize winner Mohammad Yunus has said, "Kaihan shows that with a compelling idea anyone can change the world" and that message has made Kaihan one of the most sought-after public speakers on the topics of business, strategy, and innovation.
He earned his BS in Finance from Wharton Business School, BS in Mechanical Engineering from the University of Pennsylvania, MBA from Columbia Business School, and holds a Doctorate of Science in Economics.For more information, visit Kaihan.net or Outthinker.com.
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- Six Vital Attributes of a Successful Internal Innovator - August 21, 2018