An Overview of Intrapreneurship in the United States
By Howard Edward Haller, Ph.D.
Intrapreneurship, which many still be referred to as Corporate Entrepreneurship, comes from the idea of using entrepreneurial ideas, innovation and start-up business techniques within an large (or medium sized) organization. The type of organization that could take advantage of intrapreneurship could include a corporation, partnership, association, or a non-profit organization. Intrapreneurship can be effectively used to create a new product line or a new service by using intrapreneurship to increase creativity, by unlocking innovation, and maximizing the human capital with the firm, thereby increase profits and increasing their long-term success.
There are existing formal intrapreneurship programs in place throughout the world. Many forward-thinking organizations allow their employees time and freedom to pursue new ideas for the organization, sometimes within the existence of a formal intrapreneurship program. Intrapreneurship Programs very widely in their scope, structure, and incentives to employees for successful creation of a product.
A successful Intrapreneurship program requires an intrapreneur to be able to overcome the formal organizational structure, internal roadblocks, and deal with the organization’s slow moving bureaucracy. The Corporate Entrepreneur will need to be able to convince both their organization’s middle and senior management that a new creative idea or service has strong market, and would be profitable for the organization, and also synergistic to the organization’s basic mission.
To be a successful intrapreneur takes much more than just creativity or an idea. The successful intrapreneur has to be willing to take real risks at sharing and pushing an unique idea. Intrapreneurs may have to be patient and have wait for their organization’s senior management’s final approval to create and launch a product or to create a new service, and they must be willing to push-wait-push-wait and never quit.
Intrapreneurship has been called the secret weapon for success used by 3M, Apple Computer, Anaconda-Ericsson, GE, Lockheed, Prime Computer, Toyota, Sony, Rubbermaid, United Artists/TeleCommunications Inc., and many other successful corporations! Effective Intrapreneurship or Corporate Entrepreneurship programs are essential to survival in the business world and through tough economic conditions.
The basic concepts use in “intrapreneuring” and “intrapreneurship” have existed many organizations, such as the Lockheed “Skunk Works”. Intrapreneurship can create the opportunity for increased sales, additional services, and can help major companies to succeed! A formal academic, but yet “real world” business, case study of intrapreneurship was done in 1982 on the rapidly growing super mini computer firm PR1ME Computer Inc. from 1977 to 1980. This detailed case study was presented by intrapreneur Howard Edward Haller (now serial intrapreneur Dr. Haller) in his 1982 Masters in Management Thesis was published by the University entitled “The Marketing and Financial Impact of creating an Intrapreneurial Captive Finance Division in a Rapidly Growing Public Company.” Dr. Haller in 1977 was a Co-Founder of the Intrapreneurial venture PR1ME Leasing and he share the inside story and comprehensive analysis of the significant impact on the sales growth and earnings of PR1ME Computer Inc., in the late 1970′s.
Steve Jobs, Apple’s Chairman, specifically helped in popularizing the term “intrapreneurship.” Job’s, in a September 30, 1985 “Newsweek” article, in which he said, “The Macintosh team was what is commonly known as intrapreneurship… a group of people going, in essence, back to the garage, but in a large company.” TIME magazine also in 1985 published an article entitled “Here Come the Entrepreneurs.” The management consultant Gifford Pinchot III book “Intrapreneuring” was published in 1985.
John Naisbett, the futurist management author, noted that intrapreneurship concepts are an important way for established businesses to find new markets and new products in his best-seller, “Re-Inventing the Corporation.”
By the 1990′s, the corporate entrepreneurship or intrapreneurship concept was established. Graduate Professor Rosabeth Moss Kanter, of Harvard University School of Business, shared the point of the importance of intrapreneurship in her best-selling book in 1990, “When Giants Learn to Dance.” Dr. Kanter strongly makes her point that intrapreneurial ventures or development within companies or organizations was a key factor in ensuring the survival of a company.
The large established aircraft manufacturer, Lockheed, allow and encouraged development and free thinking in its “Skunk Works” operation, which was one the earliest documented successful corporate entrepreneurship ventures, which took place well over forty years ago.
Over the last three decades many other large and small growing companies have experimented with allowing entrepreneurial activity within their companies, associations, or non-profit organizations. Several other successful intrapreneurial ventures, in addition to the Lockheed “Skunk Works,” are: Apple “Macintosh,” PR1ME Computer “PR1ME Leasing,” 3M “Post-It Notes,” and the W L Gore “Elixir Guitar Sting Line.”
A successful example from the 1980′s of intrapreneurial success was done within a joint venture by a two major international companies, ARCO (Atlantic Richfield) Anaconda Wire and Cable Subsidiary and Swedish Telecommunication giant LM Ericsson.
Shortly after the creation of Anaconda-Ericsson Inc. they created consulted with experts in the creation of Intrapreneurial ventures, especially how to handle their Western Hemisphere financing needs. ARCO’s senior finance people knew of Howard Edward Haller extensive experience in equipment finance and leasing. Haller was the Co-Founder of PR1ME Leasing for PR1ME Computer Inc. Haller made a formal proposal to the senior management of Anaconda-Ericsson Inc. about the benefits and structure of creating an intrapreneurial captive finance subsidiary for Anaconda-Ericsson Inc.
Haller (who’s Masters in Management thesis was published in 1982 on the marketing and financial impact of creating a captive Intrapreneurial finance subsidiary) was hired and appointed as the Managing Director of the “de novo” Intrapreneurial venture Anaconda-Ericsson Inc. “Western Hemisphere Anaconda-Ericsson Finance and Leasing Subsidiary” to finance the sales of their products internationally. Anaconda-Ericsson Inc. startup Finance and Leasing Subsidiary was able to grow quickly by using non-recourse basis loans from a group of major banks, with minimal investment by the parent company, and nominal guarantees on the bank loans.
The Anaconda-Ericsson Finance and Leasing Subsidiary used some SEK debt (Swedish Ex-IM Bank funding for export sales) as the debt sources at low interest rates to structure leverage equipment leases. Haller used his banking contacts to arrange “Non-Recourse” and “Non-Notification” without the corporate guarantee of Anaconda-Ericsson Inc. Haller’s Anaconda-Ericsson Finance and Leasing Subsidiary venture did $800+ Million in financing in its first three years of existence as a very successful startup intrapreneurship venture.
Copyright (C) 1982-2012, Intrapreneurship Institute and Dr. Howard Edward Haller
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Howard Edward Haller, Ph.D. is Professional Keynote Speaker on Intrapreneurship, Corporate Entrepreneurship, Intrapreneurship Program Creation, Using Intrapreneurship programs as a strategic tool for Recruiting and Retaining Key Employees, and Using Intrapreneurship to Increase Innovation and Foster Creativity.
Dr. Howard Edward Haller is a “street smart” serial Intrapreneur and Entrepreneur, and is the Leading Expert and Thought Leader on Intrapreneurship, Intrapreneurship Program Creation, Intrapreneurship Program Implementation & Operation, and Entrepreneurship.
Dr. Haller is also a University Graduate Business School Professor, major University Trustee (Emeritus), and past University Board President, as well as a seasoned Senior Corporate Executive of major public and private companies. Haller was the Founder and Managing Director of Anaconda-Ericsson Finance and Leasing Inc.(for Anaconda-Ericsson Inc., the ARCO & LM Ericsson Joint Venture) Dr. Haller was Senior Vice President of United Artist/Tele-Communications Inc., where he managed assets in excess of $4 Billion.
Howard Edward Haller’s groundbreaking 1982 University published academic research on intrapreneurship is cited by Wikipedia.org in their “History of Intrapreneurship” entry. In addition, Dr. Haller’s 2009 published intrapreneurship book “Intrapreneurship Success: A PR1ME Example” is also cited by Wikipedia.org in their “History of Intrapreneurship.”
Book Dr. Howard Edward Haller to speak or consult with your entire firm or your senior executive on Intrapreneurship, Corporate Entrepreneurship , Intrapreneurship Program Creation or Increasing Innovation with your company.