Lifecycle of Intrapreneurship (Corporate Entrepreneurship)
By Howard Edward Haller, Ph.D.
Intrapreneurship, sometimes referred to as Corporate Entrepreneurship, is based on the concept of using entrepreneurial techniques within an organization (which can be a corporation, partnership, association, or non-profit organization). Intrapreneurship can be utilized to create new services, products, a new division or subsidiary to help an organization add additional revenue to be able to survive tough times and grow faster and more profitable. The Intrapreneurship concept has been used successfully by firms in the United States, Europe, Asia and Africa. A successful intrapreneurship program can and will increase creativity, unlock innovation, maximize human capital, which will result in increasing profits and helping the firm’s growth and long-term success.
It takes a unique set of skills beyond creativity in order to become a successful intrapreneur. An intrapreneur must be willing to take some risks at sharing and pushing a unique idea, have the perseverance to wait for senior management’s final approval to create and launch a product or service, and possess the drive to see the idea through to fruition, no matter what.
Some enlightened organizations allow an intrapreneur time freedom to pursue new ideas for the organization. Corporate entrepreneurship or the popular term intrapreneurship is the valuable secret weapon used by many international companies such as 3M, Anaconda-Ericsson, GE, Lockheed, Rubbermaid, Sony, Toyota for over 40 years. Many firms around the world have created formal Intrapreneurship Programs. To have a successful Intrapreneurship program the team must overcome the roadblocks of formal organizational structure and possibly a slow moving organizational bureaucracy. The individual Intrapreneur, or Corporate Entrepreneur, must learn how to successfully convince both middle management and senior management that a new, “out of the box” idea has merit, market, and would be both profitable and synergistic to the organization’s basic mission.
In 1982, Howard Haller wrote and successful defended his Master’s Thesis on the “real world” use of intrapreneurship techniques.
The University published Haller’s Master’s Thesis on Intrapreneurship within PR1ME Computer. This detailed quantitative academic research and analysis was a formal case study of Intrapreneurship Success at PR1ME Computer Inc. from 1977 to 1980. PR1ME Computer Inc. grew from a small OTC listed firm to a $480 million annual sales firm and became the #1 performing stock on the NYSE in four years.
The word “Intrapreneurship” was brought into the mainstream media by Apple’s Chairman, Steve Jobs. Job’s popularized the term “intrapreneurship” in his “Newsweek,” article (in their September 30, 1985 issue) in which he stated for the record, “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.”
The terms “intrapreneuring” and “intrapreneurship” and basic concepts of both intrapreneuring and intrapreneurship existed in organizations, such as the Lockheed “Skunk Works” for decades before the 1985 article in Time magazine “Here Come the Intrapreneurs,” or the management consultant Gifford Pinchot III published his book “Intrapreneuring” in 1985.
Futurist management author, John Naisbett noted that intrapreneurship concepts are an important way for established businesses to find new markets and new products in his best-selling management book, “Re-Inventing the Corporation.”
The intrapreneurship concept was established enough that by 1990, well-respected Graduate Professor Rosabeth Moss Kanter, of Harvard University School of Business, shared the point of the importance of intrapreneurship in her best-selling book, “When Giants Learn to Dance” in which she specifically points out that intrapreneurial development in companies or organizations was a key factor in ensuring the survival of a company. While Dr. Kanter’s overall observation is accurate, it only tells part of the story of the life cycle of various intrapreneurial ventures in today’s world.
Sometime intrapreneurship has only a limited life of successful contribution in a company’s growth. On particular example of short lived successful intrapreneurial ventures was United Artists.
United Artists Entertainment (UAE) (United Artists Theatre Circuit and United Artists Cable) at the time was the World’s Largest Theater Chain and one of the top Cable Television Companies. TeleCommunications Inc. (TCI) (the World’s Largest Cable Television Company) purchase 100% of UAE’s Stock.
United Artists created a new intrapreneurial venture when they created United Artist Realty Company which was the Real Estate subsidiary. When more cash was needed to grow TCI, United Artist’s new parent TeleCommunication arranged to place major commercial real estate portfolio loans on “Wall Street.” UA/TCI sold over $169 Million of surplus real estate across the United States, at 143% of the recent MAI Appraised Values (in the down real estate market of 1990).
At United Artist/TeleCommunications Inc., their intrapreneurial venture of creating the Real Estate subsidiary UA/TCI was used as a strategic short term weapon to accomplish a specific purpose and meet a current need. Sometimes the use of intrapreneurship is only used in one phase of a business’ growth and development. Within United Artists/TeleCommunications Inc. the environment was constantly changing and evolving with mergers, acquisitions, and divestitures.
United Artists Entertainment also had a 50% interest in an intrapreneurial Film Distribution Joint Venture, which was headquartered in California. United Artist Theatre Circuit’s (UEA) arm was headquartered in Woodbury, NY. Taurus Entertainment successfully distributed a number of major films for UA. Intrapreneurship worked within United Artists in the creation and operation of the successful captive film distribution Joint Venture.
Just before the spinoff of UATC, TeleCommunications Inc., the Board of Director’s ordered the sale of UA/TCI’s 50% interest in Taurus Entertainment, United Artist’s Film Distribution arm) to its 50% partner, in a private negotiated sale.
After TeleCommunications Inc. took over 100% of the UAE stock, UA/TCI made the strategic decision that the existing captive UA Theater Construction Division could be eliminated. After it was disbanded then UA/TCI used local General Contractors to build UA Theaters and TCI Cable buildings. The policy would involve UAE/TCI would hiring third party contractors and architects all across the country.
The intrapreneurial captive UA Theater Construction Division was not capable of handling construction needs after the merger of UAE into TCI and the expanded needs for nationwide construction for all the new UA Theaters, UA Theater Remodeling, and the new TCI Offices and TCI Head End Stations.
John Malone, Ph.D., President and CEO of TCI (later Chairman and CEO) of the TeleCommunications Inc. Board of Directors, later elected to sell off United Artists Theatre Circuit (UATC) to a UATC Management team in a Leverage buyout with major help from an Investment Banker, Merrill Lynch Capital Markets with TCI carrying the partial senior debt with Merrill Lynch Capital Markets subordinating their approximately $500 million financing.
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.