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The Bottom-Line Benefit of Intrapreneurship

Joe Richardson

Joe Richardson

Head of Intrapreneurship

While looking towards the future and defining what corporations need to succeed, a strategy (and heavy conversation) that continues to evolve is intrapreneurship. If you are familiar with the work at L Marks, this is a specific area where we breed innovation by building internal intrapreneurship programs with our partners across the globe.

But while doing this, a question that always comes up for us is the ROI of intrapreneurship. And the truth is that we, very purposefully, never give an answer and this is for a few reasons. The first is that the financial impact is not always directly from a new intrapreneurial venture, although it can be. But some larger financial benefits actually come from the organizational structure of this type of innovation, plus there are benefits of breeding versus buying innovation,  And lastly, intrapreneurship usually doesn’t come from the top, which is also a simple financial benefit. Yes, it is quite complex, but even defining innovation is a difficult task.

As we go through these relative financial benefits of intrapreneurship, I think it is worth noting that corporations are changing what the “bottom line” actually means. We encourage you to reflect on your own organization and redefine your own triple bottom line, customized according to your organization.

Breeding vs Buying

A common way for corporations to invest in innovations for the future is through acquisition. This is a familiar route that serves the purpose of internal improvements, and also getting in on a good idea early to make lots of moola. But what might not be considered is the cost of breeding versus buying an idea. So here are some things to consider regarding the actual cost of intrapreneurship over buying into another start-up.

  • The start up costs will be less: This is probably the most simple one to understand. As an existing company, you already have allocated budgets for office space, working technology and software subscriptions, healthcare and other benefits. These are costs that no matter what, a company will need. By breeding intrapreneurs instead of buying into entrepreneurship, you already have a cost saving.
  • No one knows your business like your employees: Your employees are the ones on the front lines experiencing the inefficiencies and identifying opportunities every day. They know how your business works and what your customers need so are able to come up with ideas tailored specifically to your organisational needs. They also have the structures, access to and understanding of networks within the business that are crucial to success.

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The next piece of ROI to consider, as I mentioned earlier, is what your triple bottom line might actually be for your organization. Going into an intrapreneur venture within your company has more benefits than the potential of building more revenue. Think human capital for this rather than capital-capital.

  • Efficiency and engagement of teams: Intrapreneurs often have to work inside and outside of the lines in terms of a normal work task. They are usually forced by the drive of their business venture to find unique ways of working and connecting, this gives them a unique set of skills to be highly effective and engaged with the work that they are doing.  And this is a top skill of the future of business in a VUCA world (volatility, uncertainty, complexity and ambiguity). In addition, these learnings and networks that are being made from intra teams can be passed onto other departments, creating a continuous stream of growth and inspiration across an organization.

  • Attraction and recruitment: The second piece is that many organizations fall short on support of current employees because they are too busy trying to recruit the best talent. Now, people who already work at your organization know and understand the industry and inner-workings of the day to day operations. So by investing in their strengths as intrapreneurs, this will in turn attract top talent by providing spaces for all employees to engage in innovation and learning.

And last but not least, it’s bottom up

Now, this is the part that you might not want to hear. And that is okay, part of being innovative is being wildly uncomfortable and that in itself is a skill. So first off, being a leader, a manager, and an innovator are all very different things, and it is important to note the variances that each of these roles play. In order for an intrapreneur to be successful, they need many levels of support and you could argue that it must be top down in order to create a culture for innovation.

However, stats show that most top executives lack the skills and abilities to to propel new businesses forward. This doesn’t mean that they are not good innovators or inspiring people, it simply means that they lack the intrapreneurial drive needed to forge into the unknown. 

Managers and business leaders excel in their positions for a very different reason than intrapreneurs do. And these specific skill sets should be manicured for employees to arise to the occasion of a new business venture. Having said that, the ROI of this piece is that it may not be necessary to bring in your expensive top executives to be innovative intrapreneurs, it may actually be far more successful, and financially advantageous to engage employees at all levels and divisions. 

So as you can see, we try very hard to not disclose the real financial gain of intrapreneurship because it goes so far beyond that. It is important for each company to decide on their goals and needs in terms of financial gain and also explore more broadly what that might actually mean.

Investing in intrapreneurship doesn’t mean you will get an additional revenue stream, but you will see investments differently.

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