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Giving Organizational Change to Intrapreneurs is Like Giving Legos to a Child

[FINAL PAPER ONLY] Author 1, 2, or 3 Last Name

Newman, Brown, and Adair

Giving ORganizational Change to Intrapreneurs is Like Giving Legos to a Child

Peter Newman, Ph.D.

Associate Professor and Faculty Chair, Department of Engineering, DeVry University

pnewman@devry.edu, 2149 W. Dunlap Rd., Phoenix, AZ 85021

Steven Brown, MBA

Senior Professor of Liberal Arts & Sciences, DeVry University

sbrown@devry.edu, 2149 W. Dunlap Rd., Phoenix, AZ 85021

Rodger Adair, Ph.D.

Associate Professor, Business & Management, Keller Graduate School of Management, DeVry University

radair@devry.edu, 1201 S. Alma School Rd., Mesa, AZ 85296

Abstract

In this review of the literature, the concept of intrapreneurship and sanctioned vigilantism will be contrasted with traditional organization change efforts to improve, modify or create new products and services. Employee behaviors that both help and hinder the change process will be discussed. Entrepreneurs and intrapreneurs are differentiated and the benefits of encouraging intrapreneurship are presented. Also reviewed is the idea that transformational leadership can empower rank and file employees to be both innovative and highly productive through activating intrinsic motivation to be intrapreneurial. Finally, the need for organizations to align their corporate processes to allow and foster this sanctioned vigilante style intrapreneurship is recommended. Directions for future research are outlined.

Keywords

Organizational change, change, intrepreneurs, process, innovation, better changes, strategic plans.

Introduction

The title of this paper draws a picture in the minds of most readers. When the question is asked, What do children do with a pile of Legos, the answer is that They create. Give a child a box of Legos with some directions and a picture of what the end state should look like, and they will build the objects intended by the directions and picture on the box. After either a few hours or a few days of play, the child typically disassembles the prescribed objects and creates new, innovative and more exciting constructions with no directions but their own intrinsic creativity. Intrapreneurs (employees inside an organization that want to improve a product or process) think much the same way; mentally disassembling functioning processes and reassembling them to be more efficient, respond to a gap in market needs, or to start a new line of products or services all together (Bosma, Stam, & Wennekers, 2010).

When most people hear of dramatic changes in an industry, they discover that an entrepreneur was at the forefront of that innovative change. An entrepreneur is commonly known as the person who starts new ventures or creates new businesses and sometimes entire new industries (Maier & Pop Zenoria, 2011). Most often, entrepreneurs are touted for their creativity, their savvy, and their ability to turn a dream into a workable product or service. Entrepreneurs do this by creating new ventures and companies to develop for, sell to, and even excite a customer base. Much like entrepreneurs, intrapreneurs have been at the forefront of industry paradigm changes as well.

The term intrapreneur or intrapreneurship is fairly new to the business world. It was coined less than a hundred years ago (Quesada, Onaindia, & Laburu, 2011). Intrapreneurial behaviors have existed long before there was a word to describe the trait. Simply stated, intrapreneurs are employees who develop new products, services or business ventures for their employers (Bosma, Stam, & Wennekers, 2010). An intrapreneur is an employee who exhibits creative improvement behaviors within an existing organization (Antocic, Hisrich, 2001; Pinchot, 1985; Guth & Ginsberg, 1990; Parker, 2009; Parker, 2011).

Intrepreneurship is still a rather new concept. In 1934, Josef Schumpeter published his study titled, Entrepreneurial Business Man. This started the journey for what is now known as entrepreneurs and intrapreneurs. By 1958, the entrepreneurial history research center was created at Harvard University. By 1978, Gifford and Elizabeth Pinchot coined the term, Intrapreneur to define an employee with entrepreneurial traits. In 1992, the American Heritage dictionary added the term intrapreneur to the English language dictionary (Quesada, Onainda, & Laburu, 2011).

The topic of intrepreneurship has not been studied extensively over the last few decades. Yet, the studies that have been done overwhelmingly call for more intrepreneurial behavior both within and at more levels within organizations. This would make the organizations that foster intrepreneurial behaviors more flexible and much more competitive. Traditional systematic change efforts provide structure to change as planned and directed through projects and strategic initiatives. Few if any of these structured efforts at change have made use of intrapreneurial behaviors. By contrast, by using an intrapreneurial approach, individual intrapreneurs can quickly make creative changes which will shake up the old ways. This would cause broken processes, antiquated tasks, and obsolete technologies to fall away leaving what does work and what new systems can exist to make the organization profitable and vibrant once again. This chaotic or creative change is improvisational, unstructured and experimental by nature to generate institutional improvements and additional productivity (Smets, Morris, & greenwood, 2012). Research and development programs often assign a process of break-fix-break- create new to test the limits of current products and services. New products, services and even markets can be created through this chaotic process (Bouchard & Basso, 2011). Traditional systematic change however, is structured to prevent waste and rework as planned changes are implemented much like projects. Goals and objectives are determined with specific quantified criteria to attain as long as the process changes are planned.

The secret is to use that chaos effectively and in balance with systematic change to create new and useful products, services, processes, and systems. Chaotic change is not uncontrollable. In this sense it is creative, unstructured, spur of the moment, intuitive, wild, crazy, and risky (Smets, Morris, & Greenwood, 2012). In contrast, systematic change is structured, measured, planned and calculated, logical, safe and virtually risk free. Also, it will miss many great opportunities in favor of merely good opportunities. Most successful changes are a balance of both systematic and chaotic change activities. Intrapreneurs can create the needed chaos either as vigilantes or as partners. A vigilante is an employee who fixes processes they perceive are broken without formal permission or authority. If the organization does not accept or allow their changes, vigilantes could easily turn into entrepreneurs who could become your greatest competition.

Managerial Influences for Intrapreneurs

Business schools teach entrepreneurial principles by methodically planning, creating a detailed business plan, and filling in spreadsheets with data. Yet most successful entrepreneurs tell their stories from a creative, chaotic, fluid world view rather than from an organized, well thought-out plan. The same principles apply to intrapreneurs whether they are improving processes or developing new products or services (ACBSP, 2014). Intrapreneurship has a tremendously positive effect on all organizations that allow this activity to occur, that provide adequate and relevant resources, and that reward successes (Taylor, Carraher, & Dandy, 2012).

Managers involved with new technology projects are repeatedly faced with the potential change or uncertainties associated with projects. Porter (1985) emphasized how organizations can change the level on which businesses compete globally. Innovative changes within an organization can alter the way a business competes and is also a resource that businesses can use to surpass their competitors and create a competitive advantage (Thong & Yap, 1995). Manager intuition is as important in the final decision as the use of actual data because it provides management with the tools for incorporating predictions and unexpected issues that may affect the decision-making process. Managers need to trust their intuition because it can be a powerful instrument in making managerial decisions. Realizing and executing change can add value to a business and differentiate the business from competitors while gaining a competitive advantage. This disruptive viewpoint reflects the position of Rijamampianina, Abratt, and February (2003) who convey that businesses that gain competitive advantage are those that invest in strategies such as new innovations, enhanced processes with greater quality, and cost efficient marketing. Prior research suggests that competitive advantage can be derived from numerous sources and that strategy manipulates the sources under the firms control in order to generate a competitive advantage (Reed & DeFillippi, 1990).

It is reasonable to infer that managers leadership style influences employees innovative behaviors. Transformational leadership sets the most favorable managerial circumstances for intrapreneurship. Transformational leaders enable employees to grow beyond self-interests for a higher purpose, a mission, or vision to exceed expectations. Transactional leaders base workplace dynamics on a series of agreed upon exchanges between leaders and employees (Bass, 1985).

Management has the most effect in facilitating intrepreneurial behavior within the organizati