The Dangers of Siloing Innovation and Canada’s Intrapreneurial Transformation
- To cultivate a culture of intrapreneurship you must work from and celebrate failure, allow for big risk and big reward, and have your employees undergo education and training.
- Businesses need more than one department or one employee to drive innovation, it must be pervasive throughout the company and be fostered at an individual level.
- The current pandemic presents an opportunity for intrapreneurs to experiment, fail often and fail fast, so long as they can afford to.
There is an intrapreneurship gap in Canada between multinationals and SMEs. The government should provide the same benefits, resources and talent to SMEs that they provide to multinationals, which would enable SMEs to pivot to new sectors, adopt new technologies, export to new markets, create resilient supply chains and innovate without fear of failure.
What is the relationship between intrapreneurs and innovation?
Intrapreneurs and innovation are really similar, in that intrapreneurship relates to how a person behaves and innovation relates to how a company behaves. Intrapreneurship is needed for a company’s innovation ecosystem, and you need people to do that. I am an intrapreneur, and I have three rules for myself: I start small, I think big and I create value.
Right now, because of COVID-19, there is an increase in digital transformation, automation, remote work and online presence, and that all requires innovation. It is really the individuals within companies that do that.
“I am an intrapreneur, and I have three rules for myself: I start small, I think big and I create value.”
Unfortunately, often there is a department of innovation or a group which is in a silo within a company—like Skunkworks—and that is where innovation happens, but that is not how it permeates throughout the company. Innovation has to be one person at a time.
Right now, we are dealing with two crises from a company point of view. One is the healthcare crisis, which is the safety and security of employees. There is a pandemic, and a second wave now, and the population is different than the first wave. Then there is the economic crisis, in which businesses have to look at their markets and supply chains and understand the uncertainty, and I think intrapreneurs can help with both crises.
In terms of the healthcare crisis, I have seen how intrapreneurs have helped by digitizing. They have created online services and platforms, instead of just hardware, and are using software including AI. From a manufacturing point of view, supply chains have been severely disrupted, so if a company did not have an innovation network before this, the pandemic has forced them to get one. Intrapreneurs are the ones who create these innovations.
What are the risks or disadvantages of intrapreneurship?
Intrapreneurs are good change agents, whereas companies do not like change—they like to stay with the status quo. In the current COVID-19 environment, you cannot stay with the status quo because everything around you is changing. That is why intrapreneurs are a good fit right now. Intrapreneurs are flexible, adaptable and they do not need processes, routines or standards, whereas companies do. Intrapreneurs are good transformational leaders at a time like this, because we are going from a plateau of routine to something new.
There has to be a balance between intrapreneurship activities and day-to-day operations in the company. I am an intrapreneur, and I would never want to run operations because I know my strengths and weaknesses, so a company needs to know when to allow people to lead in different ways.
How can organizations transition from a traditional company culture to a more intrapreneurial one?
I will start with a small history lesson. The original intrapreneurship system started by being called Skunk Works, and when I worked for IBM that was what it was called. Lockhead Martin invented the name back in 1943 when they were doing the P-80 fighter jets for the war, so it had to be secretive and be part of the war effort. This was a separate team, and their leader wrote 14 Rules of Intrapreneurship, which was great because they could procure their own parts, do their own research and sell to their own customers. It was almost a separate division and it operated like a startup. IBM did something similar with the PC.
“Some innovation hubs today call themselves garages, because that became the next word for intrapreneurship.”
What I did not like was the negative connotation of the name, in that there would be people behind the scenes that nobody knew, and sometimes they would emerge, but we wouldn’t find out for a year what had happened there. If we fast forward to when Apple started in 1985, Steve Jobs took a group of people into a garage, and that was how the company was acting entrepreneurial. Some innovation hubs today call themselves garages, because that became the next word for intrapreneurship. You go into a garage, or you have space at a college or university to do your work, and in that way, you are acting more entrepreneurial because you are operating outside of the walls of the company. Communitech is very good at that, and they have large brand name companies in the Kitchener-Waterloo incubator that are acting in this way.
I worked with Google X, and I liked their model for intrapreneurship in that they had a formal Google X division where they could moonshoot ideas and allow their employees to pursue them and put structure and effort into them. They also give employees 20% of their time to pursue projects of their choice, which is a more ad hoc or serendipitous way of driving intrapreneurship. Both of these approaches are interesting and very creative in terms of what they were able to accomplish.
However, in those examples there is a problem where they are all multinational companies. If we are thinking about SMEs, I cannot think of a specific example of an intrapreneurship approach. SMEs have the benefit of being smaller organizations, which allows them to innovate faster, but on the negative side they do not have the funds and resources to support intrapreneurs.
“First, you must allow failure, work from failure and celebrate failure.”
In terms of fostering intrapreneurship, I have four recommendations. First, you must allow failure, work from failure and celebrate failure. The second is to allow for big risk, big reward and experimentation, and to try things until you are successful. Third, you need more than one person or a department of innovation on the periphery; intrapreneurship needs to be part of the culture and infrastructure at all levels. Just as you have continuous improvement, you need continuous innovation—and Skunkworks is not continuous. Finally, last but not least, you need to go back to education and training.
What is the role of key stakeholders in fostering a national intrapreneurial culture?
First of all, the government has a huge influence on intrapreneurship because we are a large, geographically separated nation of companies. We also have a large SME population, so we are not driven by a few multinationals but mostly by small companies. To try to create change through industries is very much like a patchwork. I believe the federal government needs to be more cohesive and more inclusive of all regions.
I also think of intrapreneurship from the individual perspective—so how do we change management at the individual level? Today, we need to be continuously learning, so I would teach people about tech. Tech sometimes has a negative connotation, but it is hardware, software, AI—and Canada has strengths in all of those areas. Teaching people about tech and how to leverage it, whether they have a background in it or not, is very important.
The other thing we have to address and understand is the impact of COVID-19 on our economy. We need to address the healthcare crisis and a new way of working. I have seen a shift from physically coming into the factory to digitally working from home, and there are new rules and responsibilities associated with that.
The last thing that needs to happen is pivoting, experimenting and failing often, failing fast. Being an intrapreneur myself, I see right now as a time to try new things without fear. However, it is very hard to do that at a small company level—so how do we organize or incentivize people to do things? The government has actually done an amazing job of quickly looking at personal protective equipment and health care, and then pivoting programs to support those areas. But right now, people are exhausted by doing proposals and they would actually like to do something, even if it is small. A program that comes to mind is Digital Main Street, which helps Ontario companies digitize and have an online presence, but we need to do more there. Teaching intrapreneurship means teaching employees to find the next best thing and to understand that you have to change. That is the intrapreneurial mindset.
Who would you pitch in 30 seconds about improving Canada’s culture of intrapreneurship and what would you tell them?
I would pitch to the Minister of Small Busines, Export Promotion and International Trade, the Honourable Mary Ng, and the Minister of Innovation, Science and Economic Development, the Honourable Navdeep Bains. Both of them relate to my comments on small business and innovation. Mary Ng just came out with Canada’s State of Trade report a few months ago, and it said that no sector of the Canadian economy has been immune to the global supply chain disruption caused by COVID-19, and that is a big thing in terms of how we make, design and build products. I was inspired by that in making my pitch to them, so here is my pitch:
Small and medium-sized enterprises make up 99% of Canadian companies, 90% of all jobs in Canada and 85% of new jobs, but there is an intrapreneurship gap in SMEs. Canada has a strong academic, startup and entrepreneur ecosystem and great research ideas, but we need to translate them into economic benefit—and SMEs are the engine of that transformation. We need to educate SMEs, and the government should give them the same benefits as multinational companies, as well as the resources and talent, so they can take greater risk, understand technology and business opportunities, pivot to new sectors, export to new markets, create local resilient supply chains and innovate without fear of failure.