Intrapreneurship and Corporate Venturing 387U.S. companies are noted for their sustained ability to be intrapreneurial. Among
these are Procter & Gamble, Johnson & Johnson, and the 3M Company of Minneapo-
lis, Minnesota.^13 3M has created over 100 new businesses or major product lines in its
history. Four out of five of these have succeeded. At 3M any young engineer can pitch
a new business or product idea to top management and be appointed head of the proj-
ect if it is approved. The project or new venture is then set up as a separate business. The
innovative product is assigned a project manager (it could be the originator of the idea,
but not necessessarily), who remains in charge of the venture until it is successful or
abandoned. The project manager can mobilize all the skills and resources necessary for
the product’s development. Incentives for the new business team are aligned with the
project’s success—members of the team are rewarded and promoted as the business
grows.
But U.S. firms are no longer alone in having distinctive intrapreneurial competence.
Table 10.1 lists the world’s most innovative companies for 2006. It is based on a Boston
Consulting Group (BCG) survey and analysis of over 1000 senior executives in 63 com-
panies. Note that, although not every innovator company achieves above-average
returns and growth, as a group the companies greatly exceed the average of the less inno-
vative companies. “Innovation is allowing companies to grow faster [and] have a richer
product mix,” concludes James P. Andrews, who heads the BCG innovation unit.^14
Comparison with Entrepreneurship
For the most part, entrepreneurship and intrapreneurship are very similar. In both cases
the resource-based view provides the underlying theoretical basis. For the entrepreneur,
the resources and capabilities required for success come from personal and market
sources. This is true for corporations as well, but most corporations have resource bases
vastly larger than those of most entrepreneurs. The entrepreneur must consider both the
macro and micro environments for analysis; the corporate intrapreneur must also con-
sider the environment of the corporation itself. Corporate culture, practice and process-
es are the immediate concern for the intrapreneur.
There are differences. The internal market for ideas, the resource evaluation process,
and the individuals who champion intrapreneurship are different from external markets
and processes.^15 Both intrapreneurs and entrepreneurs seek autonomy and freedom and
have fairly long-term perspectives. Intrapreneurs, however, must be much more sensi-
tive to the corporate hierarchy and way of doing things. This means that intrapreneurs
still respond to traditional corporate rewards and must be politically astute. Although
intrapreneurs deal with a bureaucracy and a corporate culture, they also have a support
system to help with their projects. Intrapreneurs must gather approval; entrepreneurs
must gather nerve.^16
Both intrapreneurs and entrepreneurs disdain status symbols in the short term, pre-
ferring to get the venture off the ground. Entrepreneurs can maintain more indepen-
dence in decision making, but they pay a higher price by putting financial resources at
risk. Both corporate intrapreneurs and independent entrepreneurs are likely to have tech-
nical backgrounds. Independents have to rely on their own market research, but
intrapreneurs have to sell their ideas to their own organizations before worrying about
the outside market.^17