Editor’s note: This is the fifth “Executive Insight” column, a weekly feature for Local Tech Wire as part of its partnership with the and
By Todd Bolon, vice president at Railinc
CARY, N.C. – For a successful IT company in a 180-year-old industry whose members are often required to use your services, embarking on a new venture is no easy task. So how does a company chart a new course and create enthusiasm without jeopardizing its core business, poisoning the company’s culture or surrendering to old thinking that doomed promising projects in the past?
My company’s answer: intrapreneurship.
Intrapreneurship means adopting the principles of entrepreneurs, but within a corporate environment, usually within a small venture group. Intrapreneurship relies on the resources and assets of a company to create new ideas and products.
My company started “intrapreneuring” six months ago, and I quickly discovered that there are many challenges and we do not often see an immediate reward. Here are a few lessons from the inside.
First, allow the venture group to be different. We created our team from individuals throughout the company, grouped them together and closed the door. We gave our venture team free rein to create its own structure (flat, no hierarchy and equally-shared responsibilities). It was exempted from any “bureaucratic” policies that distracted from the primary objective, which was to create new revenue. Eventually, the team had its own quirky personality, different from the rest of the company, which included regular stand-up meetings, brainstorming and well – don’t ask about the platypus!
Second, experiment a lot. Authors Vijay Govindarajan and Chris Trimble suggest in their book, Ten Rules for Strategic Innovators – From Idea to Execution, that no amount of research can resolve all of the unknowns before a business is launched. Confront the unknowns by experimenting, which means failing, making mistakes, learning and eventually succeeding.
One way our team experiments is through the Agile development process. This process lets us build out technology models quickly without investing too much time or resources. The team can see within several weeks whether models will work or not. They even experiment with pricing, quickly assessing the value of a product to customers given our current development process. Sometimes prices work, sometimes they don’t. The key is to learn as we go.
The third lesson is stay below the radar. Gifford Pinchot, who wrote Intrapreneuring: Why You Don’t Have to Leave the Corporation to Become an Entrepreneur, suggested that intrapreneurs work “underground.” Once found out, the “corporate immune mechanism” takes over. In my experience, this is the greatest challenge intrapreneurs will confront.
Consider the case of the supportive, well-meaning associate, who also wants to offer his own advice from outside the group on how to get things done. This person is then offended when not “kept in the loop” of the group’s activities. Peers and co-workers may become envious of the “fun stuff” the group gets to do because they have fewer corporate constraints.
Ultimately, the intrapreneur must find equilibrium between the team and the rest of the company. Govindarajan and Trimble call it “managing tensions” and point out that the health of the new venture team and the rest of the company easily deteriorates. The group may be unprofitable from a financial perspective for an uncomfortable period of time, while other work continues to pile up. Oftentimes, difficult and unpopular decisions must be made.
However, there are no free rides for the venture team. The leader must have a business plan with a road map to profitability and secure financial commitment from senior executives to see the plan through. That means the job becomes a constant exercise in expectation management and pushing the venture team to grow with the urgency of a startup. It requires dexterity and the ability to remain calm under pressure.
Six months into our adventure, new revenue is starting to trickle in. It feels a little like a storm gathering and a few rain drops fall. The bottom may fall out or it may pass. But the moment is certainly exciting.
About the author: Todd Bolon is vice president at Railinc, a leader in technology- based innovation for the rail industry. Todd leads the technology group at Railinc. Formerly, Todd held technology leadership positions at General Electric, Trans World Airlines (TWA) and Sea-Land Service. He earned an MBA from the Wharton School of Business at the University of Pennsylvania and a Bachelor’s from the University of Virginia.
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