Why Intrapreneurship is Important in a Changing World
Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship.
Intrapreneurship is a term we, who work with family businesses, are hearing more and more. Successful family businesses historically have taken a long view, tended to be conservative and relied on extended relationships with employees, customers and suppliers. The current world with short product cycles, mobile work force and computer algorithms supplanting human relationships take much of the historic advantage away from the family business. Successful family businesses are recognizing the change in the business environment, intrapreneurship is a response to these changes.
What does intrapreneurship look like? Its reserved for companies that have a culture of innovation, companies that are led by family and management that are prepared to redefine the operating company and look on the business as an economic engine. Innovative family businesses recognize that risk is a requirement of doing business in a quickly changing environment and diversify family wealth outside the business to protect that wealth. Holding companies, real estate, executive pension plans are examples of this diversification.
The younger generation brings advantages that should be used by the family business, today more than at any other time. Understanding market trends and skill with technology are obvious examples where leadership can be provided by the younger generation. Encouraging the next generation to be entrepreneurial is important, giving them responsibility and authority to look at new markets and ways of doing business are part of the process; mentoring, supporting and promoting family members in the operations will help. However, instilling the discipline required to be a business leader is critical. That discipline may be difficult to teach in a generation that has grown up in the world of networks and transient values but buoyed by an innovative culture, respect and clear communication lines an understanding of leadership responsibility will help develop a responsive, intrapreneurial culture and eventually a smooth transition of the business.
Family businesses in Canada account for about 30 per cent of the GDP and the majority of employment growth. In the next few years’ trillions of dollars of value will change hands as the next generation takes over. Successful transitions will happen in the companies that have a spirit of communication are innovative and prepared to redefine their business.
One thing has not changed, success of our family businesses will be important to all Canadians.