How are entrepreneurial approaches disrupting the corporate world from within? Professor Margaret Maile Petty and Dr Natalia Nikolova caught up to discuss how today’s businesses anticipate and prepare for the future of work.
Natalia Nikolova
Margaret Maile Petty (MMP): We hear a lot about entrepreneurship from government and in the media, but not so much about intrapreneurship. What is it, and why is it central to addressing disruption and adapting to the future of work?
Natalia Nikolova (NN): Typically, intrapreneurship is defined as entrepreneurship initiatives and practices within existing organisations. The goal of intrapreneurship is to revitalise and keep established organisations competitive long term. Established companies are generally found to be less innovative than smaller ones or startups.
Intrapreneurship is key to addressing disruption - studies have found that corporations are becoming increasingly short-lived, thanks to being disrupted by newcomers. For example, since 2000 more than half of the S&P 500 companies have disappeared. With accelerating technological change, innovating becomes critical if companies are to survive.
The implications for the future of work are that every employee will be expected to have an entrepreneurial mindset and contribute to the innovation capability of their company.
MMP: In what ways do intrapreneurs contribute to the development and success of innovative organisations? How are innovation-led organisations different from their competitors?
NN: Intrapreneurs contribute to the renewal and competitiveness of organisations given constant technological changes. For example, through the development of new business ventures that could either be integrated into the existing organisation or be spun-off independently; new products/services, product/services improvements, and new strategic directions for the organisation.
However, established organisations can’t just rely on a few ‘lonely’ intrapreneurs. Research has shown that the most successful intrapreneurs and innovation-led organisations have supportive cultures and structures, and are connected with external partners in extensive innovation ecosystems, including universities, research institutions, and other companies.
This is what sets innovation-led companies apart: they have been successful in establishing organisational cultures where initiative is rewarded and failures are encouraged. They have structures, processes and senior leadership which are supportive of innovation, and they have built an ecosystem of partners which enables these organisations to constantly bring in new ideas into their organisations.
MMP: Can any organisation be innovation-led, or is it more relevant for some rather than others? Are there simple changes that can be implemented in the short term? And what about long term?
NN: With accelerating innovation change, every organisation needs to aim to become innovation-led. We all have been reading about significant changes caused by new technologies such as AI, VR (virtual reality), blockchain and big data. These technologies will impact every type of organisation. However, some researchers have argued that in highly turbulent and uncertain markets, it could be beneficial for companies to scale back on innovating until they are able to better understand the future directions of these markets.
In the short term, many established organisations have chosen to set up separate innovation labs. These are usually set apart from the rest of the organisation so they can operate uninhibitedly. However, such labs often don’t work, as this recent commentary demonstrates.
My own research, though, on the innovation lab of an Australian ASX 200 company, shows how they can be a good starting point to establish an innovation mindset and culture. Longer term, companies need to pursue a double strategy: developing an internal innovation capability and partnering externally - including cooperating with, and even acquiring, innovative companies/start-ups. This is a strategy many leading tech companies are pursuing.
MMP: Do you have any guidance regarding the challenges creative companies face when developing innovation strategies? What can they take from tech companies and vice versa?
NN: Research on creative companies has shown that many creative companies, while being quite innovative, are less business-savvy with regard to turning new ideas into profitable business models. This is something that has plagued the creative industries sector for quite some time - individual creativity often drives the success of the organisation, but they struggle to create a sustainable business model to scale up this creativity.
Creative companies could learn from tech companies to put more focus on the scalability of their creative ideas and how to develop financially sustainable business models. On the other hand, tech companies can learn from creative companies how to ensure that their employees remain creative and innovative, even if they are part of larger organisations with bureaucracy and managerial practices that often stifle innovation. In many ways, the stories we hear from organisations like Alphabet/Google and Apple, about the playful environments they have created for their employees and the flat hierarchies they have established, are in line with how smaller creative companies operate. Yet, Amazon, for example, has been under the spotlight, because of the stifling practices and toxic culture its employees have experienced.
The question how to keep the creative/innovative mind-set as organisations grow is critical to ensure that large organisations, whether tech or not, can continue to be innovative.
Dr Natalia Nikolova is Senior Lecturer, UTS Business School and Faculty of Transdisciplinary Innovation. Professor Margaret Maile Petty is UTS Executive Director, Innovation and Entrepreneurship.
Stay connected with UTS Innovation and Entrepreneurship - visit entrepreneurship.uts.edu.au and sign up to our newsletter to discover more.
Margaret Maile Petty