1 Introduction

Almost 88% of the companies listed in Fortune 500 in the year of 1955 are no longer existing in 2014. This happens due to constant innovation and creative destruction in industries. Most of the existing companies today will most likely be replaced by new industries or drivers that follow the dynamism of the economy (Perry, 2015).

Intrapreneurship is a method to encourage people within a company to be independent, think, and act creatively, and lead the company to innovation and growth. Corporate entrepreneurship enables people with creative problem solving (Kenton, 2021). Many times, people think of entrepreneurship as strictly linked to start-ups, while it rather should be seen as the act of value creation in different areas, such as new products, services, or business processes, for instance.

MIT Professor Eric von Hippel explains why companies should care about implementing intrapreneurship based on the innovator’s dilemma with a case of a mechanical watchmaker being disrupted by an electronic watch company that does not depend on any of those mechanical resources.

Instead of going on with the same business model, the watchmaker company could set up a small department that focuses on building electronic or even smart watches, which can be scaled up when the situation becomes more threatening.

Companies get too caught up in their daily business, so they do not realize disruptive innovations coming up that can make their existing business model redundant and therefore, do not necessarily do anything about it (Somers, 2018).

The case of camera manufacturer Kodak shows how essential it is for companies to continuously innovate, disrupt their business model, and think out of the box. Kodak had the opportunity: one of their own people, Steve Sasson, created the first digital camera but the management did not realize the necessity and “put the idea back into a closet” (Pachal, 2012). In this case, someone else made this disruptive product, a digital camera, come to life and as a result, Kodak’s business model became unprofitable. The company’s innovation lead was gone, just because they missed out on a major trend in their industry.

2 Theoretical Groundwork on Innovation & Intrapreneurship

Business innovation is described as the implementation of ideas, new processes, services, or products to improve the net income of the company. This can be achieved by launching new products or services to increase revenue or to introduce lean processes that are more efficient or solve current business issues to cut down costs.

A company’s business innovation process should always result in a competitive advantage, help with growth, as well as fulfil strategic objectives (Pratt, 2018).

2.1 Status-Quo

The topic of business innovation in big corporations, in general, is commonly known but still, many companies struggle to innovate. According to a study conducted by Innovation Leader, an online resource for corporate innovation, teams, politics, turf wars and lack of alignment are the biggest obstacles to pursue innovative ideas within a company. When business units are working innovatively (or think they are), they adorn themselves more about the image it creates and start seeing every entrepreneurial initiative as a competition about recognition or resources. Another issue is culture which is based on operational excellence and predictable growth. Innovative change-makers, that are likely to attack stable business strategies, may not always be welcomed. In addition to the already stated reasons and the lack of budget to properly execute innovation, the inability to act on signals crucial for the future of the business is another big implication (Kirsner, 2018).

Corporate entrepreneurship, also called intrapreneurship, is a new model for innovation in established companies. Intrapreneurship means acting like an entrepreneur within a corporation. “An intrapreneur is a person who takes direct responsibility for turning an idea into a new product or service. An intrapreneur brings entrepreneurial thinking and skills to build within the structure of an existing organization” (Cambridge Dictionary, n.d.).

2.2 Establishing an Innovative Environment

Moreover, leaders must be bold thinkers as they play the primary role in fostering innovative environments across the organization top-down. “In today’s world, innovation is the new leadership” (Cashman, 2013). Therefore, the success in creating innovative environments is dependent on leaders. They must nourish the entrepreneurial mindset in every person, so they feel comfortable engaging with intrapreneurship projects.

Corporate entrepreneurship includes people who are willing to drive change and are, therefore, assigned to specific projects on new ideas they either developed themselves or were open to simply engage in projects that demand flexibility, creativity, and out-of-the-box thinking. Intrapreneurs are instructed to work on the project just as a founder would approach the problem and come to an appropriate solution. The company will at the same time provide all resources and budget and support the team in creating new products or services.

According to a study by Corbett (2018) at Harvard Business Review, people are the most valuable innovation asset for companies.

This view comes into effect with intrapreneurship programs but is mostly limited to concentrating on exceptional heroes. Leaders should rather focus on spreading the innovative and entrepreneurial mindset throughout the workforce and every single person. Companies need to realize that hiring a few innovative people or establishing an only centralized innovation department will not change this perception (Corbett, 2018).

Additionally, intrapreneurs grow the bottom line and create a behaviour more than desirable for companies whilst pursuing projects with an inside-out perspective and leverage corporate resources to the most efficient extent. The time-to-market is reduced to the absolute minimum as intrapreneurs orientate on the (lean) start-up methodology, prototype, present minimum viable products (MVP), and mainly focus on the core to avoid unlucky situations, where other competitors get ahead (Kolev et al., 2015).

2.3 Organizational Structure for Innovation

Another significant factor for the success of corporate innovation is where to properly position it inside of the organization. Regardless of size, industry, or even culture, the structure plays an essential role to successfully innovate. There are three main types of structuring innovation inside the company: a centralized, decentralized, or hybrid innovation structure (Toma, 2019).

In the centralized approach, innovation strategies and resources are centralized in one innovation department and separate from the business units. This makes it easier to manage and measure innovation and is suitable for companies where all business units have the same innovation needs. The downside is the not-invented- here syndrome, meaning that a distinct department that might not hold the full understanding of problems and customers creates the innovation which leads to low adoption of ideas in the business units (BU).

In a decentralized structure, each business unit has its innovation resources, and therefore, full control of the efforts undertaken. As tasks and responsibilities are uniformly distributed between people, open communication and collaboration are promoted. Resources are allocated fast and innovative ideas implemented with less friction. The business unit-driven approach makes it more difficult to keep an overview of all ideas and the alignment of them with the overall company goals.

The hybrid structure is BU-enabled and operates as a combination of both, functional and divisional, structures. It allows more flexibility in assigning roles and leads to a less conflictual relationship across business units. Here, the corporate strategy is linked better to each innovation strategy. The biggest contra is that the line of authority might become vague, and deadlines are not made which can lead to issues on many other levels (Toma, 2019).

2.4 Intrapreneurship in Business Innovation

To introduce intrapreneurship as a business innovation method in practice, the theoretical approach was manifested with a conduction of interviews with industry leaders and experts in entrepreneurship within established companies.

3 Data Collection

As a base, the underlying theory explains in detail why innovation is necessary and how intrapreneurship can be an effective tool to achieve innovation in-house. Enriching the answer to this question, specific knowledge from experts in the field of intrapreneurship and innovation has been collected. Therefore, the author decided on conducting structured interviews with experts from the respective fields.

From a methodological viewpoint, expert interviews are classified as a qualitative research method. In qualitative content analysis, material of communication is analysed which can reach from text over pictures to audio. In the underlying research, this analysed content of the communication is retrieved out of audio from oral expert interviews. This content analysis methodology follows specific rules and is, therefore, an appropriate systematic method to create an analysis that is understandable for third parties (Mayring, 2015).

3.1 Variables

To get the best possible results intrapreneurship and innovation managers as well as intrapreneurs themselves from different industries and company sizes were contacted and interviewed. Therewith, the representativeness of the study results was ensured, and a broad sentiment could be collected. The variables defined are visible throughout the different levels of expertise of the interview partners, as well as their industry and personal backgrounds.

3.2 Statistics

When reading about innovation in companies, we conclude that 88% of Fortune 500 companies of 1955 are no longer existing in 2014 (Perry, 2015). Furthermore, nine out of ten start-ups fail with their ideas. This is because entrepreneurs are more risk-averse but most of times also too optimistic about the success of their business (Krommenhoeck, 2018).

Also, in a study of Guidant Financial the top reason for someone to create their own business was to become their own boss and have freedom (55%), followed by pursuing one’s passion (39%). Two of the three biggest challenges small businesses face are lack of capital and recruiting, or keeping suitable talent. For larger corporations this can become a competitive advantage (Guidant Financial, 2021). Intrapreneurship combines the best of both worlds while giving people the opportunity to pursue their passion and be free to create something, while at the same time having the financial resources and not taking the same risk as founding an own company.

4 Case Studies

Two case studies have been conducted specifically to ensure a proper comparison between two different approaches of a more thriving company in comparison to an established cooperation. The companies inspected are SumUp and 3M.

4.1 SumUp’s Start-Up Culture as an Established Company

The way of working is based on three main tiers: agile, safe to fail, and tribal. The agile approach to working at SumUp is iterative and incremental and reduces bureaucracy and hierarchy. To increase agility throughout the company the organizational structure of SumUp categorizes the company’s mission and assigns significant projects in tribes under the missions, which then are divided into different autonomous squads that take over specific tasks.

The culture of failure within SumUp exists since the early days, it belongs to the founder’s mentality. It is even requested to take risks and fail, as failure is seen as an opportunity to grow and not treated as a taboo, which no one talks about (SumUp, n.d.).

As an engineering company, SumUp’s mission is to create innovation from within, ideally bottom-up from individual autonomous teams. In the best-case scenario talent is hired, equipped with tools and resources, and empowered to work towards the vision and mission. Additionally, a specific mindset and common cultural framework are needed to pursue this approach. Autonomy on the one hand, but an entrepreneurial DNA on the other hand, both need to be represented in every team as a common base (Klein, 2020). The founders, current CEO Daniel Klein, and CFO Marc-Alexander Christ, almost naturally pass their mindsets on to the people. Entrepreneurship, with all its characteristics, is truly lived by the management.

Most people working at SumUp automatically adapt this mindset eventually as they want to have an impact and follow their passion. SumUp, as a striving scale-up, soon realized that innovation and taking ideas on a real project level is hard without a scalable program (Stella, 2020).

“On such a platform, teams should be able to self-organize, and ideally also self-manage, and self-motivate to create something new with passion” (Klein, 2020). The objective of this so-called Bets Framework is to create a seamless and transparent process to kick-off and monitor big projects, called bets. Everyone at SumUp can and is highly encouraged to take part and contribute ideas to the bets board, where all bets are gathered for further evaluation.

The ultimate big picture should be to make ourselves redundant. Even though this sounds contradictory, everyone should strive to coach and develop others inside or outside the organization to be able to take over their job. Only if this is possible, people have the time and headspace to concentrate on innovation and creating new ideas as a bet. “If somebody is busy 100 percent of the time and their job is super important, and the entire team he or she works in is dependent on that person, how are we going to allow them to work on a bet?” (Klein, 2020).

The Speed Lane Model is applied with the Bets Framework while bets are seen as parallelized speedboats. These speedboats are projects that try to prove a hypothesis of growth opportunity and need significant investment. The categories in which bets are distinguished and classified are market expansion, product development, service expansion, new sales channels, as well as sales and marketing strategies.

All ideas coming through the Bets Framework are reviewed, discussed, and evaluated by the extended core team which consists of all c-level executives and some additional founding members of the framework as well as other internal advisors. After each revision meeting the best ideas will get the investment and can start pursuing the project with a small start-up-like team inside the organization (Klein, 2020).

Whenever a bet gets approved the team starts working on it and is not supervised closely in the beginning. When the pace starts to pick up all bets are monitored and measured quarterly to mature the idea as quickly as possible, and updates are being communicated throughout the wider teams and company.

Once a bet reaches bigger scales, the updates and measurements become part of the company-wide objectives and key results. When bets become as mature and established as other tribes, they are localized in the general mission, tribal, and squad structure. Depending on the goal and size, bets are organized as either part of a bigger existing mission or as independent missions, if necessary. The superior view is to perceive all bets as small start-ups within SumUp’s missionary organization (Klein, 2020).

However, as in every innovative project, the first iterations of a model are never perfect. This also applies to SumUps Bet Framework, its insufficient methodology and missing or wrong assessment of bets, and therefore insufficient allocation of resources since the introduction of the program.

Bets should be solely strategic ideas focused on long-term goal and not on short-term success. Anyhow, this model suits a scale-up culture very well and allows the company to keep up with innovation in the industry and possible disruption.

4.2 3M’s Innovative Philosophy as a Role Model for Corporates

3M and its unique corporate innovation philosophy are discussed in the following subchapter. They were the pioneers in introducing the 15% time and are living innovation in many ways from the beginning, and like no other company. 3M started their business with something, that failed before they even started. On that day, the founders did not give up which was the moment when the unique 3M innovation spirit was born and still lives up to this day.

What drives the company and people working at 3M is their mission to improve everyone’s life with their technology and scientific products. The strengths are their technology, manufacturing system, global capacities, their whole workforce, and its stable foundation which has proven itself in the past century. They believe that no one can succeed alone but rather that everyone should work together. It is 3M’s priority too, to focus on long-term goals rather than short-term success. It is about continuous improvement and growth, including constant portfolio checks, innovation, and focusing on the own people (3M, n.d.).

In the year 1977, the Challenge ‘81 was founded. This program had the goal to create products with a significant impact. They wanted to achieve a 25% share of the company’s sales from products that were invented in the past five years. The challenge was remarkably successful. It even improved from the main goal to 30% of all sales with products that are on the market for less than four years by the 1990s (3M, 2002).

Today, the New Product Vitality Index (NPVI) for products that are younger than five years is 35% (3M, 2019). After the challenge, a dedicated Innovation Task Force with 16 members was formed to analyse the level of innovation inside of the company and check the mood among the people. For this task force, Gifford Pinchot, founding father of the term intrapreneurship, was hired to accompany them in a four-month innovation audit. The result of this audit was enlightening: intrapreneurs want freedom and recognition to stay creative and motivated. Though, innovation is messy and prone to failure: 60% of new products fail already in the early stage before they can be launched. Therefore, leaders must never punish people for failure in corporate entrepreneurship and innovation. The perfect combination of personal recognition and financial support are, what makes intrapreneurs happy and striving.

William McKnight, who started at 3M as a bookkeeper and made his way up to chairman of the board, was one of the people who had the biggest impact on the culture of innovation at 3M. While he argued for the 15% rule McKnight’s words wrote history: “Encourage experimental doodling. If you put fences around people, you get sheep. Give people the room they need”. Because in the moment people are free, their creativity increases, and they are more likely to look for unexpected opportunities as well as breakthrough inventions (Govindarajan & Srinivas, 2013). Afterward, people were given these 15% of their work week to research and ideate on relevant topics that seem promising for the company’s success (3M, 2019).

The most significant factor of the 15% rule is that it is not measured. People are allowed to spend 15% of their time per week on anything they like which eventually will contribute to making the company more successful. Still, expectations and goals must be communicated clearly, and regularly. Miscommunication and a lack of stakeholder management lead to implications that can easily be prevented.

Overall, after a century of innovation and entrepreneurial spirit in a big corporation like 3M, it can be said that intrapreneurship proved as a very effective method in business innovation, if not too many borders are put around it (Stricker, 2020).

5 Data Evaluation & Interpretation

Innovation is inevitable for companies to stay relevant. Without innovation start-ups, or other companies, will continue to disrupt existing business models and make the affected company redundant. The importance of innovation and disruption is clear for most companies, but they still struggle with how to do deal with innovation and how to creating the fertile soil where creativity and innovation can grow to the optimum.

It is not only about creating an entrepreneurial mindset that is clear leadership matter but also maintaining this spirit. Entrepreneurial leaders should continuously remind the people about their values, ethics, and their unique culture. It is about empowering people and finding the right way to do it—a good mixture between control and freedom for creativity.

This, besides individual company-related culture, should consist of a culture of sharing and supporting ideas and always giving people the freedom to follow their ideas (Hoffmann, 2020; Stricker, 2020). Entrepreneurial mentality develops in people when they are given freedom. Most of the time, this is not something being taught in a structured seminar but rather passed on even unintentionally. The best lessons are when people adopt this entrepreneurial mindset from each other and are inspired to become entrepreneurs themselves. Even if someone realizes that is not who they are or want to be, it is best to openly communicate it and change directions. It is all about adaptability, flexibility, and willingness (Klein, 2020).

Introducing an abstract methodology of being an entrepreneur within a company is nothing but another change process. It is about openly communicating the need for such a culture and finding the right people to support it. Following a specific action plan to fully establish an intrapreneurship program and generating quick wins are the next steps. With these results, the growth of the program can be achieved and scaled. Eventually, most people will be on board when they feel recognized and supported by their management and co-workers.

For innovation to thrive properly, the organization should be set up in a hybrid structure. The combination of functional and divisional organizations makes it possible to have a global research department but also have individual research and innovation labs in each business unit. That way there is no hazard of the not-invented-here syndrome. The implementation of invented products in the respective function or division is much more likely to be accepted when the own people had the opportunity to contribute, and developments were communicated regularly and openly (Mönch, 2020).

At SumUp, the structure is similar: organized in tribes and squads around the company’s missions. These organizational structures allow for innovation and entrepreneurial spirit to flourish the best. Although both companies additionally stress that everyone should be an innovator and entrepreneur (Klein, 2020; Stella, 2020; Stricker, 2020), a good structure cannot win over bad leadership, and vice versa. Leaders need to create a space for innovators within the company that is distinct from their original workplace. An intrapreneur needs to get out of his usual daily business to get into the bird’s perspective. Furthermore, intrapreneurship should not be seen as a program with an end, but rather take an infinite part in the organization. Therefore, the positioning of intrapreneurship is critical for future developments (Hutter, 2020; Stumpf, 2020). When looking into the future, according to Klein, intrapreneurship programs can be the accelerator for companies to reach their mission. “Organizations need that self-inventing drive, where you keep having innovation from within”, and this is the goal for long-term and sustainable success (Klein, 2020).

With increased focus of people to search for purpose and passion in their work, it will be more necessary than ever for leaders to create, and truly live a culture of entrepreneurship in their companies. This should be seen as a big opportunity of employer branding for existing people but also to attract great new talent with exactly this purpose: self-fulfilment, passion, and creativity (Stumpf, 2020).

6 Conclusion and Outlook

Sparking the inner entrepreneur in people has manifold proven as a highly effective practice. Freedom, support, and responsibility fuel the creativity in people’s minds thus, motivate them to gladly spend time and thought on driving the company’s mission. Top management needs to provide full support in eliminating worries about what happens if people fail, make mistakes, or spend time on creative ideation instead of their daily job.

The biggest difference between intrapreneurship in scale-ups compared to big corporations is, that big corporations have a hard time manifesting the entrepreneurial mindset and action throughout the whole company. Due to their organizational structure, traditional management and leadership thinking, change processes like this take longer and bear complications such as resistance and anxiety among people.

There is not a one-size-fits-all solution to intrapreneurship. Some implement an infinite culture of spending a specific percentage of their time on projects they are passionate about. Others set up programs like intrapreneurship batches over a couple of months and select winning projects. Again, others create an unlimited framework for everyone to hand-in ideas they came up with, collect investment, and develop products that eventually contribute to the overall company revenue. It is rather mindset, characteristics of people, maximizing their creativity by providing individual ideal work environments and identifying how well the framework fits into the company’s organizational structure.

When only looking at the innovative power and disruptiveness of business models, without doubt, start-ups will outperform big corporations. Almost no big corporation, except perhaps very innovative ones like 3M, have the grits, possibilities, and resources to pursue such great-scale innovations. That is also not what intrapreneurship is about. There will always be new and young start-ups but only around ten percent will survive eventually (Krommenhoeck, 2018). The main difference and winning factor for start-ups is speed. Start-ups and scale-ups in general have smaller teams, shorter decision processes, and overall, fewer dependencies. Therefore, they can pivot their business models in times of crisis much easier and faster than big corporations could ever do. This does not mean that large corporations cannot compete. They can, but not with the same speed and cost effectiveness. Corporate entrepreneurship will perhaps make up ten percent of innovations in general, compared to innovations coming from start-ups.

A very likely possibility for the future development of intrapreneurship is, for start-ups to collaborate more with corporations. The implicit aim when a company acquires a start-up is to make use of its innovative technology or product, and the start-up needs the bigger party to scale its business model. These intentions are mainly egoistic and lead to dissatisfaction on both sides until either party decides to quit. Therefore, it would be better if they would concentrate on creating a common space where both do not need to fully commit to becoming one, but can still profit from and help each other. Another option can be to intensify the coopetition in the areas of innovation and entrepreneurship. A regular and large-scale exchange for corporations to share their experiences in a forum would help everyone to improve their initiatives.