Proliferate Integration Not Products

In a previous Trackmind post, we discussed the importance of innovation, and how to do it.  However, innovation can be a double edged sword, you may be just as likely to stab yourself with it.  One example of product proliferation run amok is Royal Philips.  According to a HBR article, in the early 2000’s Philips was the top patent filer in Europe and amongst the top ten in the US.  However, by 2011 because of their complexity, created by their diverse product offerings, revenue dropped by nearly 40%.  You may be asking yourself, but product diversity is a great thing.  Product diversity allows for your company to offer fresh experiences to customers, and to prevent over investment in any one product. Unfortunately the more products you offer the costs in the supply chain, sales and marketing, development, and administrative processes become less streamlined and more expensive.  

 

These increases in overhead are also only one part of the downside of uncontrolled product diversity.  The other aspect is also how product complexity makes it difficult for your customers to choose a product.  Philips had over 10,000 IT applications, how could they react to changing customer demands, when managing their products was overwhelming.  Philips, in response to their vast complexity, began a transformation process.  They consolidated their products and began to integrate what they were offering. They originally had six fields of products, but eventually cut their fields down to one.

 

It is difficult to cut products, as that means, massive corporate infrastructure overhaul, and potentially cutting people’s jobs.  So before your company puts itself into that tragic situation, here are some steps that can help you ascertain and correct product saturation. The difficulty at which your employees and customers access your products is the best indicator of whether your company is suffering from product over-saturation.  This is why CRMs are important for your business, as they will have the means to gauge your customer’s experience.  However,  gauging employee’s difficulty with product management is more challenging to implement.  

 

One solution, and the one Philips implemented, is to integrate innovators and product managers.  For most companies, the two roles are functionally separate, they have zero interaction and communication with each other. If, and only if, you can integrate the two, then your innovators will be able to gauge when to throttle their unquenchable desire to innovate.  Not only can you integrate your workforce, but you can also integrate your products.

 

USAA is a financial service company that supports members of the U.S. armed services.  Because of their integrated product services they grew from 8 million to nearly 11 million over a four year period, and their profits rose by three percent. Originally, which would have been a multiple step interactive process to buy a car is now a single interaction process.  Instead of having to contact multiple people to asses their financial situation, the average price of cars, and what services they need customers of USAA can gain all the information they require from a single interaction with USAA.  Their system is simple and organized, making customer experience a pleasant and intuitive experience.  USAA also does not introduce a new product simply because it will be a new source of revenue in the immediate future.  If the product does not integrate into the system seamlessly they will refuse to offer it until it does. They are not the only other company that follows this practice, ING Direct Spain delayed a product for a year until they fixed the systems that delivered it.

 

The simplest, and cheesiest, answer to product over-saturation is actually deciding on a clear vision.  This sounds self explanatory, and very nose on face, but it is through this decision that innovators will be guided and not need to be lead by that same nose.  A great vision will not only guide individual projects, but also help the management team make decisions on expanding and defining company infrastructure.  Ultimately a vision should help determine if a project is truly valuable or determine if it will make a complex mess.

 

With these guidelines you can prevent your company from becoming too saturated with products, and make sure your growth is a healthy one.

 

How to Develop Your Data Strategy

For the first time in human history the annual amount of internet traffic surpassed a zettabyte of data. According to an article, by Harvard Business Review, that is the equivalent of a hundred and fifty million years of HD video. With this unfathomable amount of data being processed, it has become vital for all businesses to develop their own strategies to maximize profits from data. The question though, is where does one start to develop a data strategy?

 

The first notion you must grasp is that you will have to understand your company’s data needs. The traditional dichotomy of data strategy is offensive vs. defensive. Offensive data strategy is the far more interesting of the two, with its ability to make predictive models and allowing companies to target new markets. While defensive strategy is about data security, consolidation, and reducing overhead. Now you may think you can split your company’s focus evenly between the two, but that would be a mistake. It would only serve to make both goals flounder, and not deliver the desired results. So to prevent your company’s floundering it is important to understand how your company’s data works and the restrictions you must work within.

 

To determine if you need a defensive approach you should ask yourself these questions. Does my data fall under strict regulations such as banking or hospitals? Do you need a standardized, and reliable, source of data that is easily extractable? If you answered yes to either of these questions you should focus on a defensive data strategy by developing a single source of truth system architecture, which will reduce overhead and make it easier to control the flow of data.

 

If you are not heavily regulated and are looking to grow through targeted expansion, then an offensive digital strategy is the best option for your company to focus on. Offensive strategy focuses on extraction of insight from consumer data, and as such it needs to have more flexible data. This allows the data to be more easily manipulated to produce results. As such a multiple versions of the truth architecture would be most beneficial to develop.

 

To balance the creation of the two strategies is difficult, but by focusing on a defensive strategy first, and consolidating your company’s data, you will have a reliable infrastructure. From there you can then build out an offensive strategy, and allocate more of your company’s resources to growth. It is easier to build out once you have control of your data then it is to consolidate when you have aggressively expanded and your data sources are all over the place in your network. HBR suggests by allocating 90% of your data budget to building a SSOT to start, and only allocate 10% for expansion. After you have developed a reliable data architecture, your company can then slowly move into the direction of an even allocation of resources. A tactic that is recommended, to maintain control for expansion, is to assign a specific CDO, Chief Data Officer, to each project that uses a different source of truth, in order to maintain data integrity.

 

Data strategy is no longer an avenue for your business, it is the avenue. With these basic guidelines, implementing and managing a data strategy will be easy as pie. Next post we discuss the heretical notion that too much innovation can be bad.

Innovation Now

The old proverb, necessity is the mother of invention, still holds true today in the modern digital landscape. However, is necessity and invention enough? This is being reactive, and waiting for a trend to have already arrived. What your your company truly needs is innovation, and today we will go over what its mother is. In order to be digital capable, your company will need to make innovation a priority, and to do so you will need to build the right culture for it to grow.

 

As discussed in earlier blog posts on Intrapreneurship, the first step to innovation is to create a culture around the idea that it is ok to fail. Your company will never be digital capable if it cannot fail in a controlled manner. That means setting up an infrastructure in which innovation is widely and purposefully mentored. At the same time though it is necessary to change the approval process. A traditional project approval process requires an employee’s idea to be approved by everybody in the chain of command. This practice leads to a culture of stagnation as only one no can stall a new idea. As a result, employees will not be willing to bring new ideas forward. In an article, by Forbes, Amazon directly squares off against the traditional hierarchical structure of project approval. Instead of sending a project up the corporate ladder, where even one no can derail it, Amazon basically allows any project to be green-lit by any member of the managing team, assuming they have the resources. This creates a culture that is innovative and will allow for your company to constantly meet the needs of the ever changing digital landscape.

 

With all these projects being approved there must be some means to safeguard a company’s assets. Amazon has also found an interesting solution that also encourages its employees. They call il working backwards. The general idea is to design based on customers’ interests. Basically anyone in the company can create a new product, but they must be willing to really think about it in all manners, not merely from a tech perspective. Their employees must create a proposal that has a mock press release, a six page FAQ, and a more detailed description of the product, even going so far as to make a mock prototype. Then when they bring it forward, they are greeted with a certain initial rejection. This seems counter intuitive to creating a culture of innovation, however the no is a soft no. Instead, Amazon’s no simply means great work but reiterate it. Very few of the initial project proposals get approved on their first try, but by forcing the creator to go back and work on it some more, regardless of how good it is, Amazon eventually approves nearly 50% of its employee’s ideas for development.

 

The final example of innovative culture building, that Amazon incorporates, is its ability to develop capabilities regardless of the company’s current strength in the capability. Initially amazon was an online bookseller, now it sells everything online in a timely and customer oriented manner, but it doesn’t just stop there. Amazon is also one of the world’s leading cloud based computing companies, not even remotely related to book sales. Originally their cloud computing was designed to be used as a scalable infrastructure for their own website. However, by establishing this new capability, that may not necessarily been a strength immediately, Amazon was able to create a service out of it that not only reduced costs within its own company, but also made profits as a service to customers.

 

Amazon is a fantastic example of digital culture building, but culture is only one part of being digital capable. Next blog post will discuss what technological capabilities you might consider to get your digital integration off the ground.

Are You Digital Capable Pt. 1

In a previous blog post  we gave you the tools to kickstart your digital enterprise.  This week we will go over the necessary capabilities/positions to make sure your enterprise doesn’t become the next Yahoo!  Talent is the most important aspect of digital integration, it takes time to develop the necessary skills to be successful, and it takes determination as you must constantly adapt to the newest digital trends.  Below we will discuss what roles you will need, and what capabilities they will need to posses.

 

There are countless positions you can hire, depending on your current level of digital capabilities, but the most necessary, in the accelerating climate, is the Digital Transformation Leader.  Digital Transformation Leaders work directly with management teams, and lead the effort that will handle your digital evolution.  Successful transformation leaders have the right blend of design, technology, and business acumen.  It is their responsibility to build a roadmap and define the metrics that ultimately determine how your efforts are shaping out.  They become the champion within your organization and are responsible for developing the overall roadmap of your transformation.   Ideally they need to have a strong internal network that allows them to find the right talent in-house, talent which is suited for the task.   

 

On the technical side a Digital Architect will be your most valuable player.  Digital architects will handle the enormous task of designing your digital enterprise.  While the Transformation Leader handles the general strokes, or the vision, the architect is responsible for the minutia and creating the blueprint for your digital services. They will gather and provide the technical requirements and design the infrastructure necessary for your digital services to be functional. With customer experience in mind, they will shape your digital services in order to increase profitability, revenue, and ultimately give you the edge in the ever changing digital landscape.  Since they will be focused on customer experience, they will need to be versed in many fields in order to best meet customer needs.  Like a general contractor the Architect must be well versed in various technologies but they should also have a strong internal and external network so that they can onboard the best resources.

 

The vendor manager, a traditional position has had new life breathed into, and  because of the digital revolution it is being elevated to a new position, the Partner Relationship Manager.  To build your company’s digital capabilities, a great deal of technology and services will be required, and the person responsible for acquiring all these resources will be the Relationship Manager.  Before the digital revolution the manager used to be a static position.  However, the Relationship Manager is now a dynamic role, that must adapt to the ever changing needs of your company’s digital products.  For example, with the modern iterative cycle of software development, a Relationship Manager will need to scale the resources after every cycle, which means that they will need to ensure flexible contracts with vendors that can be altered depending on the projects constantly changing needs. Also, as their projects develop, they will need to onboard new talent, whose skills meet the needs of the project,and because of the ever shifting requirements, for your products, their contracts’ length will need to be flexible.  The Manager will need to be meticulous as they will have to organize all the documentation for the contracts, and make sure that all vendors/service providers are paid in a timely fashion.  Also, to help the Manager with their dynamic role, a digital onboarding system will be beneficial.  The onboarding system will ease the burden of the Partner Relationship Manager, and save your company the cost of having to pay for hair plugs, when your Manager loses their hair from stress.  If you are interested in more on the subject this article by Forrester is a great place to start.

 

These positions are just the start for your digital infrastructure.  In order to truly become digital capable you will need the right culture to make certain that your talent lives up to its full potential.  

 

Next week’s blog post will discuss why culture, and mindsets, matter to your digital capabilities.

Digitize Me Captain

A prosperous business should be adaptable, but how can a business be adaptable when emerging technology cycles occur at an accelerated rate.  Even forward thinkers are baffled by the necessary skills and capabilities required to maintain a competitive edge in the digital market.  Emergent trends such as Big Data, IoT, and social media require digital capabilities and  adaptable talent in order to be an asset to an enterprise.  However, according to an article from Forbes, only one out of eight digital integrations are successful.  In order to not be one of those seven other companies, we have  highlighted throughout this article the high-level methods in which to acquire both the necessary capabilities and talent.

 

In order to disrupt the natural order of your company, to gain modern digital capabilities, you will need to come to the conclusion you cannot do this by yourself.  There are too many specialized fields to create them all in house, and there are no feasible means to acquire the talent, to make these new capabilities effective, at least at first.  In a white sheet, published by Capgemini, 4.4 million IT jobs will be created around the field of Big Data by 2015, but only a third of these positions will be filled.  If it is not possible to fill the the roles that you need then how do you proceed?   The first order of business is to understand your business needs.  How do you want your company to grow digitally, what tools will you need for digital expansion, and what personnel will you need to make your tech succeed over the competition.  By understanding your company’s roles you will be able to strategically select the right people and tech while minimizing waste.

 

However, even after understanding your needs, you will still need to acquire the people and tools necessary for your digital growth.  Some will need to be hired and created in house, others will need to be contracted.  Traditional business models tell you to create cost efficient all in one contracting packages that last forever, but that will not work for the accelerating digital market.  Instead more diverse, and scalable, contracts will be necessary, in order to meet your company’s constantly changing integration needs,. In other words, the 1099 economy is what you need.  This will allow you to acquire the tech, and infrastructure you need, rapidly, and when it no longer suits your needs you can change contractors without feeling the weight of a long term cost.  Also, Sharing the financial burden/reward with your contractors will both improve your relationship, and increase incentive to adapt to your ever changing digital needs.

 

Furthermore, to hire in house talent, unconventional methods will be necessary to recruit.  According to an article, by McKinsey, competitive pay is important, but it will only get you so far, as great digital talent is flooded by recruiters, and mostly likely your HR department will not be able, or have the resources,  to handle the unique task of recruiting this digital talent. Your company will need a  message, or direction, that attracts the top talent, and you will need an envoy to share that message with your prospective hire.  The best recruiters, of digital talent, are those who already have a reputation in the field.  Talent attracts talent, and if you want the best new talent you’ll need to have a pinnacle in the field to draw them in.  This will guarantee that not only are you getting the best new personnel, but that they are excited by the prospect of working with the best.

 

With these high level steps your business, and with the help of Digital Strategists like the folk at Trackmind, will be able to grow exponentially, and keep up with the rapid field of digital advancement.  Next week we will discuss the top positions you will need, if you want your digital enterprise to succeed, and what they offer and how they will interact with each other.

Will Your Tech Succeed

When creating  new technology, it is not only the technology that is important, but also  the underlying ecosystem that driving the technology that fundamentally determines its success. Ecosystem factors determine the rate of acceptance for a new technology, and when a new technology is competitive against an older entrenched tech, the new technology’s acceptance rate will be hindered.  How do you determine at what rate your tech will be accepted? How do you determine if it is the right time to deliver your tech to the world?

 

The article, “Right Tech, Wrong Time” by Professors Ron Adner and Rahul Kapoor,  explores the different ecosystem factors that contribute to acceptance rates. One factor is whether a technology’s installment base is dependent on other technology factors. They call this “overcoming ecosystem challenges.”  “Right Tech” uses the example of HDTVs.  The technology had been in existence since the early 80’s, but was unable to be accepted until broadcasting technologies were able to catch up.  Whether an existing competitive technology has innovation ecosystem potential is a contributing factor to tech acceptance rates.  Adner and Kapoor’s example is of the barcode.  Though a new, more advanced technology existed, the barcode is still the dominant tech as its capabilities have expanded, moving from instantaneous price points at the register to accumulating aggregate sales for business strategies.

 

The two professors divide the potential acceptance rates into 4 categories, or quadrants as they present their data in graph form. The first is Creative Destruction,where the incumbent technology has low ecosystem extension and the challenge of creating a new acceptance ecosystem is low.  In this category, acceptance rates of new tech are at their highest.  Robust Resilience is when the two factors of creative destruction are reversed.  This is by far the hardest ecosystem for a new technology to grow, and will have the lowest acceptance rate. Robust Coexistence is when the new technology’s ecosystem challenge is low and the old technology’s ecosystem has opportunities to innovate.  In this situation the two technologies are both growing at the same rate. However, the old tech will eventually be replaced by the new. The final category is the Illusion of Resilience.  This category is when the old tech has very little life left in it but the new tech is still waiting for the infrastructure to succeed.  In this position, the new tech will rapidly dominate the old tech as soon as the infrastructure is in place.

 

To examine what category your tech falls into, the professors present six different questions to help analyze your tech’s acceptance rates:

  • What is the execution risk–the level of difficulty in delivering the focal innovation to the market on time and to spec?
  • What is the co-innovation risk–the extent to which the success of the new technology depends on the successful commercialization of other innovations?
  • What is the adoption-chain risk– the extent to which other partners need to adopt and adapt to the new technology before end consumers can fully assess its value proposition?
  • Can the competitiveness of the old technology be extended by further improvements to the technology itself?
  • Can it be extended by improvements to complementary elements in its ecosystem?
  • Can it be extended by borrowing from innovations in the new technology and its ecosystem?

If the analysis of your tech ecosystem, though these questions, has more positive factors than negative, then it may be the right time to market your technology.  However, if after answering your questions there are more negative factors from the robust ecosystem of the old technology then it would be financially prudent to slow the progress of your tech, before expenses become too burdensome.

Why Customer Experience Matters

Application market growth has created a renaissance in product development.  Companies’ foci are shifting from building physical products to sell, to  focusing on the development of electronic apps. The average cost of developing an app is $6,453, but can also go as high as $150,000, according to Alex Ahlund’s article for TechCrunch, Ahlund was the former CEO of AppVee and AndroidApps.

The profitability of an app is proportionate to its functionality and its design.  If two apps that perform the same function hit the market at the same time, who will be more successful? In every case, the app that has the better user experience will outperform.  According to the Design Management Institute’s research, funded by Microsoft, “2015 results show that over the last 10 years design-led companies have maintained significant stock market advantage, outperforming the S&P by an extraordinary 211%.”  Also, a $10,000 dollar investment in design-oriented companies will have a greater return than the S&P by 228%.  With the growing importance of design-based development, it is no longer efficient to have separate development and design teams.  It is now necessary to incorporate both to create a more efficient and streamlined user experience.

The three main components and design teams, within customer experience are User eXperience designers, or UX, User Interface designers, or UI, and product designers.  UX designers typically focus on how to make the product as efficient and simple as possible for their users.  They primarily want the app to have a good feel about it. UI designers focus on the general aesthetic of an app, or how it looks to the user’s eye.  The product designer is more of a catch all term, but they primarily focus on how to balance the UX/UI experiences.  They are the proponent of user’s desires.  In traditional developmental style, each of these designers focus on a specific task for the creation of the product separate from the development team.  However, having a decentralized design can cause problems.   According to Nick Babich’s article, “The Evolution of UI/UX Designers Into Product Designers” presented by Adobe, if a product is designed in isolation it could become unusable by consumers.

By merging development and design teams into one focus you create new benefits, according to Babich.  The first is by collaborating the team will be able to “think wildly” as they will have different perspectives, and will not have to worry about confirmation bias.  Also, this collaboration will allow for a larger critique early on in the developmental phase so that when refining the product, it will not become impossible to use.  This will make the methodologies of your design team “agile” and “lean” according to Babich, and will develop cross functional skills between the whole team.  The cross functionality of user experience integration will be beneficial to a larger company, but even more beneficial to a small startup or Intrapreneur who are limited in resources and staff.

Another issue that user experience integration is essential to solve, is the constant developmental cycle after a product has been released.  With app development, unlike physical product development, the process of refining never stops.  As soon as you put out your prototype on the market you must then create the next build of your product–which must be more efficient, and simpler.  User experience integration will allow for a constant refinement that will not slow down the next build, as the developmental infrastructure will already be in place to continuously refine your app on both the front end and back.

Whether you are a Fortune 500 Company or a fresh startup, user experience development integration will return your investment many times over. Changing your developmental mindset will place you ahead of your competitors.  For the application developer this is crucial.  Next week the Trackmind blog will delve into the question on whether or not it is the right time for your tech.

The Top Methods to Foster Intrapreneurship Pt. 2

This is part two of the top methods to foster Intrapreneurship.  

Last week, we demonstrated several ways  to create the culture necessary to foster Intrapreneurship and to make sure that the creation of such an environment does not create a kink in the flow of your company’s progress.  Today we will demonstrate how to best facilitate the creation of projects for the young Intrapreneur to take charge of and how to properly motivate them through recognition.

 

5.    To foster intrapreneurial projects, develop a system of goals that must be met to proceed to the next stage of development–but leave it up to the Intrapreneur to determine how to meet that goal. Chamberlain reported that Adobe’s initiative resulted in an, “Increase in innovation quantity, quality, and speed across the organization.” Creating achievable but difficult short term goals for your Intrapreneurs will not only make them more engaged, as the difficulty of the goal will provide them a satisfaction upon completion, but it will also give them the confidence to move forward with their idea.   Pavlov might have been onto something.

 

6.  Recognize when an Intrapreneur accomplishes a goal.  While recognition is a trait Dr. Zak’s article promotes in trust building, it is also highly beneficial for Intrapreneurial development.  How do your employees know they are succeeding unless you give them positive feedback?  Recognizing success is important, but not nearly as important as recognizing failure.  Instead of admonishing failure, celebrate it.  If you can learn from failure, while developing the Intrapreneurs’ ideas, then your company has grown.  This is just as valuable as being successful financially, because it will eventually be beneficial when you do not make the same mistakes again.  When your  Intrapreneurs’ goals fail, as some ultimately will, you will be able to set new goals in the future based on the data collected through previous failure. And by keeping those goals short term, the failure will not be as burdensome to your company. Recognizing failure and success are only part of the process.  In order for failure to succeed, an environment must be created where the Intrapreneur can have the tools to learn from failure, and not be afraid of failing either.  One way to validate the efforts of Intrapreneurs is to create a system of rewards for learning.  Create contests for best results, or most beneficial failure, that give either a monetary or fun prize. For example, Intuit rented their most valued employee a high-end sports car for a week.  Also, be sure to get your entire company involved.  Do not just leave recognition to the executives and managers.  See who the people on the ground floor think deserves recognition.  Not only will it give you a different perspective, but it will also engage the entire company in the process.

 

7.   Have your employees be responsible for the progress of their project. Treating all employees like adults will not only build trust, but it will also put the person most knowledgeable about the project in a position to direct it to the most desirable outcome.  Allowing the creator of the product to be responsible will not only be more efficient for the project but it will also develop entrepreneurial skills of the employee directing it.  This faith in the employee will create a bond between you and them.  However, if you do not foster a high trust culture, you will still have low employee retention rates.  Even companies like Google and Amazon, whose cultures highly foster young Intrapreneurs, have some of the highest turnover rates and youngest average ages.  So by fostering a culture of trust and engagement your company has the potential to drop its turnover rate by 50%, according to Dr. Zak’s article.

 

8.  Encourage your employees to pick projects they are interested in.  Valve, a digital gaming distribution company,  has all their desks on wheels.  This ensures agility so an employee can work on multiple projects simultaneously.  When they are needed for a specific project, Valve employees can just push their desk to where they are needed and have all their tools at their disposal, instead of having to make multiple trips to gather supplies.  In addition, Valve encourages their employees to pick projects that excite them, and because they are on wheels they have spent less time transitioning between projects.  Valve want to keep their employees motivated by allowing them to pursue their creative desires. Now a complete lack of restrictions would be chaos, but your company could circumvent this problem by adapting a weekly employee meeting that allows for the ideas of Intrapreneurs of your company to be presented.  This meeting would allow for employees interested in creating, but not necessarily ready for their own ideas, to gain experience and for them to be engaged.

 

Following these eight steps is a fantastic first step to pioneer Intrapreneurship in your company.  Within months you will notice an increase in wellbeing, productivity, and profit.

The Top Methods to Foster Intrapreneurship Pt. 1

As discussed last week, Intrapreneurship is the practice of bringing ideas to life within a company. This week, we will be showing the best methods to create the ideal environment for the Intrapreneur to prosper. Today’s post will be the first part on the top methods for successful Intrapreneurship, and will focus on establishing the proper culture and infrastructure for Intrapreneurship to succeed.

The act of encouraging and establishing a culture to support your young Intrapreneurial workforce can be difficult. How do you change a stable structure and culture that has served to grow your company and its profitability, so you can foster the innovation of the Intrapreneurial spirit? There are a number of methods to make sure the Intrapreneurial spirit succeeds in your company

1. Trust is the first step. Creating an environment of trust has so many beneficial properties that it alone will increase your company’s overall well being and profit. In Dr. Paul Zak’s article, “The Neuroscience of Trust”, he maintains that trust is a measurable metric that will always benefit your company. A comparison between high and low trust companies revealed that high trust companies had:

  • 74% less stress,
  • 106% more energy at work
  • 40% less burnout
  • 13% fewer sick days
  • 76% more engagement
  • 29% more satisfaction with their lives
  • 50% higher productivity

A fifty percent increase of productivity is astounding. Employee well being, through a high trust environment, not only guarantees productivity, but also creates great public relations as 88% of employees would recommend the company to family and friends. In Dr. Zak’s article, he explains the Eight managerial traits necessary for trust to grow. The two traits that companies’ managerial staff scored the lowest on were the ability to recognize excellence and the ability to openly share company information. If your company starts experimenting with these two traits, by incorporating them into your managerial staff, you will see the greatest return, and from there you can begin to incorporate the other six traits.

2. Build an infrastructure, alongside your current one, designed to support and mentor your Intrapreneurs. This may seem unnecessary, especially if you already have a perfectly functioning infrastructure. However, companies who set up a defined system for their Intrapreneurs to succeed saw the greatest results. As discussed last week, Intuit created positions whose function was to mentor the young Intrapreneur. That is a great first step. By having mentors who imbed trust and responsibility into their young employees, while imparting them the skills necessary to succeed, you will have developed a wide base for agile growth in your company’s future, while still maintaining the corporate culture that made your company great to begin with.

3. Set aside funding so that the ideas becomes reality. Marion Chamberlain’s article, “How to Drive Intrapreneurship Within Your Business to Create Truly Great Innovation”, describes how Adobe changed their methodology for funding innovation. Instead of spending millions on a limited number of projects, they used their red box initiative to fund hundreds of projects with smaller amounts. Typically Adobe placed 1000 dollars in each red box, in addition the vital candies and coffee. What great endeavor could succeed without sugar and caffeine? Just as you diversify your assets portfolio, you can diversify your innovation. Intuit also follows this model as they help their employees develop a “product of one”. This “product of one” is a prototype that is designed for a particular customer. If the product is successful, Intuit will scale with the product as it succeeds.

4. Encourage scavenging. Your company is going to have underleveraged resources. By encouraging scavenging, your young Intrapreneurs will capitalize on resources that have been overlooked. Not only will this make underused assets useful, but it will also develop non-traditional problem solving skills that will further lead to unexpected innovations. However, you should not constrain your Intrapreneurs to either a seed fund or a scavenging mentality. Professor Samuel Bacharach of Cornell University, and of the Bacharach Leadership Group, examines how Intrapreneurship can succeed in his article, “Developing and Retaining Your ‘Intrapreneurs’” The seed fund shows trust in your employees and gives them an initial boost to their idea, but in business you can not be constrained by what resources you initially have and must look to other methods to solve problems. So by setting aside seed funds and encouraging scavenging you will tackle developmental constraints from multiple angles, and generates motivation.

While these methods are only a fraction of the many your company can employ to create a successful Intrapreneurial culture, they will begin to generate the results you desire and advance your company’s goals. Stay tuned next week for part two of the top methods to foster Intrapreneurship–where we will go in depth on how to properly recognize your Intrapreneurs and how to organize the creation of Intrapreneurial projects.

Prosperity Through Intrapreneurship

With a stifled economy, and an unfulfilled young workforce, companies are looking inward to solve these growing problems. The solution may be far simpler than you could possibly imagine, and surprisingly cost effective. To both generate new sources of revenue, and retain young talent, companies are turning to the concept of Intrapreneurship. A basic definition of Intrapreneurship is the practice of fostering innovation in your employees by allowing them to create new products, but it has so many far reaching effects that this definition does not do it justice.

Being an entrepreneur is a high risk high reward enterprise, but being an Intrapreneur is a low risk high reward enterprise. Instead of putting your own assets into jeopardy, by founding your own company, an Intrapreneur will take the resources of their parent company to accomplish their goal, whether it is an innovative new product or new methodology. Fostering Intrapreneurship does not generate wealth for your employees, but it will develop the skills necessary to eventually start their own companies, if they so desire, or become a leader in the company that fostered them. By allocating a small margin of your company’s resources, and time, you can create bonds that will retain workers for longer periods of time, increase efficiency, and ultimately profits, without sacrificing your reputation in the growing social network.

In an article by Simone Ahuja, Ahuja describes how Intuit experiments with Intrapreneurship and their process. Her article begins with the underwhelming statistics, from an Accenture study, that only 20% of employees feel their managers encourage entrepreneurial endeavors, and that 70% of entrepreneurs that developed their ideas in-house then took their idea outside of their parent company to commercialize. This is a correlation that cannot be ignored. If the companies had instead made small investments of time and money in their employees their employees would have commercialized their ideas in-house.

As explained in Ahuja’s article Intuit not only experiments with Intrapreneurship but they have a formula for it to succeed. Employees are encouraged to spend their own time to develop ideas that can be marketable, but still perform their regular position. Then, when they think they have a solid idea, they are told to create a single prototype for a specific customer and see how well it works. If successful Intuit will then scale up, but if not, there are no repercussions as long as the company and the employee have learned from it. Intuit founder Scott Cook encourages failure through learning and calls it “falling in love with the problem, not the solution.” To help guide, but not control, Intuit has set up several different positions that are meant to mentor these young Intrapreneurs. Some of these mentors allocate ten percent of their time to help develop the Intrapreneurs’ ideas, for others though it is a full time position. Though there are mentors, whether an idea continues or has the plug pulled is entirely up to the employee behind the project. This demonstrates trust in the employees and allows for them to grow as their ideas grow.

Now you may be wondering why waste time and resources to fund young Intrapreneurs’ ideas. Well, according to a Gallup article, by Jim Harter, a study of over 80,000 organizations showed that when employees are engaged, by methods such as Intrapreneurship, profitability and sales increase by twenty percent. There are other benefits to Intrapreneurship, that will be discussed on a later posting, but by putting less than ten percent of your company’s resources into new ideas you will be getting more than double on your return and that is a figure to investigate. Some companies, other than Intuit, that are pioneering Intrapreneurship are the folks over at Facebook, Lockheed Martin, and Google. All of these companies are leaders in their fields and examples of how successful fostering innovation can be. Next week the series will discuss the right conditions necessary for Intrapreneurship to succeed, and if this methodology is right for you.