Intrapreneurship Vs. Entrepreneurship: What’s It All About?

In times of uncertainty (VUCA), many organisations are looking for stability and orientation with a clear dimension of responsibility. New paradigms and concepts such as “intrapreneurship” are being developed, which encounter contradictions and dilemmas in organisational and personnel development. How much responsibility can an employee assume when the organisation threatens to let go of an aspiring “intrapreneur”?

Many organisations are searching for stability and orientation especially in these times of uncertainty which is particularly brought about by digitalization. A clear dimension to manage uncertainty is no longer in the permanent control of employees, but rather in taking responsibility.

This new perspective creates new paradigms and new terms such as “intrapreneurship”, a word coined out from “intra-corporate” relating to internal (in-house) activities, entrepreneur and entrepreneurship. Strictly speaking, these terms lack a definite definition.

Intrapreneurship Today

The “intrapreneur” is an employee who serves as an in-house entrepreneur. He works on his own responsibilities, is creative, resourceful, team-oriented and has leadership qualities. “Intrapreneurship” thus describes the entrepreneurial behavior of employees in companies as well as in public institutions and administrations.

Intrapreneurs work independently if they come up with ideas that fit well within a particular framework. However, they also run the risk of being overwhelmed with responsibilities and work longer hours. Today, the term “intrapreneurship” has been expanded and is also understood as a way to give employees more freedom and development space for themselves and to develop new products or services and to ensure that they stay in the company.

Contradictions and Dilemmas

The term “intrapreneurship” encounters many contradictions and dilemmas in organisational and personnel development. How much responsibility can an employee take on himself without being overwhelmed? When does the organisation threaten to let go of an aspiring intrapreneur? How do you staff intrapreneurship? How much does one offer to keep an intrapreneur?

This contradiction is an inversion of the term. An often quoted example of intrapreneurship is Tony Fadell, who failed as an entrepreneur but successfully created the iPod as an employee at Apple which later became the foundation for the streaming service iTunes and thus caused a disruption in the music industry.

Entrepreneurship

The definition of the term “entrepreneur” is also quite complex and multi-layered. It can be a dazzling personality, as well as a visionary, an eloquent manipulator or a lone fighter. In the economic sense of the word, it is often translated as company founder. But that’s not completely accurate either. The British economist Richard Cantillon understood the entrepreneur mainly as a risk taker with income insecurity. Later, Joseph Schumpeter expanded the term. Above all, he saw the role of the entrepreneur as one who produces new combinations. Create new combinations and unlock a door of endless opportunities for innovation.

Examples of people who fit in this definition are: Steve Jobs who combined functions such as telephone calls with the media and the Internet and Nobel prize winner, Dr. Muhammad Yunus who linked economics with the idea of enabling social change and innovation. Apart from the fact that these entrepreneurs had a great vision (technology improves coexistence, economics can solve humanitarian problems), their approach and way of thinking, change and innovation made it possible.

Today, there are more avenues to understand intra and entrepreneurship not only from the outset (i.e, not only from the description of a person), but from the corporate goals and the entire organisational strategy, in an uncertain and extremely fast manner to be able to successfully assert a changing time.

The 5 Dimensions of Entrepreneurship

During his time, Schumpeter defined entrepreneurship across five dimensions:

1. Launch new or modified products
2. The use of new, not-yet-proven methods of marketing
3. Open up or create a new market
4. The acquisition of new ways and resources for the production of products
5. Create new economic structures, e.g. by changing monopolies (changes in postal and transport, railway and taxi industry, telecommunications, etc.)

Therefore, entrepreneurship was always an extensive approach and never excluded intrapreneurship, since the term went far beyond the founding of companies.

Practical Impacts on Organisations

How does this impact organisations in practical terms?

1. A clear definition of terms helps to effectively initiate and implement intra and entrepreneurship processes.
2. From our experience, it helps to personally understand what intra or entrepreneurship really means and not as a vague or stereotypical definition which is often misconstrued.
3. Intra and Entrepreneurship can therefore fulfill its function in an organisation, create strength and freedom for intrapreneurs and promote innovation.
4. It creates the opportunity to understand intra and entrepreneurship not only from the outset. They can be understood in terms of their effect, and thus be oriented towards the goal, purpose and the organisational strategy.