From the Chrysler LeBaron convertible, which was created on a whim by CEO Lee Iacocca and outsold eight-fold its projected first-year sales, to the phenomenally successful HP pocket calculator, which company research said would never beat the slide rule, some breakthrough innovations emerge from the executive ranks.
Yet, seven in 10 of the world’s most transformative innovations – the internet, email, mobile phones, MRIs, solar energy systems, even the Post-In Note - came from employees unleashed to explore novel ideas.
“By encouraging employees to pursue internal innovation without fear of failure, leaders invite maverick “intrapreneurship,” or employees emboldened to act like entrepreneurs in pursuit of outthinking the competition,” said Kaihan Krippendorff, a business consultant and author of “Driving Innovation From Within: A Guide for Internal Entrepreneurs.”
“The need to enable entrepreneurial thinking and behavior inside your company is very well understood. There's just a lot of mythology around it,” said Kaihan, a former McKinsey & Company strategist. His consulting firm, Outthinker, has advised Fortune 500 firms, teams, leaders and “intrapreneurs” – helping organizations generate over $2.5 billion in revenue.
In this recent interview with the Center for Leadership at Florida International University, Krippendorff discusses how leaders can create the culture and conditions to encourage innovative thought and outperform the competition.
Empowerment and Intrapreneurship
Q: What impact can intrapreneurship have in an organization?
KK: Employees have historically been the primary drivers of innovation society. Seventy percent of history's most transformative innovations have come from employees. Without employees, you would not have the internet, email, mobile phones, MRIs, solar energy.
If you are an internal innovator, you want to look for problems that meet three criteria: what are problems in the world, what are problems for your company, and what are problems that you are passionate about? The trick is to focus on the problem rather than solution and to find solutions that meet those prompts.
Q: How can employers encourage entrepreneurial thinking?
KK: Three important ways to encourage entrepreneurial thinking are the need to allow people to collaborate across silos. You need to provide some innovation resources, which take both time and money. Lastly, allow people to get credit for trying something and learning, rather than only judging people on the results. You can do this through the talent you recruit, how you develop them, and the culture you create.
Q: Can you be an innovative leader and be risk averse?
KK: I heard recently that Jeff Bezos was at a conference and said that people think that Amazon is not risk averse. He said “Actually, we are very risk adverse. We just make sure we win every time. The thing is that when we fail and we've learned, that's winning.” The way to take the resistance out of risk taking in many established companies is to start valuing the learning part of the ROI. It would be almost like trying to value an FIU degree based off of the first month of a salary that you get, which is just wrong. The value of that learning is going to last a lifetime.
Q: How can you empower teams to be risk-takers?
KK: You have to overcome the entanglements that stop them. There is a psychological shift you have to make from what I call a “prove, plan, execute” approach to an “act, learn, build” approach. Prove, plan, execute says prove that this is going to work. Give me a business plan and then I will give you money to execute against that. But the act, learn, build approach is, take action, learn from that action, and then build. With new innovations, you need to take an act, learn, build approach.
Leadership Takeaways
Q: How can I help drive innovation?
KK: When I applied to McKinsey, a business coach me gave me this idea. If you’re driving along and you see a billboard, ask yourself, “How could I make that billboard better?” Then, come up with at least three ideas before you get to the next billboard.
Forcing yourself to look for opportunities to make things better gets you in the right mindset. So, get a book and write down five ways every day that you could make your company or this organization better.
Q: What are five tips for leading amid changing times?
KK: The first is to start seeing employees as the intrapreneurs. The second is throwing away your complex strategic plan and align on a simple statement of purpose. Third, stop looking for ideas in boardrooms and start looking for them at hallways. Next, stop asking people to prove their idea and let them take action in order to prove their idea. And finally, allow people to collaborate across silos.
Q: How can students today, who will soon be entering the workforce, be more valuable to future employers?
KK: They are going to need to be an internal entrepreneur. Acceleration and complexity are forcing companies to be more agile. The issue with the traditional way companies have been led is that by the time an opportunity emerges and ideas go up the chain of command, the top makes a decision, and they go back down, the opportunity is gone. Forward-looking companies need to organize in order to push decision making further out. That means that students are going to be looked to for these ideas. That's why this idea of being an internal entrepreneur is really important. You have to start as a student to appreciate how important it will be to become or be defined as an entrepreneur.
Leadership Lecture Series
You can find the full Kaihan Krippendorff Leadership Lecture, “Driving Innovation from Within: Tools and Skills for the worker and company of the future” on our archived events page.
About the writer
South Florida native Jeff Zbar has enjoyed a 30-plus year freelance career as a journalist, editor, author, and marketing copywriter. His portfolio of print and digital work appears in media outlets and for corporate clients across all areas of business and industry.