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Understanding Your Company’s Motivations as an Intrapreneur

You’re presenting to your boss today. There’s a wireless clicker in your sweaty palm. You’re conjuring up images of Steve Jobs wowing his crowd, praying you won’t be stumped by an unexpected question.

This is a key inflection point in your career. If they say yes, your payoff is three years of the thrill of building a new business, coming home tired but energized because you are creating something, changing the world.

If they say no, you head back to the daily grind.

But the true story of a corporate entrepreneur begins long before that moment. Before you secure time on the executive committee’s agenda. Before you have the idea. Before you even start looking.

If you really want to become an intrapreneur, your journey must start with intimately understanding your company’s motivations so you can predict what kinds of ideas they will support. This will tell you where to look for ideas.

You wouldn’t develop a product without first understanding your customers’ needs, so why should you develop a business idea without understanding your company’s desires? Skip this step and you are likely to end up living out that other, far more common corporate entrepreneurial myth: the dreamer with an idea nobody wants to hear.

Reasons Why Your Company Would Support Your Ideas

Let’s say there are nine reasons why your company will decide to support your idea:

  1. To leverage assets: Your company has some competency, technology, or knowledge that they want to extract greater value from by extending it into a new business venture
  2. To learn about new products or technology: Your company thinks that an emerging product or technology could become important in the future and they want to get their toe wet, gain some experience, so that they don’t get left behind
  3. To learn about a new market: There is an emerging market (a new geography or customer segment) that the company wants to get smart about so they decide to start a business in the space
  4. To build capabilities: Your company may launch your business because they recognize doing so will give them capabilities that could prove critical in the future
  5. To create an option: Your company thinks that a new business arena could become important so they want to start a business that enables them to move quickly into that arena when the time is right
  6. To generate quick and predictable financial returns: They recognize simply that the ROI on your business idea makes it a good bet
  7. To create a spin-out: They want to get a business running and then sell it to extract the value (McDonald’s, for example, launched and spun out Redbox, the DVD rental kiosk business)
  8. To hedge: They want to create new profit and value that will give them some upside in case your company’s core business fails to yield its desired results
  9. To diversify: The company wants to reduce the overall risk of its portfolio of businesses

All of these seem to be compelling reasons for your company to support your business idea. The more reasons you have, you might argue, the greater your chances of success. But some of these are more compelling than others. If you pick the wrong argument, it does not matter much how polished your pitch or how magnetic your performance; your chances of winning approval for your idea are low.

Which reasons are most compelling to your company?

Back in 2009, researchers from Indiana University undertook a major study to answer this question. Their findings can help you make a smarter choice about how to pitch your idea.

They collected information about 145 corporate ventures (businesses launched by corporations) within 72 corporations. They asked the corporate manager, who had detailed knowledge about the venture, and the venture manager, who led the day-to-day operations of the venture, what the motivations were for starting the venture.

Three reasons jumped out as the strongest motivations for companies to launch ventures:

  1. To leverage corporate resources into new business arenas
  2. To build new capabilities
  3. To generate quick and predictable financial returns

The least compelling reasons to launch new ventures were:

  1. To create a business that would be spun-off
  2. To hedge the core business
  3. To create an option

What this implies is that if you want to find an idea that has a good chance of being supported, you should not be looking for ways to hedge the core business, creating options of future businesses, or thinking about businesses that would eventually be spun off. Instead, you should be exploring ideas that leverage your company’s unique resources and capabilities, that build new capabilities that your company believes are important, and that will generate quick and predictable returns.

If you want to find an idea that has a good chance of being supported, you should be exploring ideas that leverage your company's unique resources and capabilities.

If you are pitching your business idea, your pitch should not sound like this:

If we move ahead with this venture, it will position us for success in the future. It could enable us to move into ABC new arena if that turns out to be important, it could enhance our revenue if the revenue of our core business weakens, and eventually we could spin it off as a separate company.

Instead, your pitch should sound something like this:

We should launch this business because our _____________________________ [insert key resources and capabilities] will give us a head start and competitive advantage. It is projected to return ________________________ [describe the financial return] within the next ______ years. As an added plus, building this business will enable us to gain critical skills, specifically _______________, _____________, and ______________, that, as we all know, will be critical to our success in the future.

To help you find an idea that your business is likely to support, explore these three questions:

  1. What are the key resources, capabilities, technologies that make your company unique?
    • Interview three or more senior managers to understand their opinions.
    • Read analyst reports about your company to see what investors think.
  2. What new capabilities does your senior leadership think your company will need to develop in the future?
    • Talk to your head of talent or leadership development and ask what capabilities he is seeking to build in the long-term.
    • Identify the top five trends that are shaping the future of your business by, for example, reading your annual report, reading a transcript of a speech your CEO gave, or speaking with as senior a leader as you can get an audience with. Then ask, “What capabilities must my company develop in order to take advantage of these trends?”
  3. What financial returns motivate your company? You may want to focus on long-term payoffs, but you will need to show that your idea also will produce near-term gains. Find out what key financial metrics drive your company’s decisions.
    • Look at analyst reports for your company or, if your company is not public, for public companies you compete with and see what metrics analysts follow. Are they looking at revenue growth or profit growth? Are they concerned with market share or profit margin?
    • Ask your boss for copies of business pitches or funding requests from last year that were successful. What financial metrics did they use?

Your success as an intrapreneur begins by thinking strategically BEFORE you even have your idea. By knowing what motivates your company, you can make a smarter choice regarding where to look, and multiply your chances of success.

Looking for more advice to support your intrapreneurial journey? Check out the tools below.

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