By Ed McLaughlin and Wyn Lydecker
Have you been suffering from talent drain? Symptoms include brilliant employees leaving the company, a lack of new ideas, stagnation, and sometimes even eventual corporate death. How can you immunize your company against this dangerous syndrome and keep it healthy?
The answer is to introduce a dose of intrapreneurship, more specifically, to decentralize intrapreneurship. Some companies are trying to resurrect the older model of in-house intrapreneurship via the traditional R&D department or even a skunk works. While I think that can be a strong force for basic research, pushing the bounds of what we know to be possible, I don’t think it’s the answer to keeping ongoing corporate ingenuity alive.
What companies need to do to fight talent drain is to put power in the hands of those with ideas. This requires a different, distributed approach to intrapreneurship. The following are three very specific steps that illustrate this approach to ensuring your best and brightest stay with you.
1. Recognize Talent Drain
Some turnover is bound to happen. People’s lives change. They realize they’re not a good fit for the company for one reason or another, and they move on. That’s natural. However, when you start losing promising mind after promising mind, you know you have a more significant problem.
The first step, famously, is admitting you have a problem. That takes a lot of self-awareness for any group. It can be especially difficult to come to grips with the idea that great people would rather leave – often to start up their own companies – than stay with your company. But it’s important to face reality.
The consequences of losing your brightest lights go beyond the impact on internal innovation. You may also lose customers and gain a significant new competitor – one that was started by a former employee.
2. Enable the solution
Once you’ve recognized your problem, how do you solve it? My answer is to enable your employees who want to start their own business to start one without leaving home. In other words, become an incubator by empowering people with ideas to realize their entrepreneurial dreams while remaining with your firm.
Create a system through which employees can apply for company support so they can launch their ventures and develop their ideas under your corporate umbrella. Interested employees can present their business models to a board or committee, and if the model is sound, receive funding, guidance, and an off-site home.
Starting an intrapreneurship program is a great way to show all employees that you welcome their ingenuity. Even if some are not burning to become entrepreneurs, they will feel better about being part of an organization that is honoring its employees’ intellects and ingenuity, rather than trying to suppress them.
Once you have the applications rolling in with some showing real promise, what’s next? How do you realize these ideas? What will your relationship with your intrapreneurs look like? I propose that your program look like a partnership. Share the risk with your intrapreneurs, while supporting their needs. Enable them with your resources, while holding them accountable for their results. Be a genuine partner, committing financial and physical resources to it.
Once the employee’s new business starts generating a profit, and ideal plan would be to split its profits 50/50 with the parent company. The sponsoring company could also set up terms by which it would have the first right to license any technology or other practices developed by the new venture.
If an intrapreneurial venture succeeds, you can either give it independence or keep it in the fold. Luckily, because you’ve retained brilliant minds, you’re in a position to make that decision!
My original employers could have come along on my journey to success, had they had an in-house incubator system. Don’t let the same opportunity pass your company by. Create a decentralized facility for intrapreneurship that gives your brightest seeds somewhere to bloom.
Ed McLaughlin is currently co-writing the book “The Purpose Is Profit: Secrets of a Successful Entrepreneur from Startup to Exit” with Wyn Lydecker and Paul McLaughlin.
Copyright © 2014 by Ed McLaughlin All rights reserved.