By Ed McLaughlin and Wyn Lydecker
There’s a fire in the belly of members of today’s corporate workforce to start their own businesses. This means that corporations have an increasing opportunity (and responsibility) to foster ingenuity within their own ranks with corporate incubators. Indeed, in today’s startup culture, the decision to incubate or not to incubate is one the corporate world must face. Corporate leaders have to decide: Do they, or do they not want to keep entrepreneurial talent in-house by offering them a chance to fulfill their dreams while fulfilling the need for innovation within the corporation? Why not create a career path for intrapreneurs? After all, 50% of something is worth more than 100% of nothing.
There are many collateral advantages to saying “yes” to corporate incubators, including retaining and developing the best and brightest, innovating new product and service lines, increasing productivity and employee satisfaction, and gaining a sharp competitive edge in the marketplace.
Here are 4 ways companies can unlock the power of entrepreneurship under their own roof:
1. Create an Internal Incubator Partnership
Corporate enterprises that focus on the static execution of their business models can inadvertently stifle innovative thinking and hamper the novelty on which entrepreneurs thrive. In Mike Templeman’s Entrepreneur article, “20 Reasons to Start Your Own Business,” he says, “We, as humans, love new experiences, but rarely can you experience a host of new things from inside your cubicle. This all changes when you are running the show.”
Through an internal incubator partnership, companies can empower employees to run their own show and transition from employees to intrapreneurs – rather than losing such talent altogether. The incubator sets them on a course to innovate new products and services and form their own businesses under the umbrella of corporate resources. This means the intrapreneur has direct access to financial support, physical space and a mentorship program from either inside or outside of the company.
This month’s Intrapreneurship Conference in New York City demonstrates the commitment and interest for developing intrapreneurship programs.
2. Become a 50/50 Partner
Entrepreneurs thrive on the rigor of a challenge and the reward of ownership for what they produce, so corporate incubators should not be modeled after the traditional R&D programs where the corporate enterprise keeps all the spoils. I suggest corporate parents become a 50/50 partner with the entrepreneur -sharing 50% of the profits and 50% of the equity. The company is compensated for fostering the incubator, and the intrapreneur receives compensation for their creation and the dignity of ownership.
3. Stop the Talent Drain
A 2014 report from the Global Entrepreneurship Monitor showed that 24 percent of U.S. entrepreneurs expect to employ 20 or more people in the next five years, which is an increase of 16 percent from 2012. This upward trend means that employees who want to break out of the corporate mold – but not necessarily run their own businesses – have increasing options to become important support personnel in new startups.
Instead of losing these employees to outside startups, corporate incubators offer them significant roles in new in-house ventures. A Workplace Deal Breakers report featured in Inc.com showed that 82% of employees who were annoyed with their job felt those sentiments because of a lack of recognition. Why not harness the creative energy these employees want to pour into their jobs and give them a reason to stick around instead of a reason to seek recognition and opportunity elsewhere?
4. Profit from Your Intrapreneurs!
Corporate parents have to let corporate kids grow up. When a venture has reached a certain level of maturity, contractual provisions should allow the intrapreneur to spin off or stay under the corporate banner. Either way, if incubator agreements are set up properly, corporations will not only profit from cutting edge products and services, they will have created alliances inside and outside their walls with the creators of today’s breakthrough products and services.
As an employee, have you been able to take advantage of an intrapreneurship program? As an employer, what has your company done to foster intrapreneurship? Let us know!
Ed McLaughlin is currently co-writing the book, The Purpose Is Profit: The Truth about Starting and Building Your Own Business, with Wyn Lydecker.
Copyright © 2015 by Ed McLaughlin All rights reserved.