By all accounts, low engagement levels and employee turnover rates plague organizations of all sizes and shapes. In fact, recent data from Gallup put employee engagement rates worldwide at about 13 percent and estimate that 51 percent of employees are looking to leave their current jobs. These statistics have significant economic consequences, as unengaged employees tend to be less productive, and organizations are forced to expend significant resources on recruitment and training to replace employees who leave.
Even the most high-performing organizations struggle with the ability to retain and engage high-quality employees. Nevertheless, despite incredible odds, we can also see some “bright spots” – organizations that have consistently higher engagement rates and below-average turnover. Their secret sauce? These organizations promote “intrapreneurship” by encouraging employees to learn and apply entrepreneurial knowledge, skills and mindsets within their current organization. When done well, this approach increases employee engagement and retention by giving creative and growth-seeking employees opportunities to develop new products, services and business ventures – all without having to look elsewhere for these opportunities.
What’s more, there are three basic “leadership actions” taken by leaders who successfully champion this approach in their organizations: they provide the right types of leadership development opportunities, they provide the necessary resources and they enable a culture of innovation. Let’s look at each of these leadership actions in more depth.
They Provide the Right Types of Leadership Development Opportunities to Employees.
Not all leadership development is created equal, and as Deborah Rowland, change management researcher and author, notes, the most effective leadership development is experiential, influences participants’ intrapersonal emotional intelligence along with their external actions, is linked to participants’ specific contexts, and enrolls facilitators who act as guides rather than subject matter experts.
The most empowering intrapreneurship-focused leadership development experiences also specifically target the following competencies:
- Being proactive and taking initiative
- Embracing design thinking (solution-focused and oriented toward a desired future)
- Enhancing emotional intelligence, especially coalition-building skills
- Project management
- Taking risks and learning from failure
In other words, while general leadership development, when done well, adds value for all participants, leaders and managers who want to cultivate intrapreneurs in their organization also need to ensure that they are providing training that addresses these specific competencies.
They Provide the Necessary Resources for Self-identified, Employee-Driven Projects.
More than talking a good game about innovation and creativity, leaders and managers who inspire an intrapreneurial mindset put their money where their mouth is by providing the time, space and financial resources necessary to support employee-driven initiatives.
For example, at Centiva Software Solutions, a Utah-based technical services organization, developers are given two days per month to work on a project of their choice. After learning about the problems faced by a local homeless shelter, developer Blake Kohler and his team were inspired to create a software solution that helped the shelter prioritize beds for clients. After developing and presenting an initial mockup to senior management, their team was given three months to further develop the product – the offshoot of which was a new product for the organization’s commercial line.
Similarly, with Kickbox, an innovation process designed by Adobe, employees or teams with an idea are given $1,000 and instructions and tools to measure progress, along with a Starbucks gift card and candy bar (purportedly to provide the necessary caffeine and sugar boost that innovators need). To date, Adobe has distributed more than 1,000 Kickboxes to employees around the world and made the program instructions available to others under a creative commons, share-alike, attribution license.
They Design, Build and Encourage a Culture of Innovation
According to Clinton Longenecker, director of the Center for Leadership and Organizational Excellence at the University of Toledo, and Dale Eesley, director of the Center for Innovation, Entrepreneurship and Franchising at the University of Nebraska Omaha, organizational culture is the “key gateway” to intrapreneurship within a company.
In our experience, there are four defining features of this type of culture:
1. Employees are given a high degree of freedom and flexibility, which promotes autonomy and, thus, motivation.
Suzanne Smith, social entrepreneur and blogger, recalls how she started her career as a social intrapreneur within the American Heart Association: “The leadership, including now-CEO Nancy Brown, let me invent, lead teams, and grow in multiple roles within the organization.” Smith believes that by following the same approach, other organizations can better tap into their existing talent pool and especially the millennial base.
2. Employees are encouraged to test out the competition and compare their company’s product or service to products and services from a different industry.
Justin Reilly, head of customer experience innovation at Verizon Fios describes how he made the case for improving the company’s MyFios app: “On my phone, the Uber app is right beside the MyFios app. If I open Uber and hail a ride in two or three intuitive clicks, and then open the MyFios app and the experience isn’t as easy or fast, I’m going to judge Verizon Fios service on that experience. That means we’re competing against every customer’s last best experience. So that’s what we use as our guidepost to innovation and improvement.”
3. Employees are encouraged to ask questions and challenge processes.
Tim Houlne, a Fortune 500 intrapreneur-turned-startup entrepreneur, recalls that he received a lot of pushback for asking questions early in his career. Now, as CEO of Humach, an organization that provides customer contact solutions, he aims to create an culture where employees are encouraged to poke holes and rethink solutions: “As a tech startup, we must constantly look for better, cheaper and faster ways to operate; we have a culture where everyone feels comfortable presenting their ideas and innovative solutions are recognized.”
4. Employees have permission to fail (or understand which types of failures are acceptable and unacceptable).
Most researchers agree that risk-taking is a defining feature of entrepreneurs (cf, Antoncic 2003); however, one of the defining features of intrapreneurs is that they are actually more risk-averse than their entrepreneur peers. With this in mind, organizations that want to enable and empower intrapreneurs should regularly communicate that failure is a natural part of the innovation process and even celebrate failures. In situations where failure is not an option, leaders and managers need to make it explicit.
At the end of the day, there are many factors that drive high levels of employee disengagement and turnover. As leaders and managers, we often assume that these factors are entirely outside of our control, which is a mistake. Promoting and enabling intrapreneurship is one strategy that can benefit both employees and organizations. While successfully implementing all of these three leadership actions is a significant undertaking, it’s also one that organizations would do well to consider, especially if they are struggling to engage and retain high performers.