Need your people to help to solve business challenges? Then you’ll need to create a culture of intrapreneurship.

In the late 1980s, Ken Kutaragi, an electronics engineer at Sony, was watching his daughter play games on the original Nintendo set when it dawned on him: what if Sony could engineer a gaming console and enter the video market?

He approached his executive team with the idea, but was told that Sony wasn’t interested, so he secretly worked with Nintendo on the side to see his idea come to life. 

When his Sony bosses caught wind of this, they were on the verge of firing Kutaragi, but instead decided to take a chance on his idea and sponsored him to continue pursuing it. 

From this, the PlayStation was born, and Kutaragi went on to become the CEO of Sony’s gaming arm, shipping 100 million PlayStations within a decade.

This is a stellar example of intrapreneurship – the act of harnessing entrepreneurial skills within an organisation to drive creative solutions. It demonstrates that some of the best ideas are often dreamt up by employees, rather than coming from the top-down.

Andrew and Gaia Grant, founders of Tirian Innovative Solutions – a consultancy that specialises in facilitating transformation through strategic innovation – have helped plenty of companies to turn their people into intrapreneurs by working through the design-thinking process.

The design thinking model

“Companies often need a mindset change to create a more innovative culture,” says Andrew. 

“When leaders participate in the design-thinking process, as well as their teams, employees then respect that this is something everyone needs to take seriously.

“If everyone feels that creative thinking and innovation is their responsibility, they embrace every opportunity to explore ideas that can impact the whole company. 

“That’s what creates a culture that drives intrapreneurship,” says Andrew.

A key advantage

At a time when employees are seeking opportunities to develop their own ideas, supporting them to innovate could grant employees greater autonomy. And it might help to retain them, too – especially in light of Microsoft’s Work Trends Index 2022, which found that 70 per cent of Gen Z and 67 per cent of Millennials are seeking to pursue a side hustle this year.

Holly Ransom, Australian entrepreneur and founder and CEO of strategic advisory firm Emergent, has increasingly observed more organisations offering these sorts of opportunities.

“A core part of the workplace landscape at the moment is that people want to be empowered,” says Ransom. “The opportunity to re-engage people by providing them with new opportunities is boundless.

“Providing scope for intrapreneurship says to your employees: How do we unleash your talents and capabilities and give you an opportunity to grow, play and learn?”

Bringing in a third party can push a company to look beyond its own four walls.

“Entrepreneurs can help your top performers workshop their thinking and take ownership of a new initiative. Something new being injected into the mix can be the catalyst needed to get an idea going.”

Looking beyond your own sphere to seek external perspectives is vital, but it’s just as critical to address internal processes.

“Have conversations with people where you’re asking them to share an out-of-the-box idea they’re thinking about, or ask them how they would solve a problem the business is facing.”

Explorers and preservers

To allow creativity to surface, leaders need to build cultures that celebrate innovation from the get-go. But it’s not as simple as asking employees to come forth with their ideas.

Gaia, who is also a lecturer in the Work-Integrated Learning Hub at the University of Sydney Business School, which teaches young people skills to problem-solve challenges and become intrapreneurs, has researched the process of embedding a culture of innovation.

One of the most interesting principles is the dual model required for innovation, she says. 

“Typically we think of innovation as being about risk-taking, but innovation is not just about the breakthrough of new ideas and encouraging people to think independently – which can be referred to as ‘exploration’ – but also about incrementally developing the structures that will support innovation in the long-term, which I have labelled as ‘preservation’.”

For creative ideas to thrive, employers need the right mix of exploration and preservation.

“Explorers push the boundaries, but, at the extreme, you can push so far into the future that you’ve forgotten about maintaining what you have in the present. 

“Preservers are also needed to help maintain and build on the values that support sustainable innovation, but at the extreme they can become rigid and stuck in the past. 

“Some individuals jump straight into creative thinking, while others will struggle. The preservers still have a critical role because they’ll analyse a grand idea and think through its implications.”

The preservers turn a vision into reality, helping to implement tangible steps that ensure ideas have follow-through, she says.

“You want flexibility, but too much of it means you won’t come down to earth with any specific approach. You need to be able to embrace both.”

Precursors for innovation

So how can organisations create an environment that encourages exploration while establishing guardrails?

Andrew says the starting point should be taking the pulse of your company’s culture.

“A lot of companies jump into design thinking and then wonder why it doesn’t work. They haven’t set the cultural map.

A cultural analysis enables organisations to ensure there is the right balance of explorers and preservers in each team, sparking healthy debate that’s necessary for successful innovation.

“If you go too much down the exploring side, you end up with ideas that can’t be implemented. If you go too far down the preserving side, someone else will disrupt because you’ll hold back.”

It’s also critical to bring senior stakeholders along the process.

He illustrates the point by referring to a quote by former Google CEO, Eric Schmidt, who said: “When a new innovation comes into a company, you get one of two reactions from key stakeholders. They either worship it as if it’s God, or they bring out the weapons and want to destroy it.”

Andrew also urges executive leaders to join in creative ideation.

“It’s fantastic when leaders go to a workshop, roll their sleeves up and convey a message to their team that there’s no power differentiation when it comes to creativity. They’re prepared to work through the same challenges as employees,” he says.

“These companies are the most successful at innovating.”

Gain skills in developing strategic HR plans, to ensure all initiatives align with your organisation’s objectives, with AHRI’s short course on HR Strategy Planning. Book in for the next session on 16 September.