Intrapreneurship Explained: Can Employees Act Like Founders Inside a Company?

Intrapreneurship means acting like a founder without leaving your job: an employee spots an opportunity, builds something new with the company’s money and people, and pushes it to a decision, often without being asked. Gifford Pinchot III and Elizabeth Pinchot coined the word in 1978, and Gifford Pinchot used it again in his 1985 book Intrapreneuring.¹ Researchers call the company-wide version corporate entrepreneurship. The famous examples are messier than most lists admit, and the conditions research links to employee ventures are largely in a manager’s hands. An employee who wants to try it needs three things before writing a plan: a sponsor with a budget, a small test with an end date, and written terms on credit and ownership.

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What counts as intrapreneurship, and where the term began

Intrapreneurship is entrepreneurship inside an existing organization. Bostjan Antoncic and Robert Hisrich, in a 2003 paper, pinned it to intentions and behaviors that depart from an organization’s customary ways of doing business.² By that test, a routine improvement your manager asked for is good work but not intrapreneurship.

The word comes from a short paper Gifford and Elizabeth Pinchot wrote in the fall of 1978. They argued that large corporations promoted people for political skill and loyalty to the boss, and that idea people who left could end up competing with their former employers. Their fix was a status for selected employees close to that of an independent founder, with the corporation’s money, technology and information behind them.³ The Economist credited the term to Pinchot in 1982, and the American Heritage Dictionary added “intrapreneur” in 1992.¹

The Pinchots’ original design was demanding. The would-be intrapreneur had to risk something of value, such as the time to write a business plan alongside normal duties, and successful ones would earn a bonus plus a budget of their own for future projects, which the paper called “intra-capital”.³

A claims handler at an insurer notices that most customer calls ask the same three questions. She sketches a status page, tests it with two colleagues, and asks her manager for a month to pilot it. Nobody assigned her that work, and once she takes it to a decision and owns the result, it is intrapreneurship. If you already fix things nobody asked you to fix, the step to take is making the next one visible and asking for a decision.

How intrapreneurship differs from corporate entrepreneurship

Corporate entrepreneurship is the wider term for any entrepreneurial activity an existing firm undertakes, while intrapreneurship usually refers to what individual employees do.¹ A 2021 review in Frontiers in Psychology notes that many scholars use the two words interchangeably, but several studies treat corporate entrepreneurship as initiated top-down and intrapreneurship as pursued bottom-up by employees.⁴

The two can exist without each other. A board can fund a venture unit with its own staff while the rest of the company has no route for an employee’s idea. And an employee can start something new in a firm that has no innovation program at all.

When your company announces an innovation program, ask which kind it is. A top-down unit tells you where the budget sits; it does not by itself mean that someone in finance or customer service can propose a project and get an answer.

Entrepreneur versus intrapreneur: who carries the risk

An intrapreneur works with an existing company’s resources and does not risk their own money, MIT Sloan professor Michael Cusumano told the school’s Ideas Made to Matter series in 2018, but many of the questions are the same as for a startup: how big the market is, what resources the idea needs and what the payoff could be.⁵

The existing company is both the advantage and the obstacle. Bill Aulet, who runs MIT’s entrepreneurship center, compares a startup to a blank canvas and a large company to one that already has paint on it, with someone else perhaps claiming to own the canvas.⁵ A new product may threaten an existing one, and the people who run the existing one have a say.

The motives differ too. The 2021 review reports research finding that employees’ attitudes toward income, ownership and autonomy are associated with plans to found a business, while attitudes toward risk are associated with plans to act entrepreneurially inside one.⁴ If owning the result is what drives you, an internal project may frustrate you however well it goes.

Intrapreneurship examples, checked against the record

The two examples that turn up most often, Post-it Notes at 3M and Gmail at Google, are both real cases of employees building something new inside a big company. The details usually repeated about them are less reliable.

Post-it Notes took about 12 years from adhesive to shop shelf. According to the Minnesota Historical Society, 3M scientist Spencer Silver accidentally created a light adhesive that peeled off easily in 1968 and spent five years meeting colleagues to find a use for it. Art Fry, frustrated by bookmarks falling out of his church hymnal, saw the use. Market tests under the name Press ’n Peel had mixed results and 3M nearly dropped the product; free samples handed out in Boise, Idaho, saved it, and it reached US stores in 1980.⁶ Wired reported in 1998 that 3M engineers could spend up to 15 percent of work hours on their own projects, an unwritten rule, and called the Post-it its best-known success.⁷

Gmail is usually credited to Google’s “20% time”, and MIT Sloan’s own explainer repeats the claim.⁵ Its creator disagrees. Paul Buchheit told Time in 2014 that Gmail was an official assignment from the start, and that many colleagues thought it a bad idea.⁸

Myth

Gmail began as a 20 percent side project at Google.

Fact

Its creator, Paul Buchheit, told Time in 2014 that building an email product was his official assignment from the start.

Both stories turn on sponsorship and persistence more than on a time policy. Silver needed a colleague who saw a use; the Post-it needed someone willing to try one more market test; Gmail was built through nearly three years of internal doubt. When you cite an example to make your case, cite those parts: the sponsor, the second try and the doubters who were won over.

What skills does an intrapreneur need?

A 2019 systematic review by Neessen and colleagues names five kinds of behavior that make up intrapreneurship: innovativeness, proactiveness, risk-taking, spotting and exploiting opportunities, and networking inside and outside the organization. It lists skills, confidence in one’s own abilities, knowledge, past experience, motivation, satisfaction, intention and the employee’s relationship with the organization as its drivers.⁹

Networking is easy to overlook, and the Post-it story shows why it matters. Silver’s adhesive went nowhere until Art Fry, another 3M employee who knew of it, saw a use.⁶ An idea inside a company needs allies before it needs a business plan.

How companies encourage intrapreneurship: five conditions

Research on corporate entrepreneurship keeps returning to five internal conditions. Donald Kuratko, Jeffrey Hornsby and Jeffrey Covin, writing in Business Horizons in 2014, name top management support, work discretion or autonomy, rewards and reinforcement, time availability, and organizational boundaries, and describe a questionnaire that measures how managers see each one.¹⁰

1. Top management support
2. Work discretion or autonomy
3. Rewards and reinforcement
4. Time availability
5. Organizational boundaries

Each condition answers a practical question an employee faces. Will anyone senior back this? Am I allowed to decide how to do it? Will it count at review time? When will I work on it? Can I borrow people from another team? A no to any of them can stall a project, however good the idea.

The 2021 review adds two points from the wider literature. A culture that tolerates failure is linked to more employee participation in new ventures, and employees’ trust in their direct manager matters, not only support from the top.⁴ Tolerance for failure is close to what teams call psychological safety, the belief that you can take a risk without being punished.

The study

Limited evidence

Does more say over your work go with more initiative? Peer ratings at one firm

In a 2010 survey at a Dutch research and consultancy company, 179 employees were rated by colleagues on innovation, proactivity and risk-taking. Employees with more job autonomy were rated as more entrepreneurial, even after accounting for education, proactive personality and job type. Job variety showed no clear link once those factors were controlled for.¹¹

The study is small, in one firm, and cross-sectionalcross-sectional: Describes a study that measures everyone in its sample at a single point in time. Because the possible cause and the outcome are recorded together, it can show that two things occur together but not which of them came first.Full entry in the glossary, so it cannot show which way the link runs; the authors note that entrepreneurial people may simply win jobs with more autonomy.¹¹ It still suggests a cheap experiment for managers. Giving someone more say over how and what they decide is more promising than piling extra tasks onto their job.

How to pitch an internal project

A good internal pitch asks for a small, time-limited test with a named sponsor, and it settles credit and ownership before any work starts. The five conditions above work as a checklist for the conversation.

Start with a problem the business already feels, in one paragraph: who has it, how often, and what it costs. Then find a sponsor with a budget, which covers the first of the five conditions, top management support.

Ask for a test, not a department. A few weeks and a small budget to check the riskiest assumption is easier to approve than a launch. The methods are the same ones founders use to validate a business idea before committing to it and to build a minimum viable product, the smallest version that can prove a guess wrong. Cusumano describes companies that set aside a “sandbox fund” so employees can buy time away from other work or hire help for a prototype.⁵ Ask whether yours has one.

Agree the terms in writing before you start: the hours, who gets credit, who owns the result, and a stop rule that says what result would end the project. A one-minute spoken version helps with busy executives, and the advice on writing an elevator pitch applies inside a company too.

The claims handler with the status-page idea would ask for four weeks, a few hours a week, to publish answers for one product line, with her manager as sponsor. The stop rule is agreed up front: if calls about those three questions do not drop, she ends the pilot and writes up what she learned.

Before you pitch an internal project

• Describe the problem in one paragraph: who, how often, what it costs
• Name a sponsor with budget who will back the test
• Ask for a time-limited test of the riskiest assumption
• Agree hours, credit and ownership in writing
• Set a stop rule before you start

The costs that fall on the employee

Intrapreneurship has downsides that company programs rarely advertise, and the employee carries most of them. Three stand out: who owns the idea, who gets the upside, and what the extra work does to the person doing it.

Start with ownership. A 2004 World Intellectual Property Organization presentation explains that in many countries an employer owns an invention an employee makes within the scope of their job, unless the contract says otherwise; some countries give the inventor ownership or a right to fair payment, and others give no specific payment at all.¹² The slides date from 2004, and rules differ by country, change over time and depend on the contract, so read your employment contract’s intellectual property clause and check the current law where you work before you build anything on your own time. If the clause is unclear or the idea sits close to your employer’s business, an employment or intellectual property lawyer, a trade union or your national intellectual property office can explain how the rules apply to you.

Founders hold equity; employees rarely do. The Pinchots’ 1978 paper already argued that the rewards of a successful project must be shared between the company and the intrapreneur in a defined, fair way, which is why they proposed bonuses and intra-capital.³ The 2021 review lists offering appropriate incentives as one of three main challenges for firms, and notes that conflict with managers is a main reason intrapreneurs leave to start their own businesses.⁴

Then there is the extra load. In a 2018 study of 241 pairs of employees, Gawke and colleagues found that intrapreneurial behavior went with higher work engagement among employees most sensitive to rewards, and with more exhaustion among those most sensitive to punishment.¹³ The same project can energize one person and drain another. If an internal venture runs on evenings and weekends, watch for the early signs of burnout and renegotiate the time before it costs you.

The bottom line

Employee ventures stand the best chance when the person with the idea and the manager with the budget agree on time, autonomy and terms, and the famous examples owe more to persistence and sponsorship than to any policy. Before you pitch, read the intellectual property clause in your contract, then bring one named sponsor a request for a few weeks of protected time and a stop rule.