How the Right Employees Have an Innovation Advantage

Conventional business wisdom tells us that entrepreneurs are today’s main source of innovation. We see the stories of young founders leaving college with a big idea, going to work in their garage, and building something that changes the world. We hear about corporate employees, strangled by slow-moving bureaucracy, that are blocked from making transformative discoveries.

In fact, a Wharton Business School study in this decade of the “Top 30 Innovations of the Last 30 Years,” concluded that only eight were first conceived by entrepreneurs, and twenty-two were conceived by employees. Even more importantly, only two of the thirty innovations were scaled by the original creators. These included the PC, mobile phone, the internet, and MRI imaging.

As a business consultant, I admit to being misled by the hype, and was impressed by the insights offered in a new book, “Driving Innovation From Within,” by fellow consultant and founder of the strategy firm Outthinker, Dr. Kaihan Krippendorff. He outlines the attributes of the “entrepreneurs” or intrapreneurs in your organization, and how to lead them to make your company an innovator:

1. Love to explore novel approaches and solutions. In every company, there are a few people who don’t like to follow the accepted way of doing things. Rather than punish them, it may pay you to nurture and manage their outside-the-box thinking, and capitalize on their innovations that help your customers and keep you ahead of the competition.

For example, Google was already a big company when Paul Buchheit was unhappy with the capabilities of external email for internal communications at Google. He created a simple Gmail for internal use, and later it became one of the biggest Google offerings.

2. Exhibit market awareness and a drive to win. Sometime employees on your front lines have a better handle on what customers need next than external entrepreneurs. They know your competitors, understand your industry, and have the same desire to win in the name of the customer. Give them an incentive in time and money to drive their solution.

Not many people know this, but the original Sony Playstation was, in essence, a prototype based on employee Ken Kutaragi’s Nintendo in an attempt to make it more powerful and deliver a better gaming experience for his daughter and other customers.

3. Propensity to “lean in” before being told how to act. It’s hard to act autonomously in a big company, but it’s not hard to recognize the natural leaders.in any organization, no matter what the size. These are people who can and will drive change and innovation, if given half the chance. All you have to do is nurture this activity, rather than kill it.

Dr. Spencer Silver, a scientist at 3M, was leading an effort to create a strong adhesive for aerospace. Instead of discarding an apparent failure, a light adhesive that didn’t leave a residue, he persevered and fostered it to become the Post-It Note that we all use today.

4. Excel at calculating risk and making thoughtful bets. Indeed, internal innovators usually don’t have the risk tolerance of entrepreneurs like Elon Musk, who invested nearly everything into SpaceX. Yet there is sometimes greater value in being very deliberate at calculating risk and making more thought-out proposals for change.

An employee of Sun Microsystems, James Gosling, created a new object-oriented programming language called Oak in 1995. He de-risked it initially by using it to set up client Time Warner cable boxes. Later renamed Java, it now runs a world of devices.

5. Understand and able to negotiate internal politics. While entrepreneurs may shop their idea to, on average, forty investors before getting funding, internal innovators really have only one option – their employer. So, winning support internally depends less on the quality of the pitch than on the political work performed before the pitch to align interests.

I was lucky enough to be part of a key intrapreneurial effort at IBM, the IBM PC development, which I believe was only allowed to happen due to the internal political acumen of our leader, Don Estridge. He knew well IBM executive sensitivity to open architecture, third-party suppliers, and micro technology, and used it to leverage funding.

6. Demonstrates a sense of purpose without risking all. Internal innovators often express frustration that they could be making more money if they were building their own businesses and driving their innovation independently. Yet some will make the tradeoff of achieving an innovation dream without risking their family life or an existing career path.

I’m not minimizing at all the role of entrepreneurs in new innovations, but I now realize that entrepreneurs are everywhere, both inside and outside of existing businesses. At least the first half of the attributes described above apply to both, but employees in business with other key attributes have a real innovation opportunity as well. We all need the best efforts of both worlds.