ORACLE

The ‘intrapreneur’s’ parable

By Doug Samuelson

The four OR/MS analysts were headed for the clubhouse, golf carts in tow, enjoying the unseasonably warm Saturday afternoon in late winter. As they chatted about their game, one of them, Stan, remarked, “Well, at least on the golf course I’m free to do whatever I choose, within the rules.”

“What do you mean?” his friend Vijay inquired.

Stan grumbled, “Remember how, a couple of years ago, Global Analytics, the big, famous consulting and R&D outfit, bought the little R&D company my three colleagues and I had built up and offered us full-time jobs?”

“Sure,” the others chorused.

“And we thought you were happy with how that was going,” Vijay added.

“I was, for a while,” Stan said. “But they’d sold me the idea that they wanted an ‘intrapreneur,’ as they put it, a person who would work as an entrepreneur within their general structure. They wanted me to hand off the big line of business we had to their production people, which was OK with us since it was at about the right stage for that, and then to go grow new lines of business the way I grew my company. It sounded great!”

“There’s a lot of management literature about doing that,” Andy nodded. “It does sound like a good idea – keep the entrepreneurial approach, but with more resources to make it work and more security for the people doing it.”

“Yeah, that’s what they convinced me of, and that’s what I believed,” Stan affirmed. “But somehow it isn’t working out that way. I’ve brought in two prospects, about $750,000 R&D projects with clients who had heard of me and liked my earlier work. Back in my own company, we’d have written a proposal in a week and used that first project to get the client excited about expanding the product. In five to seven years, that would be a $7 million to $10 million line of business. But at Global, it seems I have to have a lot more review before a proposal can go out. Not only does it take time, potentially losing the opportunity, but it also turns out I need approval for a marketing budget to pay for the extra proposal reviews they’re putting me through! And meanwhile we no longer have the revenue from our old line of business, either. Frustrating!”

“Frustrating, but not surprising,” Vijay, who had gone this route himself several years earlier, empathized. “And if you did grow that new line of business to the level you intended, how long do you think it would be before Global decided that someone else, above you in the hierarchy, had to manage it, even though he or she might not know anything about your client or what you were doing?”

“That’s actually what happened to a couple of my friends there, other guys who came in pretty much the same way I did!” Stan exclaimed, somewhat surprised. “At this rate, they’re going to drive a lot of innovation out of the company. What’s the matter with this management, anyway?”

“That’s pretty common behavior in big companies that bought little ones, I hear, no matter what they promised,” Ralph observed. “Big-company people have a hard time deciding to take risks and change approaches.”

The group shared some commiserating looks and eye rolls, except for Vijay.

“There’s actually a valid business reason for that,” Vijay explained. “When you and a few other people ran your own company, you were often risking the whole company with your decisions – which was fine with you, because you owned the company. Only your own assets were at risk. Admittedly quite a lot of your assets were at risk, but they were yours to gamble with – maybe with some discussions required with your wives, but that was all.

“But now,” Vijay continued, “if you did something really embarrassing, many other people and other groups would be harmed, not just you. Worst case, think about how much lost business and how many lost jobs might result if a single foul-up was big enough to get Global barred from federal contracting for a year! Or even if they got dropped from consideration from just one really big contract, fifty or a hundred million dollars’ worth, because the contracting officer had heard bad things about Global. So of course they have to be much more careful and thorough about reviewing what goes out, both proposals and completed work. They want ‘intrapreneurship,’ as they claimed, but you and they were never on the same page about how the risks would be handled. And that is pretty much enough to cause the problems you’re having. Right?”

“Absolutely!” Stan agreed. “But this is so clear and so basic, you’d think some of these big-company managers, and some of these academics and commentators writing articles and books about ‘intrapreneurship,’ would have caught on by now and warned everybody about this, no?”

“Think,” Vijay laughed. “How many of those people have ever been entrepreneurs? Remember, even our wives needed some cajoling to get used to the entrepreneurial lifestyle – and cash flow. These managers and commentators are in big companies, or studying big companies, and probably have been for their whole lives. So how would they have any idea how an entrepreneur wants to act?”

“Sounds as if you might be available for another small venture soon, Stan,” Andy observed, grinning. “And it just so happens ...”

Doug Samuelson (samuelsondoug@yahoo.com) is president and chief scientist of InfoLogix, Inc., in Annandale, Va., and a senior statistical analyst/subject matter expert for Great-Circle Technologies in Chantilly, Va., supporting various national security applications.