Building a Culture of Intrapreneurship: Our Thoughts in Mercer’s Voice on Growth
Brandsinger Partner Remington Tonar was recently published in Voice on Growth, an online publication sponsored by Mercer, the world’s largest HR consulting firm.
Building a Culture of Innovation and Intrapreneurship to Compete
As venture capital continues to flow into growth markets, incumbent companies of all sizes will be forced to contend with increasing competition from fast-growing disruptors. Asian venture investments, for example, represented the bulk of global venture capital growth from 2016 to 2017 and are on track to account for over 40 percent of all VC investment in 2018, according to data from PitchBook. This influx in investment has fueled the emergence of unicorns across the region—from India’s Oyo Rooms and Big Basket to Southeast Asia’s Traveloka and Tokopedia to China’s Didi and Lu—threatening established firms in industries ranging from retail to hospitality to transportation to finance.
As in the United States, incumbent companies have responded to this boom in well-funded upstarts by making their own early stage investments. This corporate venture capital (CVC) leverages a critical, but often misallocated asset enjoyed by many large companies: cash. As of last year, per CB Insights, Asian companies accounted for over a dozen of the top 50 CVC firms and constituted nearly 30 percent of deals—up 8 percent from 2016. Yet, for some companies, wading into the VC landscape can seem complex and risky. CVC often forces executives to think differently about their growth strategy, hire consultants and investment bankers, and even question the viability of their business model and the nature of their marketplace.
Despite its popularity, CVC isn’t right for every company in every instance. Many companies often overlook the ideas and ambitions that already exist within their employee base. If the worldwide surge in side hustles tells us anything, it’s that workers’ current positions are not adequately fulfilling their financial and existential needs. According to a 2017 GoDaddy survey, for example, 77 percent of Filipinos, 54 percent of Singaporeans and 37 percent of Hong Kong residents have side hustles. Decision makers at companies under pressure from more nimble startups must find ways to harness and direct the excess ambition of employees to help catalyze growth and future-proof their organizations.
Accomplishing this requires cultivating a culture of innovation and intrapreneurship that can produce new ideas and new ventures. The strategy required to build this type of culture cannot be entirely organic, however. It has to be carefully designed and actively managed. This entails implementing systems and programs that encourage and incentivize employees to ideate, collaborate, experiment, and even dream—and then ensuring they can share in the upside if their idea is implemented, commercialized or spun off.