Cultivating the Social Intrapreneur

In the zone where business meets sustainable development, there is a new kind of hero: the social intrapreneur. A social intrapreneur is an entrepreneurial employee who develops a profitable new product, service, or business model that creates value for society and her company.

Social intrapreneurs help their employers meet sustainability commitments and create value for customers and communities in ways that are built to last. Traditional business models are under pressure from disruptive technologies, low growth in established markets, and challenges in developing and emerging markets, and some companies see social intrapreneurs as one way to stay competitive.

Social intrapreneurship isn’t easy. One problem is the “corporate immune system”: Systems and executives are mostly focused on defending and expanding existing businesses, rather than starting new ones. Another problem is the opportunity cost of investment. Innovation is never a sure thing, and uncertainty can feel even greater when companies are innovating to solve social and environmental problems or break into underdeveloped markets. Other investment opportunities may look more attractive.

Capability gaps are a third problem. Intrapreneurs might be analysts, product managers, even compliance officers. Do they know how to get insights about consumers rarely studied by market research firms? Have they ever done any financial modeling, or launched a minimum viable product and made changes in real time? An intrapreneur must deploy these talents, all the while cultivating buy-in from a host of internal stakeholders, staying resilient in the face of a hundred “no”s, and keeping up with their day jobs.

Progressive companies are now building systems to make it easier for their employees to become social intrapreneurs. These systems have three common ingredients:

Funding: Access to funding is essential to help intrapreneurs overcome the opportunity cost of investment. Ideally, the goal is not to set up a new, parallel investment process, but rather to provide resources intrapreneurs can use to develop their ideas to the point that they compete successfully in existing processes. For example, since 2016, the educational company Pearson has invested more than £2.5 million (about $3.35 million) in its Tomorrow’s Markets Incubator, which provides teams of intrapreneurs with amounts between £30,000 and £250,000 (approximately $40,000 and $335,000) depending on which stage they are in. This seed funding can be used to conduct deep consumer research, develop operating models and financial plans, build product prototypes, and eventually pilot ventures with learners and customers. It also includes an expectation that the incubation period will last longer than for usual investments.

Barclays, the international bank, launched a £25 million (about $33.3 million) Social Innovation Facility in 2012 that provides intrapreneurs with an average of £500,000 (approximately $666,000) to help get their ideas off the ground.

CEMEX, the global building materials company, has two intrapreneur ports of call: its internal Growing platform and CEMEX Ventures. The Growing platform focuses specifically on what the company calls “social and inclusive” business models, while CEMEX Ventures supports disruptive and revolutionary projects more broadly, and is open to entrepreneurs as well as intrapreneurs. The Growing platform is particularly patient, giving ventures three to five years to evolve and mature before transitioning into other parts of the business.

Building Capability: Intrapreneurs value coaching to help them solve problems as they arise. Since 2012, Barclays teams participate in the Intrapreneur Lab, which provides three days of intensive residential training from proven intrapreneurs, followed by three months of coaching on the venture development process, leadership, and resilience. Similarly, Pearson’s Tomorrow’s Markets Incubator facilitates access to external experts, such as researchers who specialize in building new businesses in low-income markets. These experts coach and mentor Pearson intrapreneurs throughout the incubation process. In 2017, Barclays, Pearson, and CEMEX partnered with one another to tackle capability gaps, working with Business Fights Poverty, a business-led collaboration network focused on social impact, and Be Inspired Films to develop a set of videos that explore building blocks of the intrapreneurial process.

Networking: Internal stakeholder engagement both wins investment and assembles the capabilities to get an intrapreneurial venture off the ground. Staff associated with Pearson’s Tomorrow’s Markets Incubator, CEMEX’s Growing platform, and Barclays’ Social Innovation Facility all help their intrapreneurial colleagues reach and influence decision-makers within their own companies, and find colleagues with helpful skills and expertise. In addition, Barclays recently launched a community of practice that aims to decentralize the process, enabling intrapreneurs to identify and support one another directly.

These efforts to support and scale social intrapreneurship are already starting to bear fruit. For example, in five years, Barclay’s Social Innovation Facility has assessed hundreds of ideas and supported almost 50 propositions. These include the Women in Leadership Index, which introduces investors to companies with diverse leadership, and a banking proposition designed to serve the needs of the armed forces.

When it launched, Pearson’s Tomorrow’s Markets Incubator received more than 160 submissions from hundreds of employees who had self-assembled into teams, often across functions and business units. Initially, 17 teams were selected to receive funding and coaching to further explore their ideas, and four of those have been chosen to move forward to the next stage, where they will pilot test their ventures. Their ideas include digital products and services focused on improving educational and employment opportunities for low-income people. The company plans to launch a new call for ideas in early 2018.

Of the hundreds of ideas its employees generated over the years, CEMEX now has five intrapreneurial ventures that reach nearly a million customers. Its best-known venture is Patrimonio Hoy, which offers high-quality building materials and technical assistance, including a financial plan and construction solutions, to low-income families building their own homes. Patrimonio Hoy has enabled these families to complete their homes one-third faster and at a lower cost than similar families without its services. Other intrapreneurial ventures at CEMEX range from public-private homebuilding partnerships to concrete-made clean cookstoves.

What stands out from these experiences is that employees are a rich source of ideas with potential to generate revenue, meet sustainability commitments, and create value for customers and communities at the same time. Transforming ideas into profitable ventures can be challenging, but the evidence suggests it can be done. By paying attention to these three ingredients, other companies can make the targeted investments required to support their social intrapreneurs, and watch the opportunities for growth with impact emerge.

Read more stories by Beth Jenkins.