Tapping the Internal Entrepreneur

Neal Thornberry, a professor of management at Babson College, has just released his first book, Lead Like an Entrepreneur: Keeping the Entrepreneurial Spirit Alive within the Corporation (McGraw-Hill, 2006). The book was born out Thornberry's 10 years running Babson's open-enrollment executive-education program, "Entrepreneurial Strategies for Innovation & Growth," which helps large companies encourage entrepreneurial activity to identify growth-oriented businesses.

After earning a PhD in organizational psychology from Bowling Green State University in Ohio in 1974, Thornberry decided to apply his expertise to helping big companies flourish. He has been at Babson for 30 years and currently serves as faculty researcher and lecturer in Babson's Innovation & Corporate Entrepreneurship Research Center (ICE). On top of his teaching duties, Thornberry is also president and founder of Impact Strategies, his strategic business consulting firm.

Thornberry says internal entrepreneurs, or "intrapreneurs," can help dynamic businesses identify and create new, growth-oriented business opportunities. They can also encourage cultural change at risk-averse companies. Thornberry recently sat down with reporter Jeffrey Gangemi at the BusinessWeek Online offices in New York. Edited excerpts of their conversation follow:

Who will your book help most?
There are many people in the middle ranks of a company who complain that they're never allowed to do anything entrepreneurial. My studies indicate that workers have more freedom, even within bureaucracies, than they think they do. It's all about how you position things and who you find to mentor and back you up.

Within companies, what are the biggest inhibitors to innovation?
There's often a chasm between top and middle management at companies. Top management wants more innovation, but they want it without mistakes. The problem is, you can't be an innovator or an entrepreneur without making mistakes. You can mitigate the risk, but you can't stop mistakes.

What adjustments need to be made to encourage new growth within companies?
When companies launch new businesses within a larger business, they typically use mature financial metrics to measure its success. Those metrics will sometimes kill the startup, because the business often won't make a profit for the first two years. Management needs to make concessions for that and judge new companies from a different perspective.

A great example of this is a hospital worker in one of my courses. Instead of complaining that there wasn't enough money, she started a venture-capital fund to support for-profit businesses that, in turn, feed their non-profit businesses.

How can an MBA graduate affect their organization from an entrepreneurial perspective?
MBA students who want to be entrepreneurial can sometimes be disappointed by big companies. Inside a business, you're stuck with some things: you already have a strategy, you're stuck with a team that you probably only partially selected, and you have some budgetary cycles that aren't conducive to entrepreneurial activities.

To be successful as an entrepreneur within a business, you have to have some political awareness and maze-running skills (see BW Online, 2/22/05, "Coming on Strong at Babson"). One successful internal entrepreneur told me that the secret to making things happen is not to get hit in the face in the same spot when management slams the door. You have to continue to approach an idea from different angles.

How long should a new hire wait before they start pitching ideas?
The amount of time isn't as important as someone's astuteness in picking up on certain key views. You should find out what top management's hot button is and get on that horse. The latest hot buttons are innovation and growth, so if you frame your idea in those terms, you will probably earn an audience.

You need the right skillset to present an opportunity in the most effective fashion. If you haven't done the homework, then the boss will ask questions like: How many people have you talked to that are potential customers? Are any of them willing to write a check? What's the segment and unique value proposition? If you haven't done your homework up front, you'll be shut down by these questions.

How do you help "intrapreneurs" learn that kind of language?
There's a widespread lack of discipline in presenting ideas. If you can't explain the idea in three minutes, then it needs greater refinement. You can't just start talking, you need to get crisp up front and start with the dramatic piece first. It's also important to demonstrate a financial understanding of the risks, options, and why it makes financial sense to spend money in the proposed way.

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