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The world is full of great ideas, which have the potential to create real transformation.
To make sure these ground-breaking ideas come to fruition, founders and senior leaders can’t hope to be the only dreamers, thinkers and innovators of an organisation. Innovation can come from anyone, anywhere, and everyone needs to take part. Diversity and participation are crucial for the success of any business.
A study referenced by Forbes concluded that the most successful innovations in the last few decades were actually invented by existing employees, not entrepreneurs. This realisation has been feeding a fundamental change in workplace culture: a move away from traditional beliefs that only the few can influence innovation. As more people get involved, businesses remain competitive and see significant growth.
Fintechs and start-ups often work like this, and have a lot to teach corporates and larger businesses. Those working at young fintechs have no choice but to get involved with all, or more facets of the business than a traditional corporate employee. They tend to have more opportunities to speak up and bring ideas to the table that can be implemented quickly. This culture not only contributes to business goals and revenues but also brings higher employee satisfaction as contributions become more tangible.
It is true that banks have a different set of challenges, by virtue of their size, regulations and complexities of impact on other systems, but they can still learn from this agility to remain relevant.
There’s been a great general shift in business culture, and it’s based on shared responsibility. According to Harvard Business Review, culture is generally less of a code established by leaders and more of a toolkit for all to draw from and input to. Throughout this piece, we’ll explore what intrapreneurship can bring to businesses, and how it relates to fostering innovation.
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What is intrapreneurship?
First, let's take a step back and look at the definition of intrapreneurship.
According to Cambridge Dictionary, an intrapreneur is an employee who takes direct responsibility for turning an idea into a new product or service. An intrapreneur brings entrepreneurial thinking and skills to build within the structure of an existing organisation.
The birth of the concept is credited to Gifford Pinchot, an American entrepreneur, author and inventor. In 1978, Pinchot wrote about the term in a co-written paper with his wife entitled ‘Intra-Corporate Entrepreneurship’.
Intrapreneurship is more than just being an 'ideas factory'; real intrapreneurship means taking responsibility for the management of that idea and seeing it through to profitable reality – or, as Pinchot puts: “intrapreneurs are the dreamers who do”.
The main difference between intrapreneurship and entrepreneurship is that entrepreneurs start up and run their own companies, whereas intrapreneurs are responsible for innovating within an existing organisation.
Successful intrapreneurship utilises existing frameworks and resources giving employees the space to think through an idea from start to finish with minimum disruption from across the organisation. This allows these intrapreneurs to quickly build and iterate, giving them the chance to go to market sooner than what normal organisational structures may allow for.
Although the concept has been around for some time, the coined term ‘intrapreneurship’, may not be familiar to all, yet there is one famous example of successful intrapreneurship that we are all aware of -- the development of the Apple Macintosh, also known as the Mac.
Steve Jobs famously split off with a group of engineers to develop the cult computer. The team had the freedom to work independently and without ‘adult supervision’, to effectively create one of Apple’s main product lines. This not only kickstarted the iconic branding Apple created for themselves, but it also showcased how effective encouragement for innovation resulted in a product that proved to have longevity within the direct-to-consumer market versus the tech aficionados and high spenders Apple originally targeted themselves towards.
Most importantly, they created a new, long-lasting stream of revenue for the organisation and a culture that relied on the ideas of the many, not the few.
The goal of Intrapreneurship is to create the entrepreneurial mindset and infrastructure needed to support growth. It takes a systems view of growth. It is a framework for transformation.
Apple founder Steve Jobs with room full of computers in 1984.
Intrapreneurship must be always-on
Intrapreneurship is not a silver bullet, there are failures and it’s about being brave enough to experiment. You have to kiss a lot of frogs before you get to your innovation solution!
Innovation is the key element in providing aggressive top line growth. But doing one or two innovation initiatives a year will not support or sustain innovation. Organisations need to be innovating all the time. Failure rates for innovation are still high – 50-90%.
In 2020, McKinsey stated that 70% of transformations fail largely due to people and culture-related challenges, drawing back from their 2016 article stating that companies must be prepared to tear themselves away from routine thinking and behaviour.
Here are some key points to take into account:
Futureproof skillsets: Intrapreneurship is a way to spot innovative thinkers and doers, which futureproofs skills that we need to remain competitive. This will be desirable in staff recruitment and promotion.
Intrapreneurs as future leaders: Intrapreneurs bring a diversity of thought to an organisation by virtue of the fact that they think and act differently to other employees. It is this differentiation that makes them the ideal candidates to lead new growth initiatives and they often possess characteristics seen as desirable for senior management. HBR says that “The essence of leadership is change, and proactivity is the fuel for any force of change”.
Retention tool: An intrapreneurial culture helps companies attract and retain their most entrepreneurial leaders.
Your best salespeople: According to HBR, Intrapreneurs are able to take “dormant” ideas or projects, “revitalising them with their influence and sales skills”.
C-suite sponsorship: an innovation project is doomed to fail from the start if it does not have the backing and buy-in of execs. The best change agents nurture relationships at the top of the organisation and know who to lean on when they want to get a project pushed through.
So, why is intrapreneurship so important?
For businesses to inspire rapid action and active results, leaders must trust their people and allow teams the breathing space to dream, think and build. People must be able to do their best work in the right environment. That is as true for fintechs as it is for traditional financial services organisations.
A Deloitte study from before the 2020 pandemic showed that fostering an intrapreneurial culture translates directly into tangible business benefits, including cutting time to market for new products and services, driving both top-line growth and cost savings, and improving business processes.
Intrapreneurship draws on the inspiration from start-ups and their nimble way of working. When running several experiments at once, they allow for more opportunities to iterate but also the confidence to quickly scrap ideas that are not working, saving time and money.
How can you support the intrapreneurs in your organisation?
Organisations need to be innovating all the time.
To go to market quickly and cost-effectively, businesses must evolve and adapt their internal cultural structures lest they continue to play catch up in an unpredictable environment (something we have seen as Covid-19 hit in 2020). This is done by nurturing a culture that embraces change and possibly uncomfortable shifts to control within the organisation.
Such as the Apple example given earlier, financial institutions focused on future-proofing have a better chance of survival and success by embracing uncertainty. It should be a constant cycle of innovation within an organisation, not just a timed, cyclical initiative.
However, this is no easy feat. Encouraging people to think outside of the box and to go up against centuries-old systematic norms requires those at the top to promote this type of thinking, allowing people to feel comfortable with the uncomfortable without concern or worry for job stability.
Finding and encouraging the intrapreneurs within your organisation is an important way to benefit fully from the external pace of innovation.
It may be easy to get caught up with a structured quarterly or yearly plan. Although structure and goals are fantastic to align the organisation, they may not breed the best environment for independent thinking. Firms can get caught up doing what they are doing, and if something outside of the business plan comes up, they won’t necessarily do anything about it.
When setting the right work environment and culture, you are creating the right tone for intrapreneurship from the get-go. So how should you go about encouraging this type of culture?
1. Take a focused approach to innovation
Put the systems in place to assess the idea, and allocate budget and time for employees to develop them and prove these ‘proof of concepts’.
2. Allow people to create teams across all business functions for new projects
Employees who are empowered by intrapreneurial leadership are more motivated to develop creative solutions and alternatives.
3. Promote upskilling, reskilling and learning and development (L&D) initiatives
These initiatives cost money and time to succeed but boost confidence and skills. Also, what is learned from them can be implemented internally to create new ideas and visions.
But of course, it’s not all about what the business needs. It’s about what the people need. Today, the majority of people want to become their boss. Corporate intrapreneurship programs help employees follow this dream and keeping people engaged at work is vital if you want to retain top talent.
In this world, it is necessary to celebrate those who think independently and who can create unique solutions off the top of their ideas.
The Investec Venture Builder programme was built with these values in mind. Starting from our business in South Africa, it helps people believe that they can create these opportunities for themselves. It also helps support the wider team and business goals with their out-of-the-box thinking.
In addition, we have recently launched an internal innovation workflow platform powered by Wazoku, called IdeaSpace. Through this tool, leaders can submit challenges and colleagues can post ideas and collaborate to implement.
At Investec, we encourage everyone who has the entrepreneurial spirit and thinking necessary for growth. We give everyone the freedom to share fresh ideas and build real relationships.
We back some of the best entrepreneurs out there, that includes our very own people who each share the same values and traits and believe that intrapreneurship is at the heart of fostering an empowering and productive environment.
Our goal? To empower Investec intrapreneurs to build businesses within ours, by nurturing and fast-tracking the execution of hyper-scalable ideas.
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