Our guest author today is Susan Foley, Managing Partner, Corporate Entrepreneur
According to research Entrepreneurial Orientation (EO) is the cornerstone of innovation success for organizations. EO is defined as the degree of risk-taking, innovativeness, and proactiveness in a company.
Organizations that have successfully developed entrepreneurial orientation have realized a positive impact on growth, predicting innovation and business performance.
So it is not surprising that most organizations today are striving to develop their own Entrepreneurial Orientation. They are committing time and resources to the development of cultures that embody these three main capabilities.
Few companies or researchers, however, have looked at extending entrepreneurial orientation to individuals. According to the Journal of Business Research, there are “limited number of papers investigating an individual perspective on EO.”
Researchers in the 1960’s and 1970’s started investigating the characteristics of individuals that gravitated to entrepreneurship. Terms like, “need for achievement, a locus of control, self-efficacy, risk-taking propensity, family influence, educational influence, work experience etc.” were used to identify entrepreneurial behavior. But beyond this, there was little evidence that these characteristics, traits or behaviors actually had validity.
Then researchers started to look at “psychological variables” like cognitive abilities, knowledge, skills, personality tendencies, applied social skills, interests, and preferences.” They gravitated toward the Big-Five-Factor Model of Personality of Extraversion, Emotional Stability, Agreeableness, Conscientiousness and Openness to Experience. This approach dominated the literature for years but did not adequately explain the entrepreneurial orientation at the individual level. In fact, research showed that the Five-Factor Model of Personality was too high level to accurately predict entrepreneurial orientation.
At one point researchers started asking questions about the interplay between a firm’s Entrepreneurial Orientation and the Entrepreneurial Orientation of the individual. Realizing that in both cases neither the organization nor the individual had all the requisite capabilities of risk-taking, innovativeness, and proactiveness. They realized that they needed to drill deeper below the broad definitions of the Big Five-Factor Model to “specific facets of personality” or behaviors like assertiveness, influence, and self-efficacy. They found that these behaviors contributed to both leadership and organizational performance. The research did not, however, predict or identify the propensity to be an intrapreneur inside of an established organization.
Much of the research in the past had been on external entrepreneurs and entrepreneurs in small, medium enterprises (SMEs). Thus translating this research to intrapreneurs inside established organizations was mostly antidotal and not grounded in empirical research. Attributes of external entrepreneurs were randomly applied to internal intrapreneurs. There was no validity to equate external entrepreneurs to internal entrepreneurs (intrapreneurs).
Over the next few decades’ researchers continued to study the three key dimensions of Entrepreneurial Orientation – risk-taking, innovativeness, and pro-activity within firms and the individual characteristics of entrepreneurs. The main conclusion was that very few firms will have all three dimensions of EO and to supplement that deficiency they would have to look at individual characteristics to fill those gaps.
Again much of this work was focused on the Big Five-Factor Personality that was already deemed too high level to be a reliable indicator. So researchers selected one dimension of the big five-factor, Extraversion where entrepreneurs scored higher and identified “assertiveness” as a key factor. The second factor was “self-efficacy”. They defined assertiveness as “the ability to influence others” and self-efficacy as “how well one can execute courses of action to deal with prospective situations.” Both were theoretically linked to both leadership and business performance.
According to the Journal of Business Research 2017, the key question researchers were looking at was, “Can a firm’s innovation and growth be explained by integrating firm-level characteristics and individual psychological variables.” The conclusion was that these two personality variables (assertiveness and self-efficacy) can often overcome deficiencies in EO at the organizational level. That when innovativeness and pro-activity are present but risk-taking is absent or when pro-activity and risk-taking are absent then the individual characteristics can help fill the gap to achieve firm performance.
The key take away from this is that EO requires the integration of individual and organizational characteristics to achieve entrepreneurial success – people and culture. It was clear that EO for organizations was grounded in risk-taking, innovativeness, and pro-activity and that the absence of any of them, could be supplemented by individuals. As far as EO for individuals that was still an open question. Relying on two variables (assertiveness and self-efficacy) was not enough to explain EO at the individual level.
During this time work continued on trying to define the individual characteristics of entrepreneurs. According to an article titled Personal Characteristics of Entrepreneurs, researchers found that “the most important personal qualities for an entrepreneur were: courage, self-reliance, responsibility, determination, perseverance, proactive approach, creativity, and scholarship in a particular area of business.” They found entrepreneurs to be “independent, creative, autonomous, risk takers, individually oriented, rely on themselves and make decisions under conditions of uncertainty.”
Since then, the list has only continued to expand. There is no common definition for what it takes to be an entrepreneur, no agreement between the academic and business world. More disturbing is that this list has been randomly applied to intrapreneurs without a thorough investigation into what it takes to be an intrapreneur versus an entrepreneur.
Growing Interest in Intrapreneurs
As intrapreneurship has evolved so has the interest in applying EO to organizations engaged in intrapreneurship! Not surprisingly the same three components of EO, risk-taking, innovativeness, and pro-activity make sense for a group, team or venture inside an established organization. What is still missing, however, is understanding the entrepreneurial orientation of individuals.
According to research titled Intrapreneurial Behavior: An Empirical Investigation of Personality Traits, the authors noted that less attention has been given to the individual level of entrepreneurial behavior. Their initial hypothesis was that “Personality is considered a major determinant of entrepreneurial success.” To address these researchers again turned to the Big-Five Factor Personality to explore the “relationship between personality traits and intrapreneurial behavior.”
Although this research was useful in identifying key personality factors and their influence on intrapreneurial behavior. It highlighted only a few characteristics that were directly related to EO. They found that “extroversion, emotional stability, and openness to experience” were positively related to intrapreneurial behavior and risk-taking. That emotional stability and openness to experience were to some extent related to innovativeness.
The research showed that these three personality factors (extroversion, emotional stability, and openness to experience) can help organizations identify individuals with intrapreneurial behavior but are not necessarily determents of success. The findings did not show a direct link to firm performance. But it gave us some additional items to add to the ever-growing list of individual characteristics of intrapreneurs that have already been identified.
Here is a partial list of what we’ve compiled from academic research, business journals and intrapreneurs themselves about the characteristics of intrapreneurs:
Can you tell me which of these are the most important? Is this helpful or more confusing? It has been impossible to know what you are looking for.
Entrepreneurial Orientation of Intrapreneurs
We decided there was a better way to get at this question. Go to the source – successful intrapreneurs. Identify individuals inside organizations that have been successful at building new business ventures inside organizations. Work with them to find out exactly what they do, how they do it and what characteristics, competencies, and behaviors contributed to their success.
At first, we thought it would be easy to go into large organizations and ask the executives if we could talk to their internal entrepreneurs. They told us they didn’t have any. That made us realize that findings these individuals would be more difficult and take more time. We eventually did and we found internal entrepreneurs who had built million and billion dollar businesses for their organizations.
We worked with them to identify the characteristics, competencies, and traits that helped them succeed. They were eager to help because they told us that their organizations did not understand them, what they did or how they did it and they wanted them to know. It was a matter of self-preservation for many.
Our research revealed a number of key things. First, there was no concise language to describe intrapreneurs so we had to develop some. We looked at all the characteristics, attributes and traits that were discussed in the academic literature and business world. We found that there was some overlap but in general there were wide gaps in the language used to describe intrapreneurs. It was clear that the current descriptors were insufficient.
Secondly, we needed a tool to help us conduct our research. We looked at all the predictive tools that were available at the time: Personality Styles like Myers Briggs and the Big Five-Factor, Values-Hierarchy, Social Styles, Life Stages, Hermann Brain Dominance, Neuro-linguistics, Behavior Patterns like DISC and Success Profiles that evaluate both competencies and behaviors.
We decided to settle on Success Profiles because competencies and behaviors focus on what individuals “will do” – their propensity to act. A competency is a set of behaviors that are combined together to define a certain level of expertise. “For over 20 years, competencies have served as a universal language to effectively measure and individuals ability to succeed in a particular job and fit within an organizations culture, regardless of industry” according to The Devine Group a competency and behavioral assessment vendor.
Thirdly, in order to do our research, we had to first build a Success Profile for the specific role of intrapreneur, something that had never been done before! We worked with our intrapreneurs and The Devine Group to build a profile that showed the key competencies and behaviors that Intrapreneurs inside established companies needed to be successful. We tested it in the market, refined it and then eventually used it to collect data to show the relevance of the Success Profile in identifying and developing Intrapreneurs.
Only later did we realize that our research tool itself was a product that would be useful for large organizations that wanted to develop their own intrapreneurs. We called it the Corporate Entrepreneur Profile™ because at the time the word Intrapreneur was not widely used. Organizations referred to their internal entrepreneurs as Corporate Entrepreneurs.
Some of the early adopters found it fascinating to see how different and divergent Intrapreneurs were to traditional employees. It was clear to them and to us that we had unlocked the mystery of who Corporate Entrepreneurs/Intrapreneurs are, how they are different and why it is important.
We had made our way through the list of characteristics, traits, and attributes in the chart above. From the start, we knew it was impossible for any one person to exhibit all of those characteristics and even more difficult to measure all of them. Finding the ones that were relevant was our challenge and our end goal.
Over the last ten years, we have worked with many organizations to help them identify and develop their internal entrepreneurs. Our data shows that the same competencies that were relevant than are even more relevant today. We continue to see that Intrapreneurs exhibit a unique combination of competencies that set them apart from their peers. They do things that are often totally opposite to things done in the core business. We have also seen that the same top competencies are exhibited time and time again in those individuals that are best suited for the role of Intrapreneur.
The key takeaway is that Intrapreneurs that have been successful in this role are the only ones that can help us understand the Entrepreneurial Orientation at the Individual Level. They have demonstrated their capabilities through their actions and the results they achieved. By looking at individuals that were already successful in the role helped define what it takes to be an intrapreneur. We identified seventeen competencies that enable Intrapreneurs to be more successful inside organizations.
The success profile also helped us understand the EO of the individual – their level of risk-taking, innovativeness, and pro-activity. Embedded within each competency are behaviors that directly link to risk-taking, innovativeness, and proactivity. Plus the individual results achieved by these intrapreneurs speak for themselves and directly link to firm performance and entrepreneurial success. The very thing that has been missing from prior work.
We recognize that the academic world and business world still do not agree on what it takes to be an Intrapreneur. A key factor is the lack of understanding in the differences between personality assessments (measuring broad personality dimensions) and competency-based assessments (behaviors grouped into competencies for specific job functions.) The academic research has provided some useful information but it has been incomplete.
It is only in working with the Corporate Entrepreneur Profile™ that we have come to understand the unique perspective that Success Profiles bring to understanding the competencies and underlying behaviors that motivate, inspire and engage individuals in entrepreneurial pursuits inside of established organizations. It is a comprehensive assessment of the full range of competencies of successful intrapreneurs. Many of the items identified in academic research are included in our set of competencies. We acknowledge the contribution that their research has made to this effort.
This article was designed to help you understand insights that have been useful in advancing our understanding of intrapreneurs and why the existing research has not been able to give us a complete picture of the Entrepreneurial Orientation at the Individual level.
We believe that our research has helped move the discussion forward in positive ways that contribute to a better understanding of the nuances that distinguish intrapreneurs from their peers and to understanding the Entrepreneurial Orientation of Intrapreneurs.
For more information on the Corporate Entrepreneur Profile™ go to: https://corporate-entrepreneurs.com/entrepreneurship-services/corporate-entrepreneur-profile/ or download The Corporate Entrepreneur Profile Brochure for FREE at: https://corporate-entrepreneurs.com/cep-key-competencies/