Two approaches that have gained popularity are open innovation and intrapreneurship. While both seek to foster creativity and growth, they have key differences and offer diverse opportunities.
Open Innovation
Open innovation is a strategy in which companies look outside their traditional boundaries for ideas, technologies and solutions. This can include collaborations with universities, startups, suppliers and even competitors. The idea is that by opening up to external sources, companies can access a wider pool of knowledge and creativity.
Opportunities
- Access to External Talent: By collaborating with external experts, companies can tap into knowledge and skills that they do not possess internally. This can be especially useful in advanced or emerging technology areas.
- Reduced Costs and Risks: Sharing the development of new technologies with external partners can reduce the costs and risks associated with innovation. For example, a company can share research and development costs with a university or a startup.
- Accelerating Time to Market: External collaborations can speed up the innovation process, allowing products to get to market faster. This is crucial in industries where speed is a competitive factor.
Intrapreneurship
Intrapreneurship, on the other hand, focuses on fostering innovation from within the organisation. It consists of supporting employees to act as entrepreneurs, developing new ideas and innovative projects within the company. This approach not only harnesses internal talent, but can also improve employee morale and retention.
Opportunities
- Fostering Internal Talent: By encouraging employees to be creative and proactive, companies can discover and develop internal talent. This not only benefits the company, but can also increase job satisfaction and staff retention.
- Improved Organisational Culture: Promoting a culture of innovation and agility can transform the way a company operates. Employees feel more valued and motivated when their ideas are listened to and supported.
- Developing Customised Solutions: Internally generated ideas are often more aligned with the specific needs and objectives of the business. This can result in more effective and customised solutions.
Key Differences
- Source of Innovation: Open innovation seeks ideas from outside the organisation, while intrapreneurship focuses on internal talent. This means that open innovation can bring in fresh and diverse perspectives, while intrapreneurship leverages deep in-house knowledge.
- Collaboration vs. autonomy: Open innovation involves external collaboration, which may require relationship management skills and intellectual property agreements. Intrapreneurship, on the other hand, fosters autonomy and internal leadership, allowing employees to take initiative and lead projects.
- Risks and Control: Open innovation can involve sharing intellectual property and risks with third parties, which can be a challenge in terms of control and confidentiality. Intrapreneurship allows for greater control over projects, although it may require significant investment in internal resources.
Some success stories
- Google (Intrapreneurship): Google is famous for its ‘20% Time’ programme, which allows employees to spend 20% of their time on personal projects. This approach has led to successful products such as Gmail, Google News and AdSense.
- Procter & Gamble (Open Innovation): P&G uses the Connect + Develop platform to collaborate with external innovators. This strategy has resulted in successful products such as Oral-B toothbrush and Pampers Dry Max nappies.
- 3M (Intrapreneurship): 3M encourages internal innovation by allowing employees to spend a percentage of their time on personal projects. This approach has led to iconic products such as Post-it notes.
- Lego (Open Innovation): Lego Ideas is a platform where fans can submit their own ideas for Lego sets. The best ideas are produced and sold by Lego, such as the set from the ‘Friends’ series.
- CEMEX (Intrapreneurship): CEMEX has implemented programmes such as CEMEX Ventures, which supports employees and external entrepreneurs in developing innovative projects. A successful example is the ‘Patrimonio Hoy’ programme, which helps low-income families build their own homes.
- At Telefónica, through Wayra, we have been accompanying the Telefónica Group for more than 15 years in the search for innovative startup solutions that allow us to address the great challenges we face as a company, as an industry and as a key player in social progress. To achieve this, we decided from the beginning to take an active role in the entrepreneurial ecosystems in those geographies where Telefónica operates, while developing connections and investments in the world’s leading technology ecosystems, such as Silicon Valley and Israel. With seven Hubs in Europe and Latin America, and teams operating in nine countries, we help entrepreneurs reach a global scale and connect them with Telefónica’s business units to generate joint business opportunities. In these years we have achieved
- +233M€ of cumulative investment
- +500M€ business generated to startups in our portfolio
- +700M€ of revenue generated for Telefónica through our startups.
Finally, both open innovation and intrapreneurship offer valuable opportunities for organisations. The key is to find the right balance to make the best of both approaches. By combining the freshness and diversity of open innovation with the depth and customisation of intrapreneurship, companies can foster a culture of continuous and sustainable innovation.
