Here Come the Intrapreneurs

Big corporations are trying to capture some of the magic of small companies

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Ronald Reagan extols them. Venture capitalists lavish money on them. They seem to be everywhere, starting their own companies, making megabucks in everything from computers to package-delivery services, and turning up on talk shows as the new Beautiful People of the 1980s.

They are the entrepreneurs, and their current success can be threatening to established corporations. At a time of rapid technological change, young, fleet-footed firms with a new product or a new way of selling can quickly take over markets. Some of the most important breakthroughs in recent years in such fields as semiconductors and bioengineering have been made by smaller companies. At the same time, large firms risk losing prized employees who have caught the entrepreneurial fever. In 1975 Stephen Wozniak, then a 25-year-old designer at Hewlett-Packard, went to his boss with the idea of a microcomputer that could be hooked up to a home television set. The firm was not interested. Wozniak therefore started his own company with Steven Jobs, a friend working at Atari. The company: Apple Computer. Sales last year: $1.5 billion.

Now some big companies are fighting back. They are trying to create the spirit, zest and rewards of entrepreneurship right in their corridors, shop floors and laboratories. They are giving employees the resources and freedom to pursue their own ideas, cutting back on traditional red tape, endless meetings and other obstacles that can slow down innovation.

One of the most ambitious of the efforts was started three weeks ago by General Motors. The giant automaker launched Saturn Corp., a separate company apart from the main GM structure, to produce a new subcompact car, starting in 1987. General Motors Chairman Roger Smith said that he wanted the new subsidiary to be free of the mother company's entrenched procedures. Saturn will have its own engineering and design staffs and its own contract with the United Auto Workers. It is to be a test track for new ways of making, selling and servicing cars. Saturn will, in effect, be an entrepreneurial firm within General Motors.

There is now a code word for this kind of operation: intrapreneurship. Gifford Pinchot III, 42, a management consultant from New Haven, Conn., coined the term and has written a book about it called Intrapreneuring, or Why You Don't Have to Leave the Corporation to Become an Entrepreneur (Harper & Row, $19.95). Writes Pinchot: "The more rapidly American business learns to use the entrepreneurial talent inside large organizations, the better. The alternative in a time of rapid change is stagnation and decline."

Pinchot argues that entrepreneurs and intrapreneurs have similar motivations. Both are pushed primarily by the desire to accomplish something. Says he: "What drives the entrepreneur is a deep, personal need for achievement." This, rather than any large financial gain, is the key. Pinchot says that companies should try to tap employees' interest by giving them the freedom and the financial backing to chase their ideas. If they succeed, they may get a bonus or a promotion. But for intrapreneurs, the real payoff is the feeling of success--"I did it, and it worked."

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