Sujay Dutta is global business manager for Engineering and R&D Service at HCL Sweden, the Swedish subsidiary of the Indian IT multinational HCL Technologies. The Indian companies is known as one among the most innovative organisations in the world with respect to new management practices and employees empowerment. With succes. Sujay Dutta wrote this guest blogpost, coming from is own blog, asking questions on Intrapreneurship that we take over on the blog of the Intrapreneurship conference, here below.
We may have all heard about Intrapreneurship – the term used for entrepreneurship within organizations, while operating within the organizational environment.
This term was first coined in 1978 from a paper written by Gifford & Elizabeth Pinchot. And still today, after 30+ years, it is a lesser known cousin of Entrepreneurship. We know the marquee successes of Intrapreneurship – like 3M’s Post-It Notes, Sony’s Playstations, Sun’s Java Programming Language, HCL’s Comnet division & many more.
And still, they are far lesser than the entrepreneurship successes we have seen in the past three decades, even though organizations have much more resources in terms of money, talent, experiences at their disposal as compared to entrepreneurs. The reasons for so could be the constraints that organizations operate in – competitive pressures, market pressures, stakeholder pressures etc. etc.
However, successful organizations in the long run would be the ones that could come out of this deadly strangulation by creating a culture of Intrapreneurial success within the organizations.
The case of big IT services companies
For this post, I would like to consider the case of Tier-1 IT Services organizations – having revenues of USD 3 Billion+ with 70000+ employees. Such organizations typically derive about 80% or more of their revenues from providing IT Services to enterprises (the balance of their revenues could be from Business/Technology Consulting, Product Development Services, BPO services).
With the favorable trends towards Cloud Services, much of the IT services revenues for these companies carry a high risk of getting wiped off in the next 5 to 10 years. That’s the challenge ahead of them in the Demand side.
These organizations are also exposed to significant challenges in the Supply side – the supply of talented skilled engineers and increasing salary costs.
How could these Tier-1 IT Services organizations balance the Demand-side and Supply-side challenges in the next 5-10 years, keep growing profitably and not get strangulated?
Let’s look at the positives/strengths of these organizations:
- These organizations are knowledge-based organizations. The value they create for their customers are created by their employees delivering services to their customers
- These organizations have an average employee age in the vicinity of 25 years
- These organizations have been growing very well in the past decade – with an average CAGR of about 30%
- These organizations have healthy balance sheets, with significant cash holdings
- These organizations , most likely, would have past examples of successful Intrapreneural ventures in the past – like HCL Comnet
Create a Venture capital arm
So, these organizations have all the necessary ingredients to start a “Venture Capital” arm – which could promote, encourage and foster a culture of Intrapreneurship – to help create the business lines of the future for themselves.
Organizations which could successfully do this might be able to emerge much stronger in the next 5-10 years; the rest might get strangulated to death or are gobbled by others.
The key question would be – Which of these organizations are able to take the Risks now?« Back to Blog