Howard Edward Haller reminds us of the story of the Sony PlayStation, an intrapreneurship adventure carried out by Ken Kutaragi, an electrical engineer hired by Sony in 1975. Here is an excerpt :
Ken Kutaragi was working in the sound labs at Sony Corporation when he bought his young daughter a Nintendo game console. Ken observed his daughter playing with the new Nintendo game but he was displeased with the quality of the sound. (…) Ken concluded that a digital chip, dedicated solely to sound, would significantly improve the quality of the Nintendo gaming system.
Because the Sony Corporation was not involved in computer games, Ken Kutaragi negotiated to keep his job at Sony, while working as an outside consultant (entrepreneur) for Nintendo on their computer gaming devices. (…) After Ken’s success as a consultant to Nintendo the senior executives at Sony Corporation threatened to fire him. Fortunately for Ken, he had the strong support of Norio Ohga, the Chief Executive Officer of Sony Corporation. Chairman Ohga personally recognized the value of Ken’s creativity, entrepreneurial spirit, and innovation, so he encouraged Kutaragi’s efforts.
Then with the Sony Corporation CEO’s support (and begrudgingly the rest of Sony’s senior management’s blessing) Kutaragi continued to work as a part-time consultant to Nintendo. Ken successfully developed a CD-ROM-based system for Nintendo. Nintendo elected not to go forward with the CD-ROM system. Ken Kutaragi saw the market and business opportunity of computer gaming systems for Sony. With his Intrapreneurial spirit, Ken pressed hard to convince the Sony Corporation to enter the electronic gaming business.
While most of Sony’s senior management did not consider Ken’s computer gaming device more than a toy and not worthwhile for Sony, Chairman Ohga took a major chance and backed Kutaragi’s plan.
Ken was persistent and he went on to lead the effort to help Sony develop its own gaming system, which became the blockbuster product success “PlayStation”. (…) Ken Kutaragi fought against corporate “nea sayers” within Sony’s management ranks and Ken literally laid his job on the line at Sony to press for the creation of the computer gaming product within Sony (…)
Sony backed Ken’s corporate entrepreneurial (Intrapreneurial) venture by investing $2.5 billion into the PlayStation start-up, and has gone on to build over 70% of the home-video-game-console international market share. (…)
Ken’s Intrapreneurial (or corporate entrepreneurial) success has been called one of the greatest new business creations and launches in business history. (…) The financial success of the Sony PlayStation was so impressive that by 1998, the PlayStation was providing 40 percent of Sony Corporation’s operating profits.