Entrepreneur vs. Intrapreneur

November 10th, 2011

In the recent Entrepreneur of the Year Awards, we’ve been seeing more of what we call Intrapreneurs being recognized and in fact, winning the Entrepreneur of the Year Award.

We have a saying in Go Negosyo, “Not all may be entrepreneurs but EVERYONE CAN BE ENTERPRISING”.  One can be entrepreneurial, whatever his role is (be it in a corporation, own business, or even government), with the mindset and passion to innovate and maximize the opportunities in market gaps.  Referred to as “game changers”, they redefine competition and set new standards that make people’s lives better.
Manny V. Pangilinan, Chairman of PLDT, Smart Communications and the TV5 Network, is one of the country’s top intrapreneurs.  He’s a professional manager who has the passion and creativity that matches, or even surpasses many founding entrepreneurs. He looks after his businesses as if they were his own.

Many of the founding entrepreneurs are in their 70s or 80s today and it is either the second or third generation who has taken over business management. It’s so important for the survival of the company that the entrepreneurship spirit is passed on from generation to generation to what we now call the intrapreneurs.

We’ve asked our entrepreneurship and marketing gurus what the difference is between an entrepreneur and intraprenuer. Go Negosyo Angelpreneur Andy Ferreria says…

“What’s similar is their mindset. Both have the entrepreneurial mindset driven by passion and a source of innovation. The only difference is ownership.

Entrepreneurs have full and controlling ownership of the firm. Corporate entrepreneurs do not have controlling ownership of the firm, [as with Manny V. Pangilinan, Nestor Tan of BDO, the executives of Ayala, or me from Avis], ‘cause [we don’t] have controlling ownership.”

When I asked another Angelpreneur and author of bestseller The WE Entrepreneur Josiah Go, he says…

“The criteria for the best entrepreneurs are: a) owner of stocks; b) responsible for startup OR if not, revival, either through a new business model or new insight; c) an industry catalyst and proven sustainable. Some examples are Fe Agudo for Hyundai, Lance Gokongwei for starting up Cebu Pacific, or Fred Uytengsu [of Alaska Milk Corporation] and [Erramon] Aboitiz [for Aboitiz Power Corporation] for their new insight.”

Tommy Lopez explained the differentiation in length…

“The classic definition of an entrepreneur is an individual who runs his own firm and grows it to great heights of performance; the general notion of the intrapreneur, on the other hand, is a professional manager who creatively and innovatively leads his firm to also great levels of business performance.

For me, entrepreneurship is first and foremost about the outcome.  It’s about new demand creation, which then leads to new wealth creation, which then leads to true economic development.

In other words, if markets are mature and players just compete for the same demand, that’s not true entrepreneurship.

There are two types of entrepreneurs—or two types of wealth creators: the individual owner of a firm and a corporate manager.

The entrepreneurial owner of a firm, typically, an SME, has really no avenues for real growth except to create new demand, because current demand is already being fought over by current, typically large players.  So he concentrates on uncovering new territory, new markets, with new products.  Internally, he’s lord and master of his own domain, with exclusive control over the deployment of his resources and assets, limited as they may be.  He only has to understand opportunities in the external environment and must have a radical vision of what he wishes to be. Therefore the individual entrepreneur is capable of rapid, exponential growth.

The corporate manager on the other hand is competing typically in large, mature markets and leads his organization in trying to grab a larger share of flat demand.  Therefore, the typical growth in percentage is marginal, though in absolute amount may be large due to scale.  He also has to deal with not only the external environment, but typically with very bureaucratic internal systems and processes that curtail his ability to truly break new ground in the search for higher growth.  It’s when the corporate manager is able to overcome the inherent inefficiencies of large, established organizations and leads to explosive industry reshaping growth (with dramatically new demand) that he becomes truly entrepreneurial.

Therefore, for the entrepreneur owner or the intrapreneur corporate manager to really be called entrepreneurial, they must be able to stimulate new demand, create new wealth and therefore spur a country’s economy towards truly to a growth path.”

It all boils down to having an entrepreneurial mindset, to innovate and take the business model to the next level. They’re able to delight the consumers, giving them what they want or even what they ‘will’ want. “Insanely amazing,” as what the late entrepreneur-innovator Steve Jobs would say on new innovations in the market.