Sunday, 5 April 2015

Intrapreneurship: should organisations embrace the on-the-clock pet-project approach?

In a business, pet-projects are small-scale projects of individual employees, under their full personal control, carried out within the organisation, often using resources of the organisation.

'Luminous idea' by Tiago Daniel
under a CC license
Pet-projects have gained visibility through the successful practices of companies such as Google, HP, 3M, Genetech, IBM and others. There, employees have been given the flexibility - and have even been encouraged - to allocate a percentage of their normal working time between 15 and 20% to a personal project of theirs that may be (and usually is) different to and independent from their ongoing work tasks.

But is the policy of allowing employee pet-projects worth it or is it just a (persistent but limited) hype?

Giving employees time to go after their projects leads to several benefits including:
  • Higher employee satisfaction and, thus, better loyalty rates
  • Boosted creativity and higher turnover of ideas and pilot projects; the organisation benefits from the increased "intrapreneurship"
  • Possibly smoother teamwork in the long run, as well as higher interaction and knowledge transfer across individuals within the organisation
  • Higher attractiveness to talented future employees

One needs to also take into account that, occasionally, promising pet-projects have turned into successful products. Such products include Google Maps, the humble - yet very, very successful - post-it paper, etc.

To be fair, in the case of Google, however, there are many, many other perks for its engineers that help ensure their satisfaction, creativity and productivity.

Despite the well known success stories of the pet-project scheme, there are some critical voices, too. After all, giving employees a free pass for the 20% of their person hours is quite generous; it is a day per week. Moreover, pet-project schemes typically apply to engineers and scientists within knowledge-intensive organisations; the workforce in manufacturing businesses often is not included.

As far as I know (and, to be clear, I'm neither an expert nor a scholar on the topic) there has been no dedicated cost-benefit study at the academic level. However, it is common belief that having happy and creative people in-house leads to competitive advantages. Additionally, while the cost of 20% of person-hours is not negligible, the cost of any overzealous administrative procedures could also reach high amounts. Thus, managing the latter frees space for pet-project schemes and leads to the bonus advantage of having a leaner and more flexible organisation.

So, at least for knowledge-based organisations operating on a reasonably stable financial basis, trying a pet-project policy for their employees would be an interesting idea. Of course, as any scheme investing in knowledge, the benefits may need some time to show up. But still, six months to a year of application should be enough to demonstrate if there is any added value or not - keeping in mind that benefits can appear in many different forms, not necessarily in the form of short-term revenue increase.

The examples mentioned above come from the world of private enterprises. Would pet-project policies and, overall, the intrapreneurship approach be appropriate for the public sector, as well?

Instinctively I would say, why not?

Of course, the public sector has a different management structure and its objectives, as distributed across the various public services tend to be rather steady over time. Additionally, there is the need for accountability for the spending of public money, from which the resources to host pet-projects would come. However, if the need for innovation, increasing performance, flexibility and effectiveness are also desired qualities for the public sector - which they are, indeed - then encouraging intrapreneurship within the public sector would make sense, too. Again, it could be launched at a pilot scale in knowledge-based public organisations and services, possibly within a more restrictive framework of - say - half a day per week, with the capacity to freeze the scheme depending on the overall organisation workload. Similarly to the private sector, any benefits should be visible within a year.

Of course, in the case of the public sector, besides having a solid plan to test a pet-project scheme, one also needs to have the expressed political backing and, perhaps, some supportive public concensus, too. Those last two things may need some time in order to build up.

At any rate, however, it might be worth considering intrapreneurship as a novel approach that could contribute to having better - private or public - organisations, powered by more creative and resourceful individuals.

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