by David DeJean
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Entrepreneurs are getting all the glory, but there may be even more opportunity in "intrapreneuring." Put it another way: The biggest source of New Economy jobs may be Old Economy companies.
There are a lot of Old Economy companies that are going to have to learn to play in this new game -- and that means a lot of spots on their rosters for people who can drive new ventures within existing companies.
But you have to be a special kind of person to do it. Martin Nisenholtz knows -- he is a true intrapreneur. Twice he has successfully launched new businesses within world-class companies. In 1983 he started the Interactive Marketing Group within Ogilvy & Mather Worldwide. It was the first creative development unit devoted specifically to interactive communication at a major US advertising agency.
Lightning struck a second time when he joined the New York Times as president of the newspaper company's Electronic Media Company in 1995. He is now CEO of New York Times Digital, where he was responsible for the development and delivery of electronic products centered on the content of the New York Times and the company's other media holdings.
It's really very much a personality issue, Nisenholtz says. "Spencer Stuart -- who is one himself -- once said it takes a new category of person that he called "human modem." This is a person who can work inside a traditional corporate bureaucracy and hire and fire people who can't work inside those kinds of companies."
The Human Modem Skill Set
It is, Nisenholtz says, a hugely underestimated set of skills. "If you look at the track records of executives who are put in charge of new ventures inside big companies, they're abysmal. The processes and values involved in creating what we're calling a New Economy company are so radically different that in fact there's almost no hope these people can succeed."
This problem of clashing cultures makes it difficult whether the leader is an insider, someone from within the organization tapped to spearhead the new initiative, or an outsider brought in precisely because they can do things differently.
The company's culture is the important factor, says Nisenholtz, so diplomatic skills are crucial. "You must come into the situation with an understanding of how to bridge that gap -- and it is a gap: People from inside the company can work with their colleagues, but they can't run fast and take risks. Outsiders can do that, but they may lack the patience to deal with the culture."
A lot depends on the culture you're moving into. If the culture itself is an entrepreneurial one, then moving it toward the Internet and the New Economy is not a huge cultural leap. Nisenholtz holds up Charles Schwab as a success story: "They've been very successful at turning themselves into an Internet company. The guy leading the charge has done an excellent job. But then the company has a history of being flexible and taking opportunities. Some companies, even large, established ones, won't require a huge cultural leap."
"You need to break glass in order to get stuff done," he says. "But you really need to calibrate your actions, to understand how big the distances are. It's not a simple thing for an entrepreneur to come in from outside and run the Internet division of a big company because it can't be run separately. It isn't separate. It's core to the company's success, and that means it's core to the company's culture.
If you're looking at an intrapreneuring opportunity with a large company, whether from inside or from outside, Nisenholtz has some advice:
- Make sure you understand the situation before you commit to it -- and that includes understanding the politics of the company. "I've seen ventures fail because of fragmented buy-in," says Nisenholtz. As a candidate you may be meeting with someone who knows what has to be done and buys into it, but may have four or five senior colleagues who aren't ready.
"All the players need to understand the importance of the venture," he says. "You shouldn't assume this work has been done. Drill in with the CEO about what his thoughts are on how this gap is going to be bridged."
- Be patient and diplomatic. Build and maintain relationships. You've got to create new value, but you can't do it by trampling on established values. Says Nisenholtz, "When The New York Times Co. decided to create a tracking stock for its digital operations, that was a huge example of creatively building value. But it was a big step for a very traditional company."
"We did a lot of work internally to make sure everyone understood the reasons for this move, why it was necessary, and how it would benefit not just people in the digital area, but the company as a whole. There's no substitute for doing that work, even though it means having occasionally difficult meetings, or working to bridge some very large gaps."
And the entrepreneurial successes of the New Economy may be making things more difficult rather than easier for intrapreneurs, according to Nisenholtz. "At Ogilvy & Mather in 1983 it was very new and different. We succeeded because we stayed as close to break-even or profit as we could. We stayed under the radar. In those years, it was possible to do that because the field was so nascent. Today, you need to be prepared to take much bigger risks. Because the successes -- and failures -- are so much bigger."
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