Ask an Expert: Empower your employees

Q: I was wondering if you had any tips on how our business could be more entrepreneurial? We have been around for a long time, have about 25 employees, and so we are well past that creative, startup phase. -- Trisha

A: When you empower employees to think and act entrepreneurially, it is called "intrapreneurship." It might be an employee who comes up with a great idea or a staffer who heads a project that he or she came up with. Either way, it's internal entrepreneurship, or intrapreneurship. Intrapreneurship is win-win: It gets staff motivated and involved, and does so for the benefit of your business.

According to Gifford Pinchot, who first made the term intrapreneurship popular in his 1985 book, Intrapreneuring, "Look back at any great business or invention at just about any big company and you can find that intrapreneurs created it."

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When businesses set up an intrapreneurial environment, an environment that encourages risk-taking and innovation, the business benefits in very tangible ways. For starters, they will likely see a rise in the reliability, happiness, diligence, and productivity of their employees. Businesses have also found that encouraging intrapreneurship helps to attract and retain top talent. Also, when employees can act creatively and explore their best ideas, they experience higher levels of job satisfaction. Ultimately then, intrapreneurship increases employee retention rates, boosts productivity, and fosters an exceptional culture.

Richard Branson says that when Virgin began its mobile phone division, they were new to the niche, and so to get up to speed quickly, they hired top managers from rival companies and gave them the freedom to set up internal ventures of their own. This intrapreneurial process resulted in innovative thinking and a very profitable new business. In Entrepreneur Magazine, Branson writes, "What if CEO stood for 'chief enabling officer'? What if that CEO's primary role were to nurture a bree! d of intrapreneurs who would grow into tomorrow's entrepreneurs?"

Steve Jobs once said this: "Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it."

So it would behoove the small business owner to take a page out of the book of these pros, "get it," and become more intrapreneurial. Here are a few ways to do so:

1. Give them resources and encourage them: Employees need to know that you value this idea of intrapreneurship enough to support it with more than just talk. Give folks the time and resources necessary to flush out and launch their best ideas.

2. Make failure an option. If you want employees to take risks, you have to encourage risk taking, and that means making it OK for them to make mistakes and fail. Because it is only when failure is an option that employees will be willing to risk their reputation on an idea.

3. Have fun. Anything that can be done in the spirit of fun can reap big rewards. Creative thinking workshops or classes can get employees' juices flowing.

4. Recognize them: Even if it is something as simple as giving a prize for the best idea in a suggestion box, employees should see that their ideas are valued and being acted upon.

5. Reward them financially: Nothing talks like money. Employees who have a financial stake in the business are more conscientious, harder working, and happier. They will also be even more passionate about the project that they have launched and more motivated to ensure it is successful.

If you want your people to act entrepreneurially, then reward them accordingly.

Today's tip: Google gives not only engineers, but also all employees, 20 percent free time to work on projects of their own choosing that can benefit the company.

Here is how the process works: Intrapreneurs at Google are encouraged to discuss ! their ide! as and get creative input from coworkers. Then, after refinement by the crowd, there is a formal review process. A project proposal and timeline is submitted and the intrapreneur must describe how he or she plans to go about evaluating the success of the project. Once an outstanding project has been selected, the project is monitored, analyzed, implemented.

Gmail, AdSense, and Orkut were all started by Intraprenurial Google employees.

Steve Strauss is a lawyer specializing in small business and entrepreneurship. His column appears Mondays. E-mail Steve at: sstrauss@mrallbiz.com. An archive of his columns is here. His website is TheSelfEmployed.