Encouraging Employee Innovation: Building "Intrapreneurs"

Creating a culture of success from within

Dave Lindenstruth still had a day job in 2006 when he launched the start-up that today operates four HuHot Mongolian Grill locations in Wisconsin. As president and CEO of Appetize, he tells employees what he wants the business to accomplish rather than telling each one what to do. The result, he says, is that everyone in the company, from dishwashers to managers and executives, knows how to play a role in the growth of the business.

Employees' ideas have value only if they align with the company's mission, says Amy Pietsch, director of the Fox Valley Technical College Venture Center in Oshkosh, who has worked with Lindenstruth. And for that to happen, business owners must communicate their goals to the staff.

Pietsch provides counseling to many small business owners who feel unable to let anything go 'because no one else will do it right.' She finds that often, business owners have perfect clarity about their expectations, but only in their own minds—they've failed to provide employees with a tangible sense of what is expected of them. 'We have this very romanticized vision of entrepreneurship. It's about this lone person who's out there defying the odds,' she says. 'And that in reality is a myth. Successful small business owners and entrepreneurs know they need to build a team.'

That team needs to be supported by a corporate culture that encourages employees to share ideas and teaches them how to offer suggestions. For example, Pietsch says, staffers have to understand that they need to make the business case for their proposals and present the owner not just with the idea itself, but also the research to support its value. Once they've done that, the owner is obliged to listen—one of the hallmarks of a good leader.

It's also important to cultivate a culture that doesn't exclude anyone from intrapreneurial opportunity. 'Make sure everyone in your operation knows why they're there and how their talents can contribute to reaching the company's goals,' Pietsch says.

Employee recognition and reward programs can play an important role in keeping the ideas coming. Lindenstruth is in the process of rolling out an incentive program for which all employees are eligible. The company has let each person know the criteria being measured and has explained that everyone can earn bonuses for improved performance.

Pietsch notes that recognition can be as important as monetary rewards and that it's important to give employees credit for efforts as well as success. She adds that initiatives that don't work out as hoped can show the way to a future success. 'You want them to build on that knowledge and use that when they come up with their next idea, so you don't want to discourage them.'

The same is true of ideas the company decides not to implement, Lindenstruth adds. 'Even if you don't take them up on it, give them feedback. It reinforces that culture and shows that you're listening to them.'

To learn more about creating an intrepreneurial environment, check out this presentation by Kansas State University economics professor Dr. William Souder.