Exclusive Book Excerpt: How Companies like Quicken Loans, Intuit, and Atlassian are Reaping the Benefits of ‘Intrapreneurial Time’

Hugh Molotsi, Founder of the startup Ujama and former VP of the Intuit Labs Incubator.

Hugh Molotsi has been one of the key figures involved in accelerating the spread of design thinking and the lean startup methodology in Silicon Valley, and specifically at Intuit, the software company where Molotsi ran the Intuit Labs Incubator until 2015. Molotsi has also been a vocal advocate for giving all employees — not just the “chosen few” — the right time and training to be able to bring new ideas to life in their departments.

Now, Molotsi is distilling his advice on how to spur intrapreneurship inside large organizations in the book “The Intrapreneur’s Journey,” co-authored by Jeff Zias, a grassroots innovation leader still at Intuit. They’re funding the first run of the book on Kickstarter, which means they need to hit $30,000 in pre-orders for the digital or hardcover versions, expected to be released next month.

The book focuses on three “how to” topics:

  1.  How to tap into employees’ passion to drive growth
  2.  How to assess your organization using Molotsi and Zias’ Intrapreneurship model
  3.  How to use the authors’ “recipe book” for going from 0 to 100 (from no innovation program to a cohesive program that effectively drives growth.)

You can read an exclusive excerpt below that details a common challenge in large organizations: helping carve out dedicated time for employees to innovate. And you can pre-order a copy of “The Intrapreneur’s Journey” here.

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The Business Case for Intrapreneurship

Giving employees time and freedom to work on their own ideas makes great business sense. Imagine this case: One of your employees has an idea that may dramatically impact the fortunes of your company. What is the ONE thing she will need more than anything else? Time. She needs the time where she’s free to work on her idea. And believe it or not, she values this time and freedom more than she values incremental amounts of money.

“Intrapreneurial Time” is what we call the time and freedom employees get to work on their own ideas and push beyond the status quo. Intrapreneurial Time comes in various forms. One common, and often easy to execute type of Intrapreneurial Time Program is a Hack Day. Hack Days are immersive, full day experiences where your intrapreneurs develop ideas, prototypes or experiments that will help the company. Generally Hack Days last one day, although sometimes these Hack Days or Hackathons stretch across a multitude of days.

A second form of Intrapreneurial Time comes to life when companies support Allocated-time. Examples of effective Allocated-time programs are 3M’s “15 percent time rule,” Google’s “20 percent time,” Intuit’s “Unstructured Time,” and W.L. Gore’s “10 percent Dabble time.” With Allocated-time programs, employees develop the “mindset” of seizing the permission to add value in unexpected ways. Without an Allocated-time program, employees are much less likely to try enough things and won’t experiment broadly enough to create new breakthrough innovations.

When you allow employees to have Intrapreneurial Time, three primary business benefits come to life:

  1. Increased Employee Retention – Engagement and retention increase significantly in companies that give employees the time and freedom to be intrapreneurial.
  2. Increased Innovation – companies that give their employees more freedom are 20 times more innovative than companies with low freedom scores (according to the LRN research and other studies we we will explore). The more innovative breakthrough products drive revenue growth and increased profitability.
  3. Increased Growth and Profitability – companies that allow their employees more freedom are 10 times more likely to financially outperform companies with low freedom scores. Innovation alone is a fine thing, but high-freedom employees are also specifically more effective at driving financial wins because they are intrinsically motivated.

Increasing Employee Retention

Intrapreneurial Time gives employees a boost in intrinsic motivation, which in turn leads to increased job satisfaction. And when employees have high job satisfaction, retention is also high!

A 2006 study run out of Cornell University recorded the activities of 320 small businesses. Half of these small businesses consistently demonstrated old fashioned command and control management practices, but the other half gave employees time and freedom. The researchers referred to the difference in the two groups as stark differences in “autonomy.” The businesses that exercised command and control, giving the employee little or no time and freedom, experienced three times the turnover of the businesses that gave employees time and freedom.

The autonomy from Intrapreneurial Time heightens employee’s intrinsic motivation. And when intrinsically motivated, these employees are happier and more satisfied with their jobs than other employees. It’s clear, highly engaged, intrinsically motivated employees stay. And this is important because all companies need to retain their top talent. Without solid retention numbers, especially of their most creative and high potential employees, companies lose focus, progress slows, and business targets are missed.

As a case in point, Quicken Loans offers employees an Intrapreneurial Time program called “Bullet time,” a four hour weekly time allocation where employees can work on any idea they want to. Quicken Loans boasts an amazingly low 13 percent annual turnover rate. Increasing Innovation Intrapreneurial Time increases employees’ intrinsic motivation which leads them to do more creative work, resulting in more innovative outcomes. And the reasons that Intrapreneurial Time increases innovation are surprising. In the 1990’s, Harvard Professor Teresa Amabile led a team of researchers to conduct a unique experiment with artists. The researchers asked 23 painters and sculptors to submit some of their past works to an evaluation committee of experts (museum curators, art historians, gallery owners, etc.). Each artist randomly submitted 10 of their commissioned works and 10 non-commissioned works. Amabile presented the 460 pieces of art to the experts. Amabile and her colleagues reported that – “Our results were quite startling. The commissioned works were rated as significantly less creative than the non-commissioned works, yet they were not rated as different in technical quality.”

Bestselling author Daniel Pink leveraged Amabile’s research to assert a powerful conclusion within his book Drive: “if you want breakthrough work in your organization, carve out a small island – a week or even just a few days – for non-commissioned work.”

So we see that Intrapreneurial Time heightens employee’s intrinsic motivation. And when intrinsically motivated, employees do more creative work.

We repeatedly see that Intrapreneurial Time acts as an innovative creativity accelerant. Facebook’s “Like” button, Edison’s light bulb, the Nobel prize winning “Graphene” material, 3M’s Post-it notes, and so many other impressive innovations came from employees having the time and freedom to be intrapreneurs.

The most innovative companies empower employees to bring their passionate, creative selves to work each day. And these are the employees that tap into their passions to work on their own ideas, thereby innovating the creative future of their companies.

Increasing Revenue and Profits

Companies giving employees Intrapreneurial Time can enjoy faster and more profitable growth. A 2013 study from the Legal Research Network (better known as LRN, a compliance, legal and ethics research organization) showed that companies that allowed their employees more freedom were 10-20 times more likely to outperform companies with low freedom scores. LRN studied over 1,000 employees at hundreds of organizations and contrasted the 21 percent of the organizations who scored in the “high employee freedom” range with those in moderate and low freedom categories.

Yes, the data also implies that 79 percent of companies have an untapped potential to significantly increase revenue and profits. If yours is one of those companies, we’re here to help. Without a doubt, you want to be like the top 21 percent of companies in the “high freedom” category that are reaping revenue and impact from their intrapreneurs’ projects. Intrapreneurial Time programs empower employees to drive innovative growth. Google, as a special case in point, reports that 50 percent of all Google products have come from 20 percent time. Twenty-five percent of Google’s revenue comes from these 20 percent time projects. This data, although impressive, is underselling the reality. Google is essentially a company that leverages superior search technology to drive large revenue streams. That was the first and “best” business Google has. So when you look at what “new things” drive most revenue, 20 percent time shines much brighter. Without Intrapreneurial Time (in the “Allocated-time” 20 percent time form) Google would be lacking the inventive and strategic growth breakthroughs coming from GMail, AdSense, News, and Android mobile.

As another specific example, Intuit provides Intrapreneurial Time as Unstructured Time as well as Hack Days, Hack Weeks and Innovation Challenge contests. Intuit’s Intrapreneurial Time has generated over 500 “graduates,” meaning innovation projects that started in Intrapreneurial TIme but progress to be fully supported and shipped to internal or external customers.

Success stories abound. Australian software maker Atlassian’s thriving business recently added JIRA Service Desk as its fastest-growing product line. JIRA Service Desk was born during one of Atlassian’s quarterly “ShipIt Days,” where teams self form and hack on new experimental ideas.

Atlassian has long been a fast-growing company with a culture that fosters innovation. In a personal interview with Head of Atlassian R&D Programs, Dominic Price, he pointed out that ‘ShipIt’ is more than just a hackathon. “Many employees here at Atlassian describe ShipIt as ‘24 hours of opportunity’. Atlassians at every level participate, from last week’s hires to senior executives and the CEO. And we’re all given the same challenge: drop our day-to-day to identify and solve problems.”

At a ShipIt Day in 2013, Atlassian employees Andreas, Nick, Mike, Ross, and Scott had a new, adventurous idea: “What if we used JIRA to meet an important new need, a need that’s outside of JIRA’s current area of focus?”

They centered on an idea and spent 24 hours hacking together a simple portal to create ‘issues’ in JIRA. The implications were large. This “JIRA Service Desk” could use tickets to track any issue. What if this ticket tracking could transform the world of customer service? Most companies had issues with customer service, right?

They were in fact right. JIRA Service Desk was born. Customers soon flocked to JIRA Service Desk. A big unmet need was met, and the product became the fastest-growing product in the Atlassian’s history. The impact of JIRA Service Desk now goes beyond the product itself. Atlassian recently reorganized around a three point model of product types. The three product pillars are: (1) JIRA Software (designed for software developers), (2) JIRA Core (for users who want to use the product outside of software developer needs), and (3) JIRA Service Desk (the wildly popular customer service product).

This new product line, which started at ShipIt Days and was then built and grown during Atlassian 20 percent time, is now one of the three strategic cornerstones of the company.

The business case for giving employees Intrapreneurial Time is clear. When employees have time and freedom, retention is higher, the company becomes more innovative, and revenue and profits increase. But, in most cases this “change” means overcoming tough opposition within your company. Change is hard. People, to a large degree, want to maintain the status quo, keep their current place in the sun, staying with their current lower-risk and reasonable- reward way of living. Inertia must be overcome. You need to understand the pushback and have powerful arguments at the ready. Anticipating all the inertia and arguments against time and freedom will help you break through this “great wall of corporate inertia.”