Why intrapreneurship in finance?
Madeleine Evans of Finance Matters blogs about the reality of financial intrapreneurship.
In the years since the financial crisis, the introduction of blockchain and the rise of peer-to-peer marketplaces have given rise to a seductive vision of finance as a dis-intermediated, consumer-focused industry. Increased public interest in models of blended value investing have likewise given more weight to the idea that the financial industry can one day operate on long-term, broader definitions of value, risk and gain.
Reality is still very different.
Despite mergers and divestments, redundancies, and changes in regulation and legislation, we still have large financial institutions intermediating our savings & investments, complex transaction and payment systems, and layers of asset managers and advisors influencing the allocation of capital and risk – generally with a short-term horizon and a narrow focus on cash and financial metrics.
There’s a simple reason for this inertia: industries don’t build, or re-build, themselves.
Here’s the good news: Our financial system is simply a system of organisations. With creativity and leadership from individuals within these organisations, institutional and systemic change are imminently achievable.
This is the role for intrapreneurs.
Are you an intrapreneur?
The term intrapreneur is generally attributed to Gustav Pinchot (1984), and it was introduced to the American Heritage Dictionary in 1992. Intrapreneurship is a relatively new term for an increasingly necessary activity – driving innovative action from within existing institutions. Their role is to create new products, services, behaviours, or even entirely new organising structures and business models, from old ones.
Intrapreneurs exhibit many of the same characteristics of entrepreneurs*, such as a desire for innovation, the ability to see further than others and a willingness to take personal risk. Unlike entrepreneurs, however, intrapreneurs need to navigate the political, social, and cultural environment of an existing organisation in order to bring their ideas to reality.
Sometimes, intrapreneurs are designated – such as an individual selected to research and present a new product concept to a board. More often, intrapreneurs are made – by taking a calculated and long- term risk with her position and political capital in an effort to introduce new ideas that power future corporate success.
*The substantial overlap is summed up neatly little diagram from The Social Intrapreneur: A Field Guide for Corporate Changemakers
What can you achieve with intrapreneurship?
Examples of intrapreneurship in finance might include:
- As an executive at a retail bank, launching a corporate venturing initiative to seek out consumer-friendly banking technologies for partnership or acquisition, which breathes new life into your bank’s consumer relationship and reputation
- As an Associate at a private equity firm, developing a new approach to diligence that considers climate change risk factors with greater prominence, which gets adopted as a result of your initiative and engagement upwards
- As a member of a bank’s risk-management function, introducing additional stress test scenarios to take into account changes in the risk profile of assets as a result of climate change, catalysing more holistic risk management
- As Director at an accounting firm, creating an skills-based volunteering programme that sends six employees out to a non-profit organisation to provide small business accounting advice once a month, increasing employee retention and community engagement
- As an analyst within a financial services regulator, introducing the impact of mortgage lending practices on economic and social equality to the agenda at a meeting when systemic risks are being considered, launching a wider inquiry into the issue
Even small-scale attempts to introduce new or creative thinking can require substantial personal and professional risk. If you’re an investment banking analyst, this might include introducing a wild-card recommendation in your pitch deck that highlights a sustainability-minded company; as an investment analyst, you might run additional modeling scenarios that assess the impact of a higher carbon tax on valuation. These small changes, to the extent they are innovative and geared toward long-term organisational sustainability, can also be considered intrapreneurship.
How can you become an intrapreneur?
To create sustainable change within your financial organisation, start by ensuring you have a rich understanding of the wider commercial and social environment. Seek out conversions with diverse, curious people with a deep firsthand knowledge of the industry or expertise in a new technology or process. These connections will help you generate ideas for innovation within your own company that will reflect new commercial realities or allow your organisation to respond positively to market trends.
At the same time, build a close-knit circle of fellow creators and innovators. Focus your time on those individuals who strike you with their energy, and who share a complementary or parallel vision. Intrapreneurship can be a lonely path, and often marked with failure. These are the people who will provide that crucial emotional and practical advice throughout your journey.
Finance Matters, the organisation I co-founded with Roberta Benedetti del Rio three years ago, offers a chance for you to do both these things.
We provide the tools that finance professionals need to turn a single-bottom line career into a double- or triple-bottom-line one – whether through workplace innovation and intrapreneurship, moving to an impact-focused role, or investing personal time & money in companies and projects that drive meaningful positive social and environmental change.
Today, we are a community of over 1,300 individuals. We have an online resources and careers platform for innovative finance professionals, and have hosted dozens of events and workshops that provide new knowledge or help our members new concepts into practice.
With a strong personal network, focus your efforts on understanding the resources, power structures, and personal priorities of those who you work with within your organisation and those who you will have to work with to create change. From there, the path by which you evolve your organisation will be your own!
Madeleine Evans is the co-founder Finance Matters, an organisation empowering finance professionals to make changes positive changes for our society and economy within their organisations and with the personal resources they have at hand.
Read more about Finance Matters or register for their weekly newsletter on the Finance Matters’ website.