Executive column: On New Business: Intrapreneurship breeds innovation

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Intrapreneurship — or the art of functioning as an entrepreneur within a corporation — is becoming the lifeblood of companies whose hearts beat with innovation. This includes telecommunication operator PT XL Axiata, who established the New Business division tasked with delivering fresh products and services that would get people to consume broadband data. The company’s director and chief technology, content and new business officer, Dian Siswarini, recently caught up with The Jakarta Post’s Evi Mariani and Mariel Grazella on how intrapreneurship is not only meant to introduce innovative goods to the market, but also culture in the workplace.

Question: What are the new businesses XL is planning to introduce to the market?

Answer: We now run mobile advertising services through our 30 or so clients could place digital advertisements, in short text messages, multi media services or banners. Another business strategy is mobile finance. We are the first in Indonesia, through XL Tunai, to enable the sending of remittance. Now, we are trying our hands on physical forms of payments through Radio Frequency Identification (RFID) equipped mobile phones.

We are also working on mobile commerce by creating a market place where people could do their shopping. We are also setting our sights on machine-to-machine services by installing SIM cards in equipment, enabling different equipment to communicate with each other. We are also developing cloud services with software as a service and software as a service because the trend is heading toward mobile cloud.

The strategy of our New Business division is innovating as much as possible, showing that this division has no boundaries.

Many large technology companies nurture intrapreneurship by forming teams that are given much room to creatively come up with new products and services. How does XL espouse intrapreneurship?

When XL formed this division, we were more baffled than aware of what should be done because digital services was new territory to us.

One of the biggest challenge for telecommunication companies [telcos] is that they traditionally are operation-based companies, instead of innovation-centric. Entrepreneurship is not on our blood. So, once we formed the New Business division, we had to make considerable transformations not only on a business level, but also regarding corporate culture.

People in the division must be highly innovative and entrepreneurial, so keeping rigid processes akin to telecommunications, such as strictly working along standard operating procedures, would not work.

And so, our first order was discovering the division’s own culture and values. We formed a new team whose members differed in characteristic from those in older divisions. We want this division to mimic start up companies in which teams worked all-out.

So the first value we sought for in this division’s members was the mentality to make it happen so they would not feel repelled to try in face of restrictions. There are around 70 people in this team who we took into consideration regardless of their [educational] background as long as they have the right mindset.

These people must be result-oriented instead of process-oriented, which is largely the case for telecommunication companies.

How else does the New Business division maintain a start up vibe?

Here, employees are mostly in their 20s, although that makes me feel old sometimes. There is also less hierarchy, although there still are appointed leaders and their team members. I keep a maximum of three hierarchical tiers under myself and we are more like peers. We see ourselves as a pool of resources working towards a certain goal so we designed this fluid organizational structure based on our different function.

I also meet this team more intensively — up to three to four times a week — because this division needs more attention. This is unlike the other division I am also overseeing, which is the up and running technology division that allows me to manage it on autopilot mode.

We are now building a different office setting for this division. Their office will be laid out as an open office where there are no designated seats for people to mirror the less hierarchy concept we adopted.

The most critical factor more than office layout is to have leaders who are well versed with this new culture and values.

For yourself, do you find complications in running the technology division, which is quite rigid and the New Business division, which is very open?

I still hold control over the technological division. Personally, dealing with two distinct divisions is very complex.

As a person dealing with networks, I must bow to standard operating procedures, which if I change out of a creative whim, would impact the functioning of our networks. Meanwhile, the New Business division offers more elbow room. So, carrying out my responsibilities have bough tough as well as easy sides to it.

I have spent 21 years of my career in networks, and now, I have to show creativity. I usually get this rush of ideas for New Business when I talk to all sorts of people. I can even collect input when I am talking to my children or walking in Roxy [a mall synonymous with mobile phone shops]. Being able to talk with many people requires me to have strong networking.

Innovation involves trial and error. How does XL view any mistakes made by the new division?

Trial and error did not traditionally exist in XL because mistakes were costly. If we got things wrong, we were not allowed to repeat.

In the New Business division, however, we are not launching the final product, but beta versions that we will keep on refining. If we wait to get things perfect first, we would never launch and get left behind instead.

Thus, we had to change our mind set from 90 percent certitude and only 10 percent uncertainty, to allowing 60 percent certitude and 40 percent uncertainty.

How large of an investment did XL commit for this new division?

We are still riding on the back of the larger XL infrastructure. So, we do not have to build from scratch, instead building into the IT systems in place.

With significant financial results still faraway, how do you benchmark success in New Business?

For the first one to two years, we will not judge the performance of the new division based on revenues, but on whether we have succeeded in building the ecosystem, in collaborating with other telecommunication players and gaining eyeballs.

We have born in mind that the division, once it has grown to considerable size, has to stand independently to maintain its focus. But, that point is still a long way ahead given that we are still in the incubation stage.