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StrategyNov 08, 2012

Leveraging Intrapreneurship: A 7-Eleven Case Study

Credera Team

Image from The Wall Street Journal, “You Call That Innovation?

At this year’s Texas A&M University Retailing Summit, 7-Eleven and Credera led a discussion on Fortune 50 Innovation, How to Leverage Intrapreneurs for Retail Innovation: A 7-Eleven Case StudyMike Debnar, Senior Director of Digital Guest Experience with 7-Eleven, and Matt Levy, Managing Director with Credera, explained how unlocking the innovation DNA in an “85-year-old giant” starts by tapping into its own employee base.

Levy began the session by outlining how the word “innovation” has become commonplace.  According to a study conducted by Capgemini Consulting in April 2012, 43% of 260 executives confirmed their companies have a Chief Innovation Officer or similar role.  7-Eleven is no exception with its own “innovation team.”

7-Eleven has a history of innovation as described by Debnar.  In the 1920s, The Southland Ice Company in Dallas, Texas, managed docks that sold blocks of ice for home refrigeration.  But the invention of the mechanical refrigerator in 1926 was an unwelcome assault on the business.  However, in the summer of 1927 in a sleepy section of Dallas, an entrepreneurial ice dock manager named Uncle Johnny Green added milk, bread and eggs for the convenience of ice customers and stayed open on Sundays when no one else did.  Green turned a profit that summer, and the convenience-retailing industry was born.  Now, Southland Ice Company, renamed 7-Eleven, Inc. operates 48,000 stores in 16 countries with close to $76.6 billion in worldwide annual sales.  This growth can be attributed in part by 7-Eleven’s culture of intrapreneurship, the act of behaving like an entrepreneur while working within a large organization.

Disruptive Innovation

“Innovation,” stated Debnar, “is the driving force for intrapreneurship today at 7-Eleven.”  Debnar is especially fond of disruptive innovation.   “Disruptive innovation is an innovation that helps create a new market and value network,  and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology.”  Debnar recommends Clayton Christensen’s book, Innovators Dilemma, as a valuable resource for the intrapreneur.  Christensen explains two concepts – sustaining innovation and disruptive innovation.  “Both are crucial to corporations,” said Debnar.

Debnar challenged companies to be proactive and either prepare for or create disruptive innovation.  He relayed examples including the recent Netflix and Redbox examples and how these companies disrupted the movie rental segment and his former employer, Blockbuster.

Levy asked Debnar to explain how 7-Eleven encourages intrapreneurship.  Debnar explained how 7-Eleven’s open culture and structure allow all employees, from accounting to operations, to share their ideas for growth and innovation.  Employees are empowered to submit their game-changing ideas.  One idea in 2000 led to the development of the7-Eleven Presidential Coffee Cup Poll.  According to 7-Eleven, millions of Americans have participated by selecting specially marked coffee cups, blue for the Democrat candidate and red for the Republican candidate.  “Coffee cup voters” have successfully predicted previous elections. Recently, a 7-Eleven employee leveraged a new and innovative open API framework and took it upon himself to create an iPhone app for the Coffee Cup Poll.  7-Eleven has enabled employees and customers alike the opportunity to innovate on their behalf as they leverage the new API framework.

Credera’s leadership and expertise in strategy and innovation has played an important role in creating and supporting the implementation of the 7-Eleven Digital Guest Experience.  This initiative gives 7-Eleven the opportunity to increase customer retention while providing a more personal approach to new or improved products and services.

The One Thing

Levy continued the discussion by asking one final question, “For the aspiring intrapreneur, what is the one thing you wish you knew 10 years ago?”  Debnar replied that he would have involved more of his colleagues in the innovation process earlier on and throughout the process.  At times, innovators tend to work in silos and reveal ideas when the innovator deems them “ready” or complete.  Debnar recommends including multiple people in the process and seeking council from others.

How does your company allow for innovation?  How do you plan to prepare for or create the next disruptive innovation?  If you would like assistance, please contact us.