BEIJING          CAMBRIDGE               CASABLANCA                CHICAGO             DELHI         DUBAI          HONG K...
Agenda                 Objectives for the Day and Introductions                                                          ...
Today’s Objectives         We are here because we believe in entrepreneurship. Today we hope to emphasize         why it m...
Introductions: Who We Are                           Francesco Fazio             Joel Finlayson   Neil Pearse              ...
Agenda                 Objectives for the Day and Introductions                                                          ...
Entrepreneurship is at the essence of strategy             Relentlessly             explore             new and           ...
Defining Entrepreneurship… in Your Own Words (1/2)      Q1: In your own words, how do you define entrepreneurship?        ...
Defining Entrepreneurship… in Your Own Words (2/2)      Q1: In your own words, how do you define entrepreneurship?        ...
Myths and Truths about Entrepreneurship         Entrepreneurship is more commonly associated with start-ups... not large o...
Entrepreneurial Environments Matter         Entrepreneurial environments benefit employees, companies and ultimately the e...
Barriers to Entrepreneurships         Barriers still exist particularly within large (monopolies or formerly state owned) ...
Enablers of Entrepreneurial Organizations         Successful entrepreneurial firms start by making entrepreneurship an exp...
Who’s Doing This?         We have looked at a number of entrepreneurial initiatives run by some of the world’s         lea...
What we Have Learned         We have identified 5 common themes to create entrepreneurial environments              Conven...
1      Leadership from the Top         The Theory         Top management plays the primary role in the development of entr...
1      Leadership from the Top         Amazon Performance Review      Amazon has grown in the largest online retailer in t...
1      Leadership from the Top         Amazon Strategy: Entrepreneurship at Every Level                                   ...
1      Leadership from the Top         Jeff Bezos’ Commitment to Entrepreneurship                                         ...
1      Leadership from the Top         Results of Entrepreneurship at Amazon             2010                  “Passion an...
1      Leadership from the Top         3M Performance Review         3M has outperformed the market the market in the last...
1      Leadership from the Top         3M Strategy: Diversification Leads the Way                                         ...
1      Leadership from the Top         A History of Entrepreneurship       1902                                           ...
1      Leadership from the Top         Strategic Importance of Entrepreneurship         Entrepreneurship matters a lot to ...
Agenda                 Objectives for the Day and Introductions                                                          ...
Exercise One: Entrepreneurship as a Strategic Choice                                                       Exercise One: E...
Agenda                 Objectives for the Day and Introductions                                                          ...
Key Levers for Entrepreneurial Environments         We have identified 5 common themes to create entrepreneurial environme...
2      Right Incentives and Rewards         The Theory         Ensuring adequate rewards – beyond pure financial rewards -...
2      Right Incentives and Rewards         Rewarding Performance “The Vodafone Way”      Shifted the work culture of empl...
2      Right Incentives and Rewards         Incentivizing and Empowering Employees         Provides incentives based on cu...
3      Employee Self-Direction         The Theory         Allowing employees to direct themselves – within reason - in the...
3      Employee Self-Direction         2o% time policy at Google         Google’s 20% time policy provides employees with ...
3      Employee Self-Direction         Atlassian “FedEx Day” Challenge         Encourages risk-taking and creative thinkin...
3      Employee Self-Direction         A Video on Atlassian                                                          A vid...
4      Celebrating Failures         The Theory         Learning to accept failure - as an opportunity to learn - provides ...
4      Celebrating Failures         Tata “Dare To Try” Award         Tata has implemented a unique award designed to encou...
4      Celebrating Failures         BMW “Creative Error of the Month” Award         From 1990 to 1993, BMW broke down trad...
5      Workspace Design         The Theory         Physical space matters                                                 ...
5      Workspace Design         Key Design Principles and Benefits         Redesigning the physical office workspace to be...
5      Workspace Design         An Illustration: Red Bull London                                                          ...
5      Workspace Design         An Illustration: ANZ Head Office, MelbourneNote: ANZ is the fourth largest bank in Austral...
5      Workspace Design         Impact on Entrepreneurship at Telenor         Telenor relocated 6,000 employees from 40 se...
Agenda                 Objectives for the Day and Introductions                                                       8:3...
Exercise Two: Barriers and Enablers in Your Organizations                                                       Exercise T...
Survey Findings Review        Fear of failure, lack of incentives impede entrepreneurial behavior        Lack of employee ...
Survey Findings Review        How would respondents make firms more entrepreneurial?      Q13:              If you could c...
Survey Findings Review        What’s keeping change from happening?      Q14:              Why do you think your organizat...
Agenda                 Objectives for the Day and Introductions                                                          ...
Recap of What We Learned         3 Types of Enablers of Entrepreneurial Organizations         Successful companies build t...
Recap of What We Learned         5 Levers – from Conventional to Bold - to Spur Entrepreneurship         We have identifie...
Recap of What We Learned         Strategic Importance of Entrepreneurship         Entrepreneurship matters a lot to a few,...
Revisiting Your Positioning on the 2x2         Where do you feel are in this map now? What caused your assessment to chang...
Positioning of the Case Studies on the 2x2                                                        Critical                ...
Thank you. For More Information About this Topic                      Published: March 2011                               ...
Selection of Recent Articles from Monitor Group                 Building Entrepreneurial                  Inside the Mind ...
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Creating Entrepreneurial Work Environments

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We are here because we believe in entrepreneurship. We hope to emphasize why it matters, illustrate how to do it better, and have fun.

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Creating Entrepreneurial Work Environments

  1. 1. BEIJING CAMBRIDGE CASABLANCA CHICAGO DELHI DUBAI HONG KONG JOHANNESBURGLONDON LOS ANGELES MADRID MOSCOW MUMBAI MUNICH NEW YORK PARIS RIYADHSAN FRANCISCO SÃO PAULO SEOUL SHANGHAI SINGAPORE TOKYO TORONTO ZURICH Creating Entrepreneurial Work Environments Executive Seminar for MILE Jeddah, March 28, 2011Copyright © 2011 by Monitor Company Group, L.P.No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means — electronic, mechanical, photocopying,recording, or otherwise — without the permission of Monitor Company Group, L.P.This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion.COMPANY CONFIDENTIAL
  2. 2. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 2
  3. 3. Today’s Objectives We are here because we believe in entrepreneurship. Today we hope to emphasize why it matters, illustrate how to do it better, and have fun  Understand of why entrepreneurship matters in a corporate environment  Review the barriers to nurturing entrepreneurial behavior among your employees  Learn practical ways to make your work place more entrepreneurial, through case studies and vibrant idea sharing  Put your own ideas to the test through some exercises with your peers  Have fun!MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 3
  4. 4. Introductions: Who We Are Francesco Fazio Joel Finlayson Neil Pearse James Carty Noura Al-Turki Dr 3M, MILEMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 4
  5. 5. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 5
  6. 6. Entrepreneurship is at the essence of strategy Relentlessly explore new and different ways to compete and growMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 6
  7. 7. Defining Entrepreneurship… in Your Own Words (1/2) Q1: In your own words, how do you define entrepreneurship? “Ability to start new businesses, having the right intuition for new market opportunities, and having the courage to invest in new technology, with creativity” “Creating a new business… with limited resources and maximum freedom” “Taking the initiative to commit oneself (and other resources) to a high-potential venture which entails a significant level of uncertainty and risk, and persisting to see it through to successful completion”Source: Monitor Survey on Entrepreneurial Environments in the Middle East. Executive Seminar, Jeddah, March 28.MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 7
  8. 8. Defining Entrepreneurship… in Your Own Words (2/2) Q1: In your own words, how do you define entrepreneurship? “A wonderful, but difficult experience that a lot of people desire, but few will ever try” “Creating a think tank environment to develop ideas and ventures… trying new things, and experiment” “Utilizing knowledge, experience and ideas to develop businesses that earn money” “Undertaking risks … in an innovative way …working for oneself or for a company”Source: Monitor Survey on Entrepreneurial Environments in the Middle East. Executive Seminar, Jeddah, March 28.MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 8
  9. 9. Myths and Truths about Entrepreneurship Entrepreneurship is more commonly associated with start-ups... not large organizations Myths Truths “Entrepreneurship only An increasing number of exists in small, start-up large companies are type companies” becoming Corporate (e.g., large companies require Entrepreneurs rigid systems and controls) (maintained entrepreneurial focus and reinvented themselves) “Due to regulatory and There are numerous cultural factors, examples of high-growth, entrepreneurship does not driven entrepreneurs in exist in the Middle East” the region (e.g., fear of failure or losing face, (barriers exist, however, especially stifling regulatory environments) for state owned companies)MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 9
  10. 10. Entrepreneurial Environments Matter Entrepreneurial environments benefit employees, companies and ultimately the economy Employee Benefits Company Benefits  Higher Satisfaction, as they are provided  Ability to react faster, to market with greater responsibility early on changes  Greater commitment, as they feel valued Benefits  Better, broader innovation, and part of the team to the through improved collaboration; and from Economy everywhere in the firm, not just R&D  Increased learning & development, as they try and experiment new ideas  Lower employee churn  Improved performance, as they feel  Higher return on human capital more ownership for their own actionsMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 10
  11. 11. Barriers to Entrepreneurships Barriers still exist particularly within large (monopolies or formerly state owned) enterprises Direct Influence Indirect Cultural Organizational Educational Regulatory Very hierarchical Inefficient process Cultural focus on Education system structures; no for launching new consensus thinking; focused on learning incentives/rewards businesses or ideas, risk adversity; fear by repetition vs. for entrepreneurial low ease of doing of failure critical thinking behaviors business With deliberate plans and good design, you can drive changeMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 11
  12. 12. Enablers of Entrepreneurial Organizations Successful entrepreneurial firms start by making entrepreneurship an explicit strategic choice DIRECTION  Making entrepreneurship an explicit strategic choice Entrepreneurial ARCHITECTURE BEHAVIOR Organizations  Targeted incentives  Collaboration and rewards and sharing of  Flexible, rotational ideas programs  Taking risks and  Open workspaces celebrating failuresMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 12
  13. 13. Who’s Doing This? We have looked at a number of entrepreneurial initiatives run by some of the world’s leading organizations Examples of Entrepreneurial EnvironmentsMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 13
  14. 14. What we Have Learned We have identified 5 common themes to create entrepreneurial environments Conventional 1 Leadership from the top ‫‏‬ (Direction) 2 Right Incentives and Rewards ‫‏‬ (Architecture) (Architecture / 3 Employee Self-Direction ‫‏‬ Behavior) 4 “Celebrating” Failures ‫‏‬ (Behavior) 5 Workspace Design ‫‏‬ (Architecture) BoldMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 14
  15. 15. 1 Leadership from the Top The Theory Top management plays the primary role in the development of entrepreneurial environments  Makes entrepreneurship a strategic choice  Sets the example Direction  Sets expectations  Sponsors initiatives  Leverages existing assets (e.g. brand,  Encourages risk-taking people, infrastructure) Architecture Behavior  Fosters a culture of trust  Provides access to and collaboration capitalMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 15
  16. 16. 1 Leadership from the Top Amazon Performance Review Amazon has grown in the largest online retailer in the world, giving substantial return to its shareholders Stock Price of Amazon and its Competitors, June 1997– Mar 2011 200 10000 Amazon Amazon has outperformed ebay the market and E-bay on NASDAQ Index the success of the kindle 7500 Stock Prices USD NASDAQ Index 100 5000 2500 0 0 Jun-97 Jun-98 Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Dec-10 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09Source: Capital IQ; Yahoo FinanceMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 16
  17. 17. 1 Leadership from the Top Amazon Strategy: Entrepreneurship at Every Level Entrepreneurship as a Strategic Choice What are our goals and aspirations? Where are we going to play? How are we going to win? What are the required  Originallyto be the capabilities? world’s leading Channel: Online Only online bookstore… Culture: … to foster  Foster entrepreneurial entrepreneurship Categories: … then to become behaviors & employee  Consumer goods:  Provide employees the leading online Books & CDs… tools driven ideas freedom to decide retailer  Digital media Entrepreneurship at  Electronics  Develop internal  To enter one new every level: … innovation platform business each year  Product development: … for peer review (e.g. Android App Hosted (3rd party) Store launched Geography: merchants, Prime, EC2.. March 25th)  Expand internal  Procurement:  50% US Manufacturer sourcing investment platform  50% International  Fulfillment: Flat fee for employee ideas (Europe #2, Asia #3) annual delivery  Technology: CRM Innovation  HR: (see next column)MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 17
  18. 18. 1 Leadership from the Top Jeff Bezos’ Commitment to Entrepreneurship 2005 “Amazon excels at different kinds of entrepreneurship – from creating new ways to doing business… to making small changes that improve the online store.” 2007 “Not all executives are committed to making entrepreneurship a top priority … the difference Jeff Bezos, CEO between a company whose CEO and leadership team have an “all-in” mentality on entrepreneurship, and the one who is not, is unmistakable – and so is the impact on the company’s culture and results.” 2009 “We have entrepreneurs at every level of Amazon. This does not necessarily mean that every employee is responsible for creating the next breakthrough product. It does mean everyone must look for and find ways to do their work better than it’s ever been done before, and to do that as often as possibleMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 18
  19. 19. 1 Leadership from the Top Results of Entrepreneurship at Amazon 2010 “Passion and innovation seem to go a long way. We could have been satisfied with revolutionizing the way we find and buy books…. but we wanted to revolutionize the way we read them too”MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 19
  20. 20. 1 Leadership from the Top 3M Performance Review 3M has outperformed the market the market in the last 10 years, and has enjoyed a rapid recovery post 2009 recession Stock Price of 3M and its Competitors, Feb 1968 – Mar 2011 120 3M has outperformed 15000 3M competitors on its EI DuPont de Nemours & Co. (Du Pont) relentless focus on new 12500 Avery Dennison Corporation product introductions 90 Stock Prices USD NYSE Index NYSE Index 10000 60 7500 5000 30 2500 0 0 Feb-68 Apr-71 Jun-74 Jun-85 Jun-96 Jun-07 Aug-88 Aug-77 Aug-99 Aug-10 Nov-72 Oct-80 Nov-83 Oct-91 Nov-94 Oct-02 Nov-05 Sep-69 Jan-76 Mar-79 Jan-87 Mar-90 Jan-98 Mar-01 Jan-09 May-82 May-93 May-04Source: Capital IQ; Yahoo FinanceMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 20
  21. 21. 1 Leadership from the Top 3M Strategy: Diversification Leads the Way Entrepreneurship as a Strategic Choice What are our goals and aspirations? Where are we going to play? How are we going to win? What are the required  Exceed market capabilities? growth Geography : Corporate Culture: … to foster  Invest in emerging  Generate 30% of entrepreneurship markets (Brasil, China,  Nurture innovation revenue from new India, Indonesia)  Provide (some)  15 % Time Allocation products in past five  Expand in international employee autonomy Option for individual years mature markets  Remove the stigma projects  Growth in all six from failure Key Industry Emphasis:  Dedicated corporate business divisions  Consumer & Office Invest in the future: seed capital for new  Display & Graphics  Dedication to R&D ideas  Healthcare  New venture funding  Members of new venture  Communications  Localize labs and research facilities teams that do not  Industrial & succeed are guaranteed transportation Safety Cost Control: their jobs  Safety, Security and  Reducing Protection Services  Maintain R&D spending manufacturing costs  Shorten supply chain of US$1BMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 21
  22. 22. 1 Leadership from the Top A History of Entrepreneurship 1902 2010 Minnesota Mining and William L. McKnight Manufacturing Co. CEO, 1929-1966 Legendary, Inspirational Leader Flexible Sandpaper “At 3M, we stimulate ordinary people to produce extraordinary performance”.  USD 27 billion sales  60,000 Products; 20+ brands "Hire good people and let them do their job in their own ways. And tolerate mistakes"  500 new products per year "We do think innovation is more than an  R&D 5-7% of Sales, 2x average manuf. accident, and that you can create the right  30% sales from new products in last 5-year entrepreneurial environment for it”.MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 22
  23. 23. 1 Leadership from the Top Strategic Importance of Entrepreneurship Entrepreneurship matters a lot to a few, and a little for everybody. Regardless of your company size, and your industry, entrepreneurship can drive significant advantage A lot for a few: truly disruptive business models (e.g. Amazon); high growth industries (e.g. internet, high tech) In the middle: transformative businesses in industries with some degree of competition and growth Entrepreneurship at the core of the business A little for everybody: marginally incremental business models; deeply competitive, low growth industries Even in the periphery, however, companies can derive great value from entrepreneurship – see 3MMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 23
  24. 24. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 24
  25. 25. Exercise One: Entrepreneurship as a Strategic Choice Exercise One: Entrepreneurship as a Strategic Choice Part 1: Table Discussion (30 min) Name: _____________  Map your company on the 2x2 Organization: _____________  Discuss amongst your table partners: – How important is entrepreneurship Critical in your organization, and why? – How good do you feel your company is at nurturing entrepreneurship? How Important Is Entrepreneurship? Part 2: Report-out and Q&A (30 min)  A volunteer from each table will report the key insights from the conversation Marginal  Plenary discussion and Q&A as a group Novice Expert How Good Are We at Entrepreneurship?MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 25
  26. 26. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 26
  27. 27. Key Levers for Entrepreneurial Environments We have identified 5 common themes to create entrepreneurial environments Conventional 1 Leadership from the top ‫‏‬ (Direction) 2 Right Incentives and Rewards ‫‏‬ (Architecture) (Architecture / 3 Employee Self-Direction ‫‏‬ Behavior) 4 “Celebrating” Failures ‫‏‬ (Behavior) 5 Workspace Design ‫‏‬ (Architecture) BoldMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 27
  28. 28. 2 Right Incentives and Rewards The Theory Ensuring adequate rewards – beyond pure financial rewards - can incentivise employees to behave in a more entrepreneurial manner  Pay rises / Bonuses Financial  Target driven compensation Rewards … What  Awards / prizes motivates Psychological  Public recognition people? Rewards …  Empowerment Satisfaction  Increased autonomy …MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 28
  29. 29. 2 Right Incentives and Rewards Rewarding Performance “The Vodafone Way” Shifted the work culture of employees towards greater entrepreneurship, customer focus  High employee engagement & satisfaction “The Vodafone Way” – Employee Engagement: 76% – Vodafone Pride Index: 83%  Defines key behaviors & Example behavior: Senior leaders – Manager Index: 72% (experience goals for employees spend one day a month in a retail that managers create for their teams) store with employees and customers  Quarterly performance  Career advancement: reviews and – Development Index: 71% recognitions – 40% from Inspire promoted to more senior roles (2010)  “Inspire” talent management program  Low turnover (13%) for top performers Example recognition in the Vodafone Sustainability Report.  Senior management diversity Total of 85 heroes in 2009 (26 nationalities)Note: Vodafone was founded in 1982, operates in 70 countries, has 330 million subscribers; it employs 85,000+ globally; USD 70 Bn salesSource: Interviews with Vodafone executives and employees. Vodafone Annual Report. 2009 Annual Vodafone People Survey (82% response rate). Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 29
  30. 30. 2 Right Incentives and Rewards Incentivizing and Empowering Employees Provides incentives based on customer satisfaction, and empowers employees to think on their feet  Consistently pleases extremely discerning clientele (“guest who already have domestic help”)  Regularly receives international awards for its management and levels  Group’s hotels ranked monthly on the basis of of guest service customer service; year-end rankings determine the employees’ annual bonuses  Entrepreneurship built on  Employees are empowered to think on their feet and combination of incentives respond to customer needs and empowermentNote: Founded in 1963, operates 42 hotels, 10,000 rooms in 27 countries; USD 840 Mn sales.Source: Interviews with Mandarin Oriental executives and employees. Mandarin Oriental Annual Report. Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 30
  31. 31. 3 Employee Self-Direction The Theory Allowing employees to direct themselves – within reason - in the activities they perform Self-direction…. … gives employees a sense of trust, autonomy, and responsibility … fosters unconstrained, creative thinking … improves employee morale Examples  Autonomy over (some) time  Allocation to special projects  ...MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 31
  32. 32. 3 Employee Self-Direction 2o% time policy at Google Google’s 20% time policy provides employees with substantial flexibility, giving engineers 1 day a week to work on a project of their choice “20% Innovation Time” A video on Google  Engineers encouraged to take 20% of time to work on something company-related that they are passionate about – Engineers can try to convince others to join their project “Fifty percent of what Google launched in the second half of 2005 actually got built out of 20% time” http://www.youtube.com/watch?v=aOZhbOhEunY&feature=related - Marissa Mayer, VP of Search ProductsNote: Founded in 1998, processes over 1 Bn data requests per day; 25,000 employees globally; US 24 Bn salesSource: Google Website and Annual Report, * Marissa Mayer, Google VP of Search Products (speaking in June 2006) Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 32
  33. 33. 3 Employee Self-Direction Atlassian “FedEx Day” Challenge Encourages risk-taking and creative thinking through a special, regular competition “FedEx Day” Challenge  Special challenge run every quarter  Developers have 24 hrs to deliver a working software prototype  Ambitious projects are encouraged  Learnings are shared and discussed as a team Everyone presents; Atlassians vote their favorite “FedEx delivery” Real generation of Expands people skills Improves employee morale; new ideas and creativity breaks the “routine”Note: Atlassian is an Australian software company; 225 employees in Sydney, S. Francisco , Amsterdam; 20,000 customers in 134 countries; USD 59 Mn salesSource: Company Reports, Economic Times, Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 33
  34. 34. 3 Employee Self-Direction A Video on Atlassian A video on Atlassian (between min 5-7) http://www.youtube.com/watch?v=u6XAPnuFjJc&feature=channelMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 34
  35. 35. 4 Celebrating Failures The Theory Learning to accept failure - as an opportunity to learn - provides employees with the confidence to take the risks necessary to be successful entrepreneurs Fear of Failure Learning from Failures  Redefine failures as opportunities to learn  Share lessons learned with others  Encourage employees to take more risks Achieving this transition is difficult; one way to start is to identify one or two champions within the organization, that are willing to share their “failure” storiesMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 35
  36. 36. 4 Celebrating Failures Tata “Dare To Try” Award Tata has implemented a unique award designed to encourage risk-taking and reward failures DARE TO TRY AWARD To the most daring team which made a sincere and valiant attempt Winner honored by Chairman for a major innovation, but failed Ratan Tata, at a widely broadcast corporate function “The company has found the means to reward risk-takers and, to a large extent, extinguish the fear of failure” - Tata group publication Improves employee Unleashes creativity and confidence and risk taking desire to try new thingsNote: Tata is a multinational conglomerate; it comprises of 114 companies across 80 countries; operates in chemicals, steel, cars, IT; USD 67 Bn SalesSource: Company Interviews and Reports; Economic Times; Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 36
  37. 37. 4 Celebrating Failures BMW “Creative Error of the Month” Award From 1990 to 1993, BMW broke down traditional mindsets at the Regensburg, Germany factory by rewarding courageous, well-planned ideas that took risks but ultimately failed Frees employees from routines and rigid structures Promotes optimistic, risk friendly attitudes “Everyone is allowed to make mistakes, and to take calculated risks” Shifts from a climate of fear to a climate of trust “If an innovative project carries only an 80/20, 70/30 or even a 60/40 chance of succeeding, but you have thought it through carefully and are well prepared, then go ahead and try it.”Note: The Creative Error of the Month Award was originated by Gehard Bihl and executed for 3.5 years under his supervision until his departure from the company.During that period, 12 awards were handed out to employees within the factory based on the criteria that the failure was due not to simple error but a risky idea.Source: Bihl, G., Werteorientierte Personalarbeit. Strategie und Umsetzung in einem neuen Automobilwerk, Munchen, 1995, S. 130.MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 37
  38. 38. 5 Workspace Design The Theory Physical space matters Where would you do your best work? or “It’s easier to be productive, creative and happy at work in a colourful, organic, playful environment than in a grey, linear, boring one.” - Alexander Kjerulf, DesignerMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 38
  39. 39. 5 Workspace Design Key Design Principles and Benefits Redesigning the physical office workspace to be more adaptable and flexible can help encourage greater collaboration and creative thinking Design Considerations  Overall space: open, bright, easy to walk around  Cubicals/offices: glass walls; open offices  Social areas, break rooms: open, spacious, inviting;  Think-rooms: big white-boards, where employees can gather, share ideas, etc. Direct Benefits Additional Benefits  Cost to build out is often lower  Recruiting  Affords a sense of "transparency“  Retention  Fosters informal interaction  Brand Building  Efficiency** Recent sustainability studies suggest shared spaces are more efficient than people working remotelyMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 39
  40. 40. 5 Workspace Design An Illustration: Red Bull London Moving from floor to floor: a slideNote: Red Bull is an Austrian company that sells energy drinks. Its products are sold in 160 countries. It has 6,900 employees; USD 4.5 Bn SalesMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 40
  41. 41. 5 Workspace Design An Illustration: ANZ Head Office, MelbourneNote: ANZ is the fourth largest bank in Australia. It has presence in almost 30 countries. It has 40,000+ employees; USD 10 Bn SalesMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 41
  42. 42. 5 Workspace Design Impact on Entrepreneurship at Telenor Telenor relocated 6,000 employees from 40 separate locations into a new, innovative facility, significantly improving employee collaboration and knowledge sharing % of Employees who State New Flexible  Created the region’s most innovative & 100 Workspace had a Positive Impact on their… effective work environment, incorporating: 80 – Open and flexible workspace solutions 60 – New, flexible work patterns 40 – A new, uniform ITC platform across BUs within BU 20  Employees are allocated to one of 200 0 flexible workspace units Productivity Work Work Contentment Quality Work Creativity Communication & Collaboration Knowledge SharingNote: Founded in 1855, Norwegian mobile telecom operator; 195 million subscribers in Scandinavia, Europe and Asia; 34,000 employees; USD 17 Bn salesSource: Telenor website, SINTEF Building and Infrastructure study, Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 42
  43. 43. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 43
  44. 44. Exercise Two: Barriers and Enablers in Your Organizations Exercise Two: Barriers and Enablers in Your Org. Part 1: Table Discussion (30 min) Name: _____________  Write down 1-3 things you could try in Organization: _____________ your organization  Discuss amongst your table partners: Typical Barriers 5 Key Enablers – What barriers to entrepreneurship  Fear of Failure 1. Leadership from the Top are you facing in your organization?  Lack of senior support 2. Incentives and Rewards  Lack of Employee Interest 3. Employee Self-Direction – What might you try to overcome  Misalignment of Incentives 4. Celebrating Failures them, and why?  Lack of autonomy 5. Workspace Design  Lack of funding Part 2: Report-out and Q&A (30 min)  Etc. What are you going to try in your organization  A volunteer from each table will report tomorrow morning? Fill in at least 3 ideas the key insights from the conversation  Plenary discussion and Q&A as a group Idea 1: ___________________ Idea 2: ___________________ Idea 3: ___________________MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 44
  45. 45. Survey Findings Review Fear of failure, lack of incentives impede entrepreneurial behavior Lack of employee interest possibly driven by fear of failure and misaligned incentives provide the biggest barriers to entrepreneurship overall Q12: What are the most significant barriers of internal entrepreneurship at your firm? Fear of failure Lack of employee interest Misalignment of incentives Education Lack of autonomy Lack of senior support Corporate policies Lack of internal competition Lack of funding Physical office layoutSource: Monitor Survey on Entrepreneurial Environments in the Middle East. Executive Seminar, Jeddah, March 28.CAS-COD-Prez-Date-CTL Copyright © 2011 Monitor Company Group, L.P. — Confidential 45
  46. 46. Survey Findings Review How would respondents make firms more entrepreneurial? Q13: If you could change one or two things in your organization to make it more entrepreneurial, what would you do? “Share strategy company wide.” “Using a structural, rather than opportunistic, approach with time lines and sufficient resources.” “Solicit, encourage, and actively develop new or adjacent business ideas solicited from employees.” “Allow business unit heads the freedom to move within their budgets and hold them accountable to results only. No micromanagement.” “Incentivize risk taking (not recklessness).” “Accept failures and learn from mistakes.”Source: Monitor Survey on Entrepreneurial Environments in the Middle East. Executive Seminar, Jeddah, March 28.CAS-COD-Prez-Date-CTL Copyright © 2011 Monitor Company Group, L.P. — Confidential 46
  47. 47. Survey Findings Review What’s keeping change from happening? Q14: Why do you think your organization has not taken the direction you just recommended above? “Past success is leading the way.” “Too focused on achieving targets.” “Lack of trust in business unit heads.” “High turnover.” “Short-term focus.” “Too focused on continuing ‘business as usual’.” “Nothing. We’re working on this full speed …. Started reaping the rewards with notably higher innovation and risk taking since last year.”Source: Monitor Survey on Entrepreneurial Environments in the Middle East. Executive Seminar, Jeddah, March 28.CAS-COD-Prez-Date-CTL Copyright © 2011 Monitor Company Group, L.P. — Confidential 47
  48. 48. Agenda  Objectives for the Day and Introductions 8:30  Intro to Entrepreneurship: Why Entrepreneurship Matters 9:00 (interactive presentation) – Exercise one: Entrepreneurship as a Strategic Choice 9:30 – Report out and Plenary Discussion 10:00  Getting it Right: The Key Levers for Entrepreneurship 10:30 (interactive presentation) – Exercise two: Barrier and Enablers in your Organization 11:00 – Report out and Plenary Discussion 11:30  Closing Remarks 12:00MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 48
  49. 49. Recap of What We Learned 3 Types of Enablers of Entrepreneurial Organizations Successful companies build their entrepreneurial environments on three types of enablers: direction, architecture, and behavior DIRECTION  Making entrepreneurship an explicit strategic choice Entrepreneurial ARCHITECTURE BEHAVIOR Organizations  Targeted incentives  Collaboration and rewards and sharing of  Flexible, rotational ideas programs  Taking risks and  Open workspaces celebrating failuresMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 49
  50. 50. Recap of What We Learned 5 Levers – from Conventional to Bold - to Spur Entrepreneurship We have identified 5 common themes to create entrepreneurial environments Conventional 1 Leadership from the top ‫‏‬ (Direction) 2 Right Incentives and Rewards ‫‏‬ (Architecture) (Architecture / 3 Employee Self-Direction ‫‏‬ Behavior) 4 “Celebrating” Failures ‫‏‬ (Behavior) 5 Workspace Design ‫‏‬ (Architecture) BoldMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 50
  51. 51. Recap of What We Learned Strategic Importance of Entrepreneurship Entrepreneurship matters a lot to a few, and a little for everybody. Regardless of your company size, and your industry, entrepreneurship can drive significant advantage A lot for a few: truly disruptive business models (e.g. Amazon); high growth industries (e.g. internet, high tech) In the middle: transformative businesses in industries with some degree of competition and growth Entrepreneurship at the core of the business A little for everybody: marginally incremental business models; deeply competitive, low growth industries Even in the periphery, however, companies can derive great value from entrepreneurship – see 3MMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 51
  52. 52. Revisiting Your Positioning on the 2x2 Where do you feel are in this map now? What caused your assessment to change from the beginning of the case? And why? Critical How Important Is Entrepreneurship? Marginal Novice Expert How Good Are We at Entrepreneurship?MILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 52
  53. 53. Positioning of the Case Studies on the 2x2 Critical How Important Is Entrepreneurship? Marginal Novice Expert How Good Are We at Entrepreneurship?Source: Monitor AnalysisMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 53
  54. 54. Thank you. For More Information About this Topic Published: March 2011  Entrepreneurship has become a key strategic choice for many companies today, but building an entrepreneurial workplace as an established company is challenging  Growth at Work identifies the critical barriers to building an entrepreneurial environment, and explores 5 key levers managers can pull to overcome them Francesco Fazio, ffazio@monitor.com Joel Finlayson, jfinlayson@monitor.com Neil Pearse, npearse@monitor.comMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 54
  55. 55. Selection of Recent Articles from Monitor Group Building Entrepreneurial Inside the Mind of Customer Centricity Environments the CEO Imperative Creating an Open Innovation in Arab Promoting Entrepreneurship Innovation Agenda Family Businesses in the 21st Century Entrepreneurship in the Arab WorldMILE Executive Seminar on Corporate Entrepreneurship Copyright © 2011 Monitor Company Group, L.P. — Confidential 55
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