This presentation is based on a paper written by Gary Hamel

1. Calvert Edwards &Yvonne Chen
Nov. 27th, 2014

2. Agenda
If your company is going to grab
more than its fair share of new
wealth, it has to learn how to bring
the energy and ethos of theValley
inside.
You can bring the SiliconValley
inside and capture the vast
economic benefits that flow from
unfettered imagination and
unbridled ambition.
Big Stakes
SiliconValley in Shell
The Market for Ideas
The Market for Capital
The Market forTalent
The Innovation Frontier
Allocation to Attraction

4. BigStakes
How to free the
entrepreneurial spirit inside
your company?
• Set up and sustain dynamic
internal markets for ideas,
capital, and talent. Eg.
Shell, Monsanto,Virgin, GE
Capital
In theValley
• Ideas, capital, and talent
are allowed to circulate
freely.
• No bureaucratic controls
that paralyze creativity in
traditional business

6. SiliconValleyinRoyalDutch/Shell
GameChanger
• A panel of free thinking
employees to allocate $20
million
• Design an “Innovation Lab” to
help employees develop ideas.
• Design a five day “Action Lab”
to teach the team to create
credible venture plans
• Present to the GameChanger
panel, senior managers
Innovation lab
• How to identify and
challenge industry
conventions
• How to anticipate and
exploit discontinuities
• How to leverage Shell’s
competencies and assets in
novel ways

8. FromAllocationtoAttraction
Resource allocation is about
managing the downside.
• Big companies are not
markets, they’re hierarchies.
Decides where the money
goes
• senior vice presidents,
executive vice president,
distant CEO or Chairman
Resource attraction is about
creating the upside.
• At SiliconValley’s core are
three interconnected
markets: a market for ideas,
a market for capital, and a
market for talent.
• If an idea has merit, it will
attract resources in the
form of venture capital and
talent.

10. TheMarketforIdeas
In SiliconValley -
• Everyone understands that
innovation is the only way
to create new wealth.
• New wealth is created by
new ideas. New ideas tend
to come from new voices.
• Shell’s GameChanger
In large Companies –
• Marketplace for ideas is a
monopsony (one buyer).
• One place to pitch your
idea-up the chain of
command.
• Prejudice about who is or is
not capable of inventing an
new business model.

12. TheMarketforCapital
• The market for capital in
SiliconValley isn’t anything
like that of large
companies –access.
• The goal of bringing Silicon
valley inside is not only to
create new business but
also reinvent existing
business models.
• Creative new business ideas
seldom make it through
traditional financial screens.
• If estimates of market size
and market growth seem
the tiniest bit fuzzy, the
proposal gets canned.

14. TheMarketforTalent
• Employees have to believe
that the best way to win big
is to be part of building
something new.
• If you have highly creative
and ambitious people who
feel trapped in moribund
businesses, they are going
to leave.
• 20% of Harvard MBAs join
companies with fewer than
100 people
• 20% of Stanford MBAs join
companies with fewer than
50 people.

16. TheInnovationFrontier
• Resource allocation and
resource attraction are
competing innovation
regimes.
• When is comes to
innovation, large
companies have the
advantage.
• SiliconValley exists not
because large companies
are incapable of innovation
but because they have been
unwilling to abandon the
tightly knit safety net of
resource allocation.

17. Bringing SiliconValley Inside
From the September 1999 Issue
An influential business thinker, Gary Hamel is cofounder of Strategos and
director of the Management Lab. He latest book is The Future of
Management.