Tag Archives: Leadership

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What next for the sharing economy? – SMF President, David Falzani

While conventional markets and brands were under financial siege by the recession, the concurrent development of a global, data-driven, mobile infrastructure provided an answer to the strife: the sharing economy. Billed as a radical new, ‘alternative’ socio-economic system based on the values of ‘sharing’ and ‘collaboration’, the sharing economy seemed like a fluid, big-picture response – one which some commentators have described in utopian terms since.

Benita Matofska, of The People Who Share, defines the sharing economy as, “A socio-economic ecosystem built around the sharing of human, physical, and intellectual resources. It includes the shared creation, production, distribution, trade, and consumption of goods and services by different people and organisations.” It is, in other words, a new, ‘alternative’ market which “Embeds sharing and collaboration at its heart” – a ‘hybrid economy’ enabling different forms of value exchange using shared physical or human assets. Matofska points to the ‘gig economy’, social media, peer-to-peer (P2P) trade and exchange, upcycling and recycling, as examples of economic sharing in action.

At the core of the sharing economy is the principle of people renting things they need from each other, The Economist argues, “The big change is the availability of more data, which allows physical assets to be disaggregated and consumed as services.” Apps and data, therefore, act as conduits for people to get in touch with one another and share what they need within this economy. Technology has reduced transaction costs, making the sharing of assets cheaper and easier than ever – or so the story goes.

The Economist is right in noting the significant disruptive effects of the sharing economy, which seem only to be increasing as these P2P markets develop. The consumer peer-to-peer rental market alone is worth around $26 billion. However, in their bid to market the sharing economy as a collaborative, user-first way of delivering services and products, the major players that make the sharing economy possible, and by claiming to be merely middlemen for ‘independent contractors’, large corporations like AirBnB and Uber understate their own involvement and responsibility for the sustainable development of the sharing economy.

This has impacts not just on ‘conventional’ rental markets but gives way to a whole host of regulatory and workers’ rights issues. Bike couriers for Deliveroo, said to be paid a mere £4 per delivery, receive no hourly rate from the company. This has led to spontaneous strikes and collective action from their drivers, followed by an aggressive response by the corporation. The adverse effects of AirBnB on local rental markets is well-documented, particularly in small cities such as Reykjavík, Iceland, which, in the context of a massive tourism boom, has seen a huge increase in rents and property values as a result of the sharing economy and has reportedly led to a major housing shortage in the capital.

As we get swept up in the excitement of this new means of meeting demand, we are arguably losing sight of the important question that must be asked of the sharing economy: what is being shared, and for whose benefit? Uber and AirBnB may claim to be middlemen for ‘independent contractors’, but they take huge amounts of commission from their contractors and have even been described as, “Giant corporations pursuing monopoly power.” They have not just disrupted the markets and the profit margins of their competitors, but it could be said that their desertion of responsibility has, in some ways, led to the disruption of the lives of the people who work with them by escaping regulation and giving them only precarious ‘access’ to work, rather than solid, reliable jobs. As the sharing economy develops and brands consolidate their grip on markets, its once seemingly-liberatory potential seems to be surpassed by many of the problems facing the ‘old’ ways of doing things. As the casual workers that make the sharing economy possible become increasingly organised, the sharing economy must reckon with its responsibilities and duty of care to contractors and consumers. The regulatory battles they already face with cities such as New York and Los Angeles will set the stage for what’s to come in this regard.

This is not to say that the sharing economy requires more regulation. It is the lack of broad state regulation which has generated many of its advances and entrepreneurial development, after all. What the major players in the sharing economy must do is to put their money where their mouth is and open up their brands as well as their services. That means sharing not just some more of the wealth (revenue at AirBnB increased by 80% during 2016), but the infrastructure and technology that makes the sharing economy possible.

Some have argued this should take the form of open brand APIs. The sea change in the relationship between producers, marketer, and consumers has turned brands into ‘platforms’, ‘ecosystems’, and the collaborative nature of this relationship and the role of consumer participation makes the possibilities for scaling different aspects of the sharing economy endless. For the sharing economy to prosper and grow, it requires the active participation and input of the people doing the sharing. By making their processes and insights open-source in a genuinely transparent developmental dialogue, a true sharing economy might finally emerge. By placing the locus of organisational power in the hands of a few small, closed-off and increasingly powerful companies, the sharing economy risks lapsing into the same old patterns that made conventional corporate culture no longer able to compete or meet the demands of consumers as efficiently.

The battles around regulation and consumer and worker rights are not mere teething problems –they will determine the shape of what’s to come. The cooperative nature of the sharing economy comes from the technology, and it is the technology which must change to be more inclusive and open to innovation in order to meet the sharing economy’s increasingly unstable demands on local economies and workers.

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Would uSwitch your chief executive?

Would you switch your CEO2Tired of paying over-the-top rates for poor service, bad communication, and a total lack of market strategy? It might be time to switch—your chief executive, that is.

Today, thanks to ‘switching’ providers like uSwitch or comparethemarket, consumers have more power than ever when it comes to comparing and selecting utility or insurance providers. All it takes are a few clicks through these streamlined services to find, and switch to, a better deal.

If only such a service existed for selecting better chief executives. CEOs wield such a large amount of responsibility that a bad CEO could damage, if not devastate, your company in every conceivable way – even permanently, as the recent case of Phillip Green and BHS attests.

By looking at common shortcomings CEOs often face and ‘comparing the market’, so to speak, this article will hopefully outline some of the areas in which chief executives can improve.

A self-critical approach
As Ben Horowitz points out, there’s no one else to blame when you’re CEO – chief executives are ultimately responsible for every major decision within the organisation. The blame for a bad hire or a failed initiative will ultimately find its way back to chief executives as they are the ones who OK such decisions.

For this reason, better CEOs need to take a generally more self-critical approach to their position and their relationship with the company. Firstly, this should manifest in an ability to recognise one’s own weaknesses. If a chief executive is unwilling to admit that they can sometimes lack communication skills, or that their excess of ego is having a negative effect on the company, then this demonstrates stubbornness. If you ask a prospective new CEO what their greatest weakness is and their answer does not pertain to an actual weakness (e.g. “I am too detail-oriented” or “I am too friendly”), it can be a red flag for someone who has not faced up to their own limitations and is not focused on self-improvement.

This can become fatal to a company in times of strife, and this vital self-critical approach must be evident in a chief executive’s actions. If, for example, the organisation is feeling the financial squeeze and the CEO is still accepting large bonuses at the company’s expense, then this demonstrates a lack of critical reflection and a detachment from their responsibility to employees and stakeholders.

Goal-oriented strategic thinking
Companies inevitably run into a myriad of obstacles over their lifespan, and as both a figurehead and leader in practice, it is down to the chief executive to ensure the organisation weathers the storm.

No matter what industry you’re involved in, there will doubtless come a time when your company will be presented with a near-fatal obstacle or challenge. Getting bogged down in the details of these obstacles or allowing them to dominate you psychologically can make you lose sight of the path ahead. This calls for strategic, long-term thinking, rather than short-termism.

Chief executives need to be conscious of the many shifting trends in their industry and conduct a risk assessment of how these might change the landscape in which the organisation is operating in the future. This means understanding the historically unique consumer trends and new technologies emerging as potential opportunities with a place in long-term strategy, but it also requires an ability and willingness to determine which of these trends will have a contingent impact on the company’s vision and which of them are simply short-term fads. Put simply, good chief executives need to have a clear head, balancing risk against short-term challenges in order to retain a clear long-term vision and strategy for the company. Those who are susceptible to getting sucked in by the minutiae of short-term issues simply don’t cut the mustard.

Social responsibility
Does your CEO actively involve themselves in the community of the company, or are they rather more aloof? Do they skip staff parties, charity fundraisers, and local business gatherings? It could be a sign that they feel little affinity with their colleagues or immediate business community, and therefore lack a sense of social responsibility.

“People of my generation of leadership have fundamentally failed, in that corporate private sector has not delivered its contribution to society over the last 10 years,” argues Ronan Dunne, O2’s chief executive. Generating revenue for shareholders and stakeholders alike is obviously a priority for most businesses, but it’s important to remember that business people are part of a social contract with wider society. After all, it’s the community of consumers, producers, and other businesses that every successful organisation owes their success to.

CEOs need to take active, intentional action to not only exhibit but cement the company’s social responsibilities. Ask: how does their sense of social responsibility manifest? Boondoggle initiatives won’t cut it—they need to produce concrete results. O2’s Think Big scheme is a great example of a company getting social responsibility right, offering grants of up to £10,000 to young innovators looking to provide new and creative solutions to environmental problems. Does your CEO put their money where their mouth is? If not, it might be time for a switch!

Blogs & News, Initiatives

Can unicorn startups thrive whilst ignoring regulation?

a worker asks for a transition to a patch on a piggy bank, but receives only a tease

The world of tech startups is peppered with stories of overconfident, brilliant entrepreneurs who disrupt the way business is done in traditional sectors, transforming consumer behaviour and challenging current legislative frameworks, often with detrimental outcomes to their business as in the landmark Uber employment rights case.

High profile tech innovators are sometimes branded arrogant “jerks” who try to by-pass national regulations in order to achieve success. But is the fair? Is arrogance a prerequisite to achieving a major shift in consumer economic behaviour? The new Sainsbury Management Fellows Business Survey asked business leaders/entrepreneurs for their views on the behaviour of Unicorns (billion dollar valued start-ups), with some divergent views.

Arrogant or just determined? Divided opinion
Sixty-seven of the 150 opted-in panellists took part in the survey and 37.5% agreed that Unicorns in the sharing economy are arrogant in their compliance with regulation and interestingly, over 51% of all respondents said that a degree of arrogance is actually required for new technology startups in traditional markets to beat incumbents and grow.

Arrogance of Start ups Survey Question `1

Echoing similar views among the 51% of respondents, David Bell, an engineering graduate on Rolls-Royce’s development programme said, “In order to gain advantage in the sharing economy Unicorn startups had to exploit loopholes and gaps in existing rules to rapidly develop market share before regulators can act to prevent these unforeseen practices. While no specific company was put in the spotlight, Bell said that some of the tactics include ignoring regulator warnings, claiming new technology’s exemption from old rules, asking customers to lobby on their behalf, and asking for forgiveness and paying penalties after their market position has already been established.”

Arrogance of Start ups Survey Question 2

On the flip side, just over 42% of all panellists stated that arrogance is not a prerequisite for success and startups are misunderstood and the public should not “confuse arrogance with self-confidence.” In this group’s view, such startups are simply pushing boundaries, testing new models and finding new ways of competing with incumbents.”

No place for arrogance in business
Successful serial entrepreneur Chris Martin, CEO of ADC Therapeutics SA said, “There is no room for arrogance in business – startup or not. Some Unicorns I have worked with were best in class and so may have been perceived as arrogant when they were just very, very good.”

Sinead O’Sullivan, an MBA candidate at Harvard, an aerospace engineer and entrepreneur stated that it is vital that not all startups are painted “with the ‘arrogance’ brush.” Some tech startups are being led by millennials who can appear overconfident.”

While some startups can be arrogant, most aren’t. Some simply operate with supreme “self-confidence and dogged single-mindedness,” said Phil Strong, CEO at Zymbit.

The role of arrogance in business
Asked to name a company that behaves arrogantly, unprompted 18% of respondents named seven companies, with Uber taking pole position. The others were Prowler, Theranos, Avery Dennison, Airbnb, Tesla, and Dyson.

Led by CEO Travis Kalanick, Uber develops markets and operates the mobile app which provides on-demand taxi service, connecting passengers to cab drivers at much lower costs than other services. While many deem Kalanick to be a brilliant entrepreneur and legendary CEO, he is also generally perceived to operate in an arrogant way. While this arrogance is seen by some as negative, the trait is said to be rampant in Silicon Valley, with investors rewarding supposedly callous tactics with tons of capital. The view of the Uber leadership is that it consistently acts as if the company is above the law and the ethical norm.

Sinead O’Sullivan reinforced this point saying, “While misplaced confidence can be damaging to the reputation of a company, this behaviour is encouraged by “the way the whole venture capital game works.”

Demonstrating polarity of views, one entrepreneur, Nimesh Thakrar, CEO of Banneya gave Uber kudos for changing “the status quo of how we are currently operating in that [taxi] space”, and that policies and regulations “need to change and be reflective of the modern world we live in.” However, another young entrepreneur Farid Singh argued that the way Uber has gone about doing things has become “similar to dumping free inventory” and that while “regular taxi services run out of cash and have to shut down, they [Uber] start squeezing the drivers and raising their prices”. He believes that these practices have created an “unchecked monopoly”.

Airbnb, the world’s fourth largest startup is criticised for its supposed arrogance by the American Hotel and Lodging Association (AHLA). The AHLA launched several campaigns to counter Airbnb’s so-called hypocrisy and to fight for “the need to curb illegal hotels and ensure a level playing field”. As one panellist stated, startups are not always good just because they’re new, claiming that “Airbnb has damaged B&B markets.”

In the final analysis…
While some of the SMF panellists deemed Unicorn startups as arrogant, others see this arrogance as merely a change in the way business and business owners are pacing themselves. Startup owners and operators are seen as bold movers and shakers who “challenge incumbents” and are in the business of “exploring new ways of solving old problems” said one panellist. The leaders of Unicorn startups are seen as new types of entrepreneurs who emphasise the need “to strive for survival and reproduction.”

Some respondents felt that the term “arrogance” is “emotionally charged” and has “strong negative overtones” and that society should be acknowledging their achievements; focusing on how these companies are pushing boundaries, testing new models, creating change and improving services for consumers.

Sainsbury Management Fellow and venture capitalist, James Raby argued that subverting regulation can be catastrophic for long term success. “Some startups regard regulation as the enemy. Because entrepreneurs are bringing new technology to the market, they think it is a protective shield from regulation. The standard response is to disavow regulation, yet everything that’s old is not necessarily bad. Startups should embrace regulation if they are serious about long-term success. They need to recognise that to work in real markets they must cooperate in a regulated market, as I’m sure the manufacturers of driverless cars will realise.

This means startups need to employ people who understand regulatory frameworks and the detail of how they apply in different markets and cultures. Without this depth of understanding, companies side-stepping regulation will be challenged and regulation will catch up with them.”

As SMF implores startups to re-think their approach to regulation, perhaps there is also a need for the regulators to improve their understanding of technology and be quicker at managing technology shifts.

photo (c) nuvolanevicata

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Leading in a Crisis Part 2: Taking Action – David Falzani, SMF President

Image for Crisis Blog part 2 iStock_000023007074_Medium

If a crisis hits your company, clear thinking and decisive leadership is essential take your team through the ensuing storm.

As you’ll have read in our previous blog post on this topic, preparation is vital to ensuring that your organisation can deal with a crisis effectively. With a thorough risk assessment and management strategy in place, you’ll already have a good idea of how a crisis would impact your operations, and a plan deal with the issues. So, when that crisis hits, what’s next?

Face the music
When crisis hits, your first instinct might be to cover your own back. Self-preservation is a natural reaction in circumstances like these, but unfortunately, that’s not going to get you nor your organisation out of the woods. Before anything else, you may need to swallow some hard truths.

These might include your own role in the crisis – if you’re leading your company, then you no doubt exert a large influence on how the crisis affects your organisation and any solutions to it. You should consider yourself as one of the first figures who needs to make sacrifices if any tough choices need to be made.

After that, it’s important to develop a consensus on the causes of the crisis. This is vital, as no long-term solutions can really be implemented unless you know what the underlying problems really are.

Transparency is vital here. Quick fixes and concealment are not a way out, and will only exacerbate the crisis and make things worse.

All hands on deck
As we previously discussed, any risk management strategies should be communicated transparently and openly with your organisation’s stakeholders; and ultimately to the public as the media will inevitably report on the crisis.

Crisis can create a lot of uncertainty and fear among stakeholders, but particularly employees who will be worrying about their job security. If you didn’t involve them in risk management before the crisis hit, as is the ideal, now is the time to do exactly that.

First of all, your employees need certain reassurances. If redundancies have been deemed necessary because of the situation (for example, if an economic crisis requires cost-saving measures to be made), then this needs to be a part of your crisis consultations with the
other members of your organisation. The potential impacts of any planned changes must be outlined in full – in particular, if redundancies will be necessary or if there is any possibilities for employee redeployment.

As a crisis will affect your whole organisation, it is vital that you involve the whole organisation in the dialogue aimed at resolving it. Consultations should take place with employees and, if present, unions. Giving employees clarity and reassurances about the
situation will make your organisation more likely to weather the storm. There’s been more than one company that’s hit a survivable crisis but found it lost a key portion of its top talent, perhaps those who find it easiest to get a new job, through a lack of clear consultation.

Furthermore, as crises often call for new, creative ways of thinking and problem-solving, a
company-wide dialogue could potentially produce new solutions and answers at an uncertain time. These cannot be implemented without the help of staff.

Fight your way out
Think of a crisis not just as a disaster, but an opportunity for change. A crisis might actually empower you to make important changes to the company – changes that may have stalled in the past, but can now be implemented in the name of crisis management.

Indeed, many companies saw the 2008 financial crash as a business opportunity. Take Dan Simon’s piece in Forbes, How to turn a financial crisis into a business opportunity: “During this turbulent period we managed to grow the company into a major player in financial PR and open successful offices in New York, Los Angeles, Singapore and Sydney.”

Calmer Waters
Keeping a level head and turning the tables to your advantage can help the organisation emerge from the crisis not only intact, but more successful and efficient than before.

Click to read part 1 of Leading in a Crisis.

 

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Are Leaders Born or Bred?

Are Leaders Born or Bred Fish Stock_000015329479Large

Whether leaders are born or made is a question that has fascinated political, economic and business minds for centuries. Traditionally, leaders were considered to be born possessing the innate skills necessary to successfully lead others.

Since then, our mode of thinking has come a long way. It’s important to remember that leadership is not always formally hierarchical, and leaders often emerge even if they do not have the title of manager or director – a leader may be someone taking the helm on a project with colleagues.  Leadership involves a certain level of innate ability, such as vision, charisma and interpersonal skills, but it also involves hard work to acquire the technical skills and knowledge needed to succeed within any given industry.

You only have to look at the business world to see that the best leaders successfully maintain this fine balance. We all know the radical success stories – self-made leaders of industry such as James Dyson and Richard Branson who started from nothing and built successful empires through a combination of their innate skills set, vision and hard work. But there is a vast number of largely untold stories of successful business leaders who have come to dominate in their chosen fields by using their combined technical and interpersonal skills to lead teams that excel.

Interpersonal skills
The power of interpersonal skills cannot be understated.  Take the example of Steve Carell’s Michael Scott character in The Office. Scott is said to have received many awards during his time as a salesman, and it is made clear throughout the series that he is a very skilled salesman with in-depth knowledge of the market he is working within. But in his role as manager he is utterly inept, committing all sorts of social faux pas and constantly alienating his staff.  Despite all his skill as a salesman, he lacks interpersonal skills; he is a poor leader.

What we can learn from this is that no amount of business acumen and textbook management theory is ever going to be useful if you cannot develop strong interpersonal skills and adapt your management style to get the best out of individual members of the team.  Remember that in management, getting to grips with the financial side of the business is only a small aspect of your job as a leader. It is people you are managing, not products.

You need to earn respect, which means being a good listener, and letting your employees know that they are being heard whilst also giving them all the information they need to do a good job.  You need to inspire your team and build strong, professional relationships without condescension or over familiarity.  You need not only to get your objectives and requirements across to your colleagues, but also have them accepted as legitimate.  This involves forming and sharing a coherent vision of where you want the business to be in the future – something that can only be achieved with mutual respect and genuine collaboration.

Learn from Others
Strong interpersonal skills can be developed in part by paying close attention to what you and others observe about other leaders. You can learn from others, good and bad, from studying other employees and leaders.

This does not mean merely copying all of the ideas, behaviours and attitudes of other leaders.  It means to critically observe what it is that makes them good at what they do, cherry-picking the best ideas and putting them into practice in a way that is unique to you. One way leaders have traditionally gone about developing is through mentoring [link to mentoring infographic], which provides invaluable lessons and insights from senior people who are leading successful businesses.

There are also thousands of books on leadership, ranging from Sun Tzu’s The Art of War to Kouzes et al’s The Truth about Leadership. It’s worth reading widely: don’t just restrict yourself to the business section of the bookstore.  Books alone of course, can not provide you everything you need, but by mixing different sources of learning, your leadership skills and knowledge will grow.

Awareness
Ultimately, your ability to learn leadership skills boils down to your level of self-awareness. You need to have a clear, objective idea of how you are perceived based on the attitudes and responses of your colleagues and staff.  This not only involves listening, but also explicitly asking for feedback from those around you and taking a step back from your own involvement in something to see your place in the bigger picture.  If you know the business and learn the social skills of a leader for yourself, you may be on your way to developing yourself into a great leader.

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Royal Academy of Engineering & SMF – Engineering Business Leaders

Group shot with DF - 0197

Speaking at a networking reception hosted by the Royal Academy of Engineering for Sainsbury Management Fellows, President, David Falzani (second from left), said:”I‘d like to thank the Royal Academy, not least for hosting this event today, but also for its continued and essential support of the Sainsbury Management Fellows scheme, including the promotion of the bursary and the selection process for choosing new SMFs.

We in turn have also continued our activities in supporting the Royal Academy: as selectors and then mentors for the Engineering Leadership Awards, in supporting the ELA annual events, and the Executive Engineers event.

At our Annual Dinner last May I asked why is it so important to have engineers and scientists gaining top MBAs and business qualifications?

I’d like to take this opportunity to repeat my answer, that the business world has shifted. The third great revolution of modern man, the information revolution, has transformed every aspect of life and business.

What counts for business success today is not who you know, nor even what you know, but today the maxim for success would perhaps be, how quickly can you learn. Today, all companies are technology companies in some respect, and all information is instantly out of date.

What’s crucially important is the ability to harness this flux of technology and information in the business context in order to maximise chances of success.

Within this interface of technology and money no one can be more at home than the engineer with a deep business understanding. This idea lies at the heart of the SMF Scheme.

The SMF scheme was created almost 30 years ago to get more senior executives with engineering qualifications at the top of organisations. Today, the scheme has 300 Fellows, each with a first class engineering background, and an MBA from a top international business school.

Many fellows are helping further develop some of the UK’s largest corporations, whilst many others have gone on to create high growth technology companies worth over £500m.

As an organisation, and a group of like-minded individuals, we remain keen to continue to support the Royal Academy, and perhaps become involved with emerging initiatives such as its Enterprise Hub and other areas of mutual value.

Finally, I would like to ask our Fellows here this evening to consider how they can become involved in current and future activities of the scheme, and also with our fund raising activities. We remain keen to add a few more volunteers to our fundraising campaign team.

In closing, I hope this evening proves to be a success, and an example of working in a closer partnership with the Royal Academy.

“I‘d like to thank the Royal Academy, not least for hosting this event today, but also for its continued and essential support of the Sainsbury Management Fellows scheme, including the promotion of the bursary and the selection process for choosing new SMFs.

“We in turn have also continued our activities in supporting the Royal Academy: as selectors and then mentors for the Engineering Leadership Awards, in supporting the ELA annual events, and the Executive Engineers event.

“At our Annual Dinner last May I asked why is it so important to have engineers and scientists gaining top MBAs and business qualifications?

“I’d like to take this opportunity to repeat my answer, that the business world has shifted. The third great revolution of modern man, the information revolution, has transformed every aspect of life and business.

“What counts for business success today is not who you know, nor even what you know, but today the maxim for success would perhaps be, how quickly can you learn. Today, all companies are technology companies in some respect, and all information is instantly out of date.

“What’s crucially important is the ability to harness this flux of technology and information in the business context in order to maximise chances of success.

“Within this interface of technology and money no one can be more at home than the engineer with a deep business understanding. This idea lies at the heart of the SMF Scheme.

“The SMF scheme was created almost 30 years ago to get more senior executives with engineering qualifications at the top of organisations. Today, the scheme has 300 Fellows, each with a first class engineering background, and an MBA from a top international business school.

“Many fellows are helping further develop some of the UK’s largest corporations, whilst many others have gone on to create high growth technology companies worth over £500m.

“As an organisation, and a group of like-minded individuals, we remain keen to continue to support the Royal Academy, and perhaps become involved with emerging initiatives such as its Enterprise Hub and other areas of mutual value. Finally, I would like to ask our Fellows here this evening to consider how they can become involved in current and future activities of the scheme, and also with our fund raising activities. We remain keen to add a few more volunteers to our fundraising campaign team.

“In closing, I hope this evening proves to be a success, and an example of working in a closer partnership with the Royal Academy.”

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Intrapreneurship and Smarter Impact

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SMF Phil Westcott

Inspired by recent entrepreneurial articles from the hugely impressive SMF community, I thought I’d chip in with a story of my own.  I consider the courageousness of the classic entrepreneurs in some awe… but as a man of less iron resolve, I prefer my entrepreneurship from the vantage point of a large corporate, in my case IBM.

So my story is one of “Intrapreneurship”… applying entrepreneurial skills to pursue new opportunities for your company and in doing so, create new exciting career opportunities for yourself.  If your career ambition is driven by a desire for personal impact on society at large, then leveraging corporate scale might be as effective as going it alone.

In summer 2011, I joined IBM in the midst of it centenary year, celebrating its role in technology leadership from the personal computer to the moon landing.  And as I looked at the vast portfolio of solutions, I bought into the IBM Smarter Planet vision, aligning good business by tackling global and societal problems.

However, there seemed a gap in the solution set.  It appeared that our planets greatest challenge of our time – the challenge of global inequality – was not being directly addressed by an IBM business unit or solution set.  And this is hardly surprising. Despite the popular support for Prahalad’s Fortune at the Bottom of the Pyramid, few companies have found business models that effectively serve this market at scale.

So coming into IBM fresh from my Sainsbury Management Fellows-sponsored MBA, and full of the naïve optimism of a newbie, I set about finding the business models that might harness the collective power of such a great institution – 430,000 employees, and $6bn a year in R&D – to address this challenge: and not by way of philanthropy or traditional CSR; but with the conviction with which business pursues attractive growth opportunities.

And so outside my day job as a strategy consultant, I launched IBM Smarter Impact. Through a certain amount of belligerence and networking, the concept has evolved over the past year and a half into a global initiative with global resources. So I’d like to use this blog to air some thoughts on intrapreneurship before concluding with a brief word on where the Smarter Impact journey has led…

Encouraging intrapreneurship in large organisations…
Large corporations typically require a disciplined structure of business unit, product and industry alignment, a discipline that enables predictable business performance on a quarterly basis.  My view is that there is a temptation to leave innovation to the R&D department, however successful a company might be at churning out patents.

However, many game-changing business innovations originate from employees who spot a business opportunity that cuts across traditional organisational silos.   For a systematic solution, companies must encourage the behaviours that are required to drive these ideas in their early gestation.  This requires the right recruitment, incentive and promotion policies, so that the middle and senior leadership are populated with leaders who at least recognise, if not exhibit, true entrepreneurial behaviours.  The organisation must then have the platforms to accept or reject the new ideas once they have reached a period of maturity.

  • Recruit the right blend of employee, and look out for those with an entrepreneurial spark
  • Ensure there is an entrepreneurial element within formal training programs
  • Use the formal mentoring structure to encourage pursuit of ideas in their early stages
  • Allow employees some leeway to work on their pet projects on the side of the day jobs, and recognise these activities in their remuneration review
  • Find a platform for sponsorship of new business opportunities.
  • But not too early in the life of the idea, perhaps once a first sale has been achieved or the model proven as commercially viable This ensures that the employee has the tenacity to stick with their idea, and the conviction to see it through

What makes a good intrapreneur?
Like the entrepreneur, the intrepreneur has the benefit of being able to create and lead new ventures at any stage of their career and not just once a senior position has been attained. Also like the entrepreneur, they work with limited resources – even including their own time.  Therefore similar skills are required to improvise, acquire resources and build momentum.

But there are additional skills required by the intrapreneur. At a recent meeting with a large UK city council, it was proposed that there are three types of city leaders: Political leaders, Thought-leaders and Managerial leaders. The rational was that an effective city leader will be one of the three.  Which got me thinking about intrapreneurs… It seems to me that the most effective intrapreneurs need to be pretty good at all three.  In the context of driving change and innovation in a large company, this means:

Political leadership – managing up, don’t always ask for permission, ask for advice to unlock resources and help. Identify some senior sponsors, and in doing so, choose the most appropriate ‘home’ within the organisation.  For example, the momentum behind Smarter Impact has benefited greatly from positioning as a surrogate of IBM’s Smarter Cities business.

Thought-leadership – taking ownership of the idea, find other global thought-leaders through blogs and networks, participate in the debate and help move the conversation on.

Managerial leadership – an ability to manage sideways and downwards to galvanise support and herd existing disparate efforts/initiatives into a critical mass of success stories. An ability to secure additional resources on limited budgets: for example, leveraging university relations as a source of bandwidth and innovation*.

Take my IBM colleague Rick Robinson, a global thought-leader on smarter cities.  Rick may be famous for his thought and technical leadership around data solutions for cities, but he also displays the other traits of a highly effective intrapreneur.

(*As a side note, Universities are always looking for interesting commercial, explorative projects, but having witnessed from both sides, too often these are badly conceived, poorly supported and then stray off the desired outcome. The academic teams need leading and motivating and then the output can be fantastic. For example check out this video delivered by LSE for Smarter Impact and the city of Rio de Janeiro after just 3 weeks of work.)

So where is Smarter Impact today?
Smarter Impact was publicly launched at a London conference in September 2012, an event I actually missed as it coincided with the birth of my first child!

This event engaged participants from across private, public and third sector, and really moved on the discussion.  Smarter Impact has now crystallized into a mechanism for new partnerships between private, public and third sector to drive inclusive economic development.  It has evolved a suite of data-driven solutions, which capitalise on exciting new sources of data and connectivity, such as the proliferation of mobile data and crowd sourcing.  While originally pitched at the international development sector, the principles are now being applied to drive social inclusion agendas in our UK city partnerships.  Crucially for its future in IBM, Smarter Impact is now bringing in revenue and opening up new lines of dialogue between global leaders from the World Economic Forum to Sunderland City Council.

Phil is Business Development Executive for IBM’s Smarter Cities business in SE Asia, and global leader of IBM Smarter Impact. For more information contact Phil (phil.westcott@uk.ibm.com).

Blog

Can We Help You Prepare for the Top Job?

Patrick Macdonald
SMF Patrick Macdonald, Partner, School for CEOs

There has never been a greater need to prepare businessmen and women to become CEOs. The biggest recession in 80 years, intense media scrutiny and investor nervousness all combine to make the top job tougher than ever.

When I was CEO of John Menzies – a £1.5bn quoted plc with a substantial family shareholding – it struck me that, as in any position, CEOs get better as they learn. I certainly did. But the old dictum “leaders are born and not made” still holds sway in many quarters. We still expect CEOs to take on the toughest job in business without any specific preparation.

This seems a little strange!

So I’ve teamed up with David Sole, the well known international rugby captain and business coach, to launch the School for CEOs. David has coached main Board directors and senior executives from a wide variety of functions including finance, human resources, sales and marketing, IT, property, legal and company secretariat.

Experienced businessmen and women will teach the next generation of business leaders using a carefully structured curriculum. A highly accomplished Advisory Board will work with us, including Sir David Reid (Chairman of Intertek plc and ex-Chairman of Tesco plc), Jonathan Warburton (Chairman of Warburtons) and Alex Wilson (ex-Group HR Director at BT plc).

  • The two-day Vital Few residential programme will cover the complexities of
    managing up – forming a relationship with the Chairman and Board
    managing down – leading the team
    managing out – handling investors and the media and
    managing in – staying centred and grounded

Future leaders will explore what really happens in the boardroom, rather than academic theories and frameworks. There will be follow on coaching to help embed the learnings, insight and wisdom gained on the programme. And delegates will join a fantastic network which will grow as the School grows.

The Vital Few is a standalone programme. It also forms the first module of the comprehensive Alchemy of Leadership programme which lasts eight days spread over several months.

The first programme takes place in London on 19/20 September. It’s aimed at anyone three years or less from becoming a CEO, as well as those already in the job. For future programme dates, visit www.schoolforceos.com