All posts by Jordan Early

What Really Happened At The Tesco Shareholders Meeting

‘The Rolls Royce of grocery retail has become Ryanair… The difference is people still want to fly with Ryanair.’

What happened at the Tesco Shareholder meeting

As I reported here last week, UK supermarket chain Tesco, held its first shareholder meeting since the supplier rebate accounting scandal and subsequent profit drop, last Friday. Despite reporting better than expected share values, the mood in the room was certainly not a jovial one.

Shareholder concerns focused primarily on executive pay. Of particular interest were the huge sums made out to former bosses that many hold responsible for both the financial and moral demise of the firm.

Rewarding Failure

It was pointed out that Philip Clarke, the Supermarket’s former CEO, was given a £1.2 million early termination fee and will access a pension of nearly £14 million (or £658,000 a year), from a firm that is clearly in worse shape than it was when he joined it.

Clarke was at the helm during a meteoric fall from grace that culminated in Tesco reporting a £6.4B loss in April of this year. As well as plummeting profits, the firm became embroiled in a fraudulent accounting scandal around the way the firm booked £263m in supplier rebates on Clarke’s watch. The latter has resulted in an investigation by the Serious Fraud Office.

Criticism was not reserved for former executives

The firm’s new boss, Dave Lewis, also came under fire as 18 per cent of shareholders failed to back a remuneration report that showed Lewis had received £4.13M for his first six months in the new role.

While both men are contractually entitled to funds they have (and will continue to receive), the sentiment of the crowd certainly echoed a discomfort with the corporate greed that is attached to executive level salaries.

Shareholders directly juxtaposed these executive salaries to those earned by in-store staff members, which have been described as being below the ‘living wage’. One particularly stinging shareholder comment summed up this sentiment:

“We do not pay the living wage but we do make our executives millionaires for failure.”

Other shareholder quotes made on the day included:

“When we bought Tesco shares it was the Rolls-Royce of grocery retail but last year it became the Ryanair of grocery retail. The difference is that people want to fly with Ryanair.” 

“Our country can no longer accept the greed of executives.”

The challenge ahead for Lewis and his leadership seems a daunting one. The eyes of his shareholders, and indeed the media, will be fixed on the firm’s performance in the coming months. The leadership team must not only turn around poor profit figures, but also navigate a sea of litigation that will be attached to the firms handling of the supplier rebate scandal.

At the shareholders meeting, Lewis stipulated that “We are managing the business in the right way and, at a fundamental level, the business is stepping in the right direction.” The recent share price improvements and company performances appear to be positive, but there is a long road ahead for the new boss.

Intrigue, money laundering and arrests at the Alhambra

World’s collide as procurement fraud comes to my hometown of Granada.

Alhambra_-_Patio_de_los_Leones_in_the_morning_sun_-_July_2011

This morning, the Director of the Alhambra, an ancient Moorish palace that is now Spain’s most visited tourist attraction, along with some senior staff members were arrested and accused of money laundering.

The allegations centre on the dubious circumstances surrounding the award of a contract to service the Palace’s audio guides.

In 2007 the Alhambra held a tender for the provision of audio guide services, the contract was awarded and then renewed in 2011. The issues that have arisen are related to discrepancies between the bid that was submitted by the winning supplier Stendal and the actual contract terms.

Stendal’s 2007 bid stipulated that the company would contribute an annual fee of 77,000 Euros as well as 47 per cent of the revenues it raised to the Alhambra for the privilege of supplying the guides.

However, the final contract stipulates that Stendal would only contribute 30,000 Euros a year and 15 per cent of its revenues back to the Alhambra. Clearly the terms used to win the business were not implemented in the contractual agreement and this has raised concerns of bribery and kickbacks with the Spanish authorities.

While the flat fee of either 70,000 or 30,000 Euros does not seem a vast sum of money. When you consider that the Alhambra receives 2.4 million visitors a year and each audio guide rents for 4 Euros, you start to see there is serious money in the revenue sharing side of the agreement.

After facing questioning at Granada’s police headquarters, those arrested were released with charges and will face further hearings in the coming days.

If you can read Spanish or know how to work Google Translate, you can read more here.

We need data to combat slavery in supply chains

Thai fishing scandal

International news agency Reuters has announced that recent investigations into the Thai fishing industry suggest that fish caught by boats utilising slave labour could be finding their way into the global retail supply chain.

It is alleged that operators in the Thai fishing industry (the world’s third largest seafood exporter) are staffing boats with migrant workers under appalling conditions that have been likened to slavery.

There are concerns that due to a lack of transparent supply chain data, global retailers and fish buyers are not able to track if the fish they are buying were caught on these suspect vessels.

Lisa Rende Taylor, director of Project Issara, a program run by Anti-Slavery International highlighted as much when she claimed “One big problem in the Thai fishing industry is the lack of certification of good slavery-free shrimp versus bad-shrimp.”

Speaking at a the Trust Forum Asia conference, Nick Grono, the head of Freedom Fund, said his organisation would spend $5 million dollars on an initiative to increase awareness and transparency across these supply chains.

The issues present in the Thai fishing industry are replicated across a plethora of industries in the developing world. In attempts to access cheaper products and produce, global buying teams are now extensively leveraging the developing world’s low cost base. More often than not, this means creating relationships with third party suppliers.

These relationships are notoriously opaque, meaning that procurement teams often lose sight of what is happening in their supply chain. Only through improving supply chain data and encouraging procurement teams to take direct responsibility for the actions of suppliers (and indeed their supplier’s suppliers) can we hope to put an end to these worrying practices.

More than 3,000 mid-sized Thai vessels will have to stop fishing on July 1 under government measures designed to curb illegal, unreported and unregulated fishing, the Bangkok Post reported.

Why are CPO’s scared of Social Media?

Why are CPOs scared of social media?

Noel Gallagher, he of Oasis fame, said earlier this year that musicians are “S**t scared of social media”. I think CPO’s are too.

This morning I carried out some rudimental research into the Twitter presence of the CPO’s of the world’s ‘market leading” brands. The results were telling. I searched Twitter for the CPO’s (or equivalent) at Apple, Procter and Gamble, Unilever, Coca Cola, GlaxoSmithKline, LG, Reed Elsevier and Shell and couldn’t find a Twitter account for any of them.

Its not just CPO’s either, it seems the whole C-suite really don’t care for social media. Research conducted by CEO.com and DOMO suggests that only 8 per cent of CEOs have a Twitter account and that a staggering 68 per cent of CEO’s have no social media presence at all! A CEO without so much as a LinkedIn account? Are you kidding?

Interestingly, Mark Zuckerberg is the only CEO in the Fortune 500 who is present across the five leading social media platforms, Twitter, LinkedIn, Google+, Facebook and Instagram (given he owns the last two, I guess he had a head start).

So why are CPO’s so anti-social (media)?

Sure, social media is a generational thing. Younger people ‘get it’ because they grew up with it and older people tend to struggle to understand it. Now let’s be honest, most CPO’s fall on the older end of the youth spectrum and hence are operating from a disadvantaged position. This however, is no excuse to ignore social media.

Like it or lump it, social media has become a critical part of our social fabric. It’s where we go to interact with people, inform ourselves and most importantly for businesses, it’s where we go to make our judgements and voice our opinions on brands.

We are judging you

While a traditional procurement leader may not see it, people are forming opinions based on their social media activity (or rather, lack thereof).

In the same way that recruiters will look at a candidate’s Facebook page to get an understanding of who they are; employees, suppliers, customers and shareholders are researching corporate executives to determine if they’ll make a good boss, business partner or are worthy of investment. Those that are not present on social media, miss the opportunity to put their best foot forward.

In the case of the companies I listed above, I’ve already established an opinion (a negative one) about them based on the fact that they don’t have a socially active CPO. In all likelihood, the opinion I have formed is incorrect and uninformed, but the lack of social presence has led me to subconsciously make certain assumptions about those departments and businesses.

The importance of socially connected leaders

To state the bleeding obvious, the business world has changed. Gone are the days of unknown senior executives ‘connecting’ with people through ads in local newspapers. The modern business environment is hyper-connected and driven by information.

Business executives are now seen as celebrities and the advent of social media has led people to expect access to celebrities. Richard Branson, Tim Cook and Mark Zuckerberg are the faces of their brands. The fact that their celebrity shines so bright also means they are incredibly effective marketing vehicles.

A company’s brand, as well as its understanding of its customer base and the market it operates in, now depend on its social presence. Put bluntly, there is an expectation, from customers, shareholders and the press that leaders will be active and accessible on social media.

Socially active leaders are better leaders

Not only is there an expectation that leaders will be active on social media, there is strong research to suggest that socially active leaders are better at their jobs. Brandfrog, a professional branding company, released a study in 2014 highlighting the importance of social media in the perception of company leaders. Below are some of the high level findings.

  • 75 per cent of US respondents agreed that CEO participation in social media leads to better leadership. This figure is up from only 45 per cent in the previous year.
  • 77 per cent of US respondents agreed that C-Suite executives that actively engage on social media create more transparency for the brand.
  • 83 per cent of US respondents agreed that leaders who actively participate in social media build better connections with customers, employees and investors.
  • 82 per cent of US respondents agreed that executive use of social media establishes brand awareness.
  • This one is particularly relevant to my Twitter research this morning; 77 per cent of US respondents believe that social media is a powerful tool for building thought leadership and enhancing the credibility of C-Suite executives with stakeholders.

The report lists many more stats, similar to these, that clearly spell out the case for CPO’s and others in the C-suite to start interacting on social media.

Get involved already!

Social Media won’t be optional in the near future – it’s not a passing trend. CPOs need to understand that in order to gain the respect of their clients, their industry and their staff, they simply must be present and active on social media. The good news is that the bar for CPO social media participation has been set so low that there is a huge opportunity to get in early and capitalise!

So here is my call out to the CPO’s – Sign up! Twitter, LinkedIn, Procurious, Google+, Facebook, Instagram. Who knows, you might even enjoy it, everyone else does!

I’m French, I’m a woman and I’m not an engineer

Finding the 'red thread'
Finding the ‘red thread’

Or so said Sophie Barthelemy, the Deputy General Manager in charge of Global Strategy for Indirect Purchasing of the Nissan Renault Alliance during her brilliant address to the ProcureCon Marketing 2015 conference audience.

Sophie was addressing some of the challenges she faced in integrating the procurement efforts of two teams, based in very different business cultures.

Finding the ‘red thread’

What began as a speech about combining the marketing efforts of two leading automakers took an about turn. Becoming an examination of the differing business cultures between France and Japan that Sophie admitted, had left her bewildered at times.

That was until she found the ‘red thread’ that unlocked the path to collaboration with her Japanese colleagues. The thread to pull, it turns out, was the Kaizen business methodology. Most of us have heard about Kaizen before, it’s essentially a framework for continuous improvement and has been attributed to the huge success Japanese firms saw through the 80’s and 90’s. As Barthelemy pointed out, Kaizen is a business mentality; it has to be engrained in your everyday decisions and should not be used on a project-by-project basis.

Sophie eloquently outlined that by immersing herself in the (very Japanese) Kaizen approach to business, she found doors starting to opening up with her Japanese counterparts. She highlighted that her approach required a significant departure from the ‘normal’ Renault way of doing things.

Building trust was addressed as being critical to achieving engagement with the alliance partners. Trust, in this instance, was gained by ‘speaking with data rather than with words’ and developing frameworks that ensured that success could achieved quickly and that everyone had visibility of the process.

Once Sophie had changed her perspective and starting thinking more Kaizen (she got better at drawing her problems than explaining them), she found that her voice was being heard more loudly within the organisation.

When she presented a Kaizen infused proposal to the CEO around how the alliance may readdress its approach to procurement, she unsurprisingly received buy-in. The projects and RFPs that resulted from her suggestions allowed the alliance to centralise its purchasing and reposition the way it managed spend. This resulted in double-digit savings, improvements in the quality of service the firm received and reduced the time spent on managing spend.

Cross-cultural learnings

Towards the end of her speech and during the question time, Sophie highlighted some great points about managing and succeeding in cross cultural business situations. She advised:

  • Accepting stereotypes, they are surprisingly accurate she said. Sophie suggested keeping only the positive elements of stereotypes and learning to adapt to the negative elements.
  • Communicating simply using pictures and data to explain your challenges and goals.
  • That the only way to gain trust is to ‘do what you said you’d do’.
  • As the title of this article suggests, Sophie suggests that humour is a great was to disarm a crowd.
  • If you are working with Japanese colleagues, you shouldn’t expect direct feedback but you should learn to read the weaker symbols of positive and negative feedback.
  • Silence is important. Take time to consider you response; don’t fill the air with noise.

And finally, if you are in Japan, don’t sit in the chair nearest to the door. That’s for the secretary.

ProcureCon Marketing – Adidas and Agency Management

Procurious is reporting live from ProcureCon Marketing in London. All week, Jordan Early will be tweeting, blogging, listening and sharing his learnings about the challenging world of marketing procurement.

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Day one of the ProcureCon Marketing conference focused largely on the marketing side of the procurement-marketing coin, with speakers discussing marketing trends and movements in the agency space.

On day two, we changed gears slightly to look internally at the procurement role in that relationship. The insights that stood out most for me came from the guys at Adidas.

Both Michael Pues-Tillkamp and Phillip Schuster, who spoke in separate sessions, addressed the way the company’s marketing procurement team set an initial course to verify and increase contract compliance, but through this journey, managed to unlock a plethora of innovation, not only for Adidas but also for the agencies they were engaging with.

Categorising for Category Management

Pues-Tillkamp outlined how Adidas has categorised its digital marketing spend, allowing procurement to generate and execute category management strategies within the realms of marketing procurement.

The categories they devised were:

  • ‘Idea’ – which included spend on creative and research;
  • Connection’ – which included media and digital spend;
  • ‘Experience’ and ‘Brand Materials’ which represented the more customer facing side of their engagements.

If I understood correctly, the team was not completely active in these final two areas just yet.

Pues-Tillkamp also walked the audience through a strategic agency engagement process that Adidas uses to run everything from agency selection and on-boarding through to project execution and final evaluation of its agencies. Each step of this process is supported by documentation, process and in-house tools that promote consistency and enable the team to compare agency performance.

Can you benchmark marketing?

The team at Adidas, with the help of some ‘clever MBA students’, even managed to pull together a benchmarking tool that has enabled them to compare the performance of its agencies. The tool was developed using only internal data, but when you have the marketing budget that Adidas does, you amass a great deal of internal data.

The outcomes of this benchmarking exercise, according to Pues-Tillkamp, have allowed the firm to conduct more intelligent and sophisticated conversations with its agencies and have enabled the team to provide realistic advice to the Adidas marketing group as to what campaigns can reasonably be achieved with its allocated marketing budget.

What a week!

Next up to the mic was Phillip Schuster who announced to the crowd that, not only was he happy to be at ProcureCon for the first time, but also that his football team had won the FA cup at the weekend, his daughter had just been accepted into the Adidas day-care program and that at the end of the week he was about to go on a period of extended leave. Not an all-together bad week!

Aside from personal milestones, Schuster also detailed the journey undertaken by Adidas marketing to integrate and leverage the company’s main brands Adidas, Reebok and golf brand Taylor Made.

He outlined some of legacy challenges in his procurement teams’ relationships with its marketing agencies and suggested that large part of the problem was the fact that that, in marketing, you don’t know what the product or service you will receive looks like at the start of the engagement. It evolves, which makes it difficult to apply traditional procurement pricing and management mechanisms.

Schuster discussed Adidas’ approach to agency management referencing the benchmarking tool discussed above, but also incorporating external market auditing and agency performance analysis. He highlighted that this is something Adidas does as part of an ongoing process rather than on an ad-hoc or project basis.

Not just financial benefits

The outcomes of this agency management strategy have been multiple for Adidas. From a financial point of view, the company has been able to run tight fee reconciliations, have identified instances of incompliant rates, fees and mark-ups and now have far better understanding of whether or not an agency is charging a ‘fair price’. From a contractual point of view Adidas improved its briefing processes and were able to take a tighter control of the company’s budgeting.

Efforts to better understand their agencies enabled Adidas to understand the cost structures at these agencies. The firm was able to identify salary levels, overheads and ultimately profit margins of its agencies, which again provided the firm with some leverage come negotiation time.

When questioned by the audience on the response of the agencies to the audits, Schuster highlighted that most were very accommodating (this may have something to do with size of the Adidas account) and that a number of the findings uncovered in the audit process were actually viewed by the agencies as business improvement opportunities.

Stay tuned for more for the ProcureCon Marketing Event.

ProcureCon Roundtable – Attracting and Retaining Digital Marketing Procurement Talent

Procurious is reporting live from ProcureCon Marketing in London. All week, Jordan Early will be tweeting, blogging, listening and sharing his learnings about the challenging world of marketing procurement.

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It’s day two of the ProcureCon Marketing event in London’s Hotel Russell.

Yesterday, I had the chance to sit in on a roundtable discussion, chaired by the indelible Myriam Benichou, the global purchasing director of marketing services at L’Oreal and attended by industry leaders from leading companies such as a Nestle, Coca-Cola, Renault, Sony and Novartis. The topic was ‘What are the competencies and how do you find talent in the digital marketing procurement space?’.

It’s a good time to be a digital marketing procurement professional

Procurement’s talent attraction dilemma has long been a topic of discussion on Procurious and beyond. Put simply, it’s been hard for procurement to attract top talent (even for companies with enviable global brands like L’Oreal and Coca-Cola).

This challenge amplifies when it comes to finding procurement people that understand that intricacies of marketing procurement and is further magnified when it comes to locating procurement staff that understand the rapidly changing (not to mention, highly competitive) nature of digital marketing.

So, for this discussion at least, we find ourselves at the thin edge of wedge.

During the roundtable, there was some great debate and discussion around what procurement teams can do to attract and retain digital marketing talent. Companies like Nestle and McCormick are going directly to universities to track down the new and evolving skillsets they require to operate in the digital marketing space. The external talent pool is so small, they said, that developing new young talent is critical. I also got the impression that the gloves were off for procurement teams looking to poach talent. If you are a digital marketing procurement professional, your stocks are high right now.

The idea that procurement teams should hire generalists or high potential employees from within their firm was also positioned as a potential strategy for filling digital needs. While there is a limited pool of digital talent in the external market, digital marketing is not exactly rocket science and given time and adequate resources, it’s possible to develop someone into a sound digital marketing procurement professional. A roundtable attendee from Novartis echoed these sentiments.

Enable procurement-marketing rotations

Many firms mentioned they were ’borrowing’ staff from marketing on secondment into procurement. It was, in fact, highlighted that marketing instigated a number of these arrangements as means to instil some of the commercial rigour procurement had a reputation of providing back into their own function.

One of the most interesting points I heard was that firms were collaborating across functions during the recruitment process for digital procurement talent. At Nestle, if you’re interviewing for a job as a marketing procurement professional, a senior marketing executive will interview you at some point. Given that they will effectively be your internal clients, this seems like a great way to create engagement and buy-in between procurement and marketing.

In terms of attracting new talent, a few of the larger firms mentioned that keeping a close relationship with your digital agencies was a great way to know when talent was moving in the market. Clearly, your agencies are working with, and posses a close knowledge of, many other procurement teams, so by keeping them close, you might just be the first to know when great talent is on the move.

The discussion was indeed interesting and the ideas truly innovative. However, I couldn’t help but feel that while these strategies, job rotations, calling in favours with the agencies and spending big on developing high potential staff members may be possible for the Nestles, Cokes and Sony’s of the world, the challenge will be more difficult for those without the budget and brand name of these larger firms.

Stay tuned for more for the ProcureCon Marketing Event.

If you were offered unlimited leave would you take it?

If you were offered unlimited leave would you take it?

It seems like a stupid question. You would no longer miss friends’ weddings. You could spend more time sailing, skiing, singing or whatever it is that makes you happy. Maybe you could even take that trip to Japan you promised your partner all those years ago…

On the surface, unlimited leave sounds a like a no-brainer for employees, but in recent years a number of companies have implemented these schemes and, perhaps surprisingly, they’ve tended not to work out.

Most people, myself included, would assume that an unlimited leave policy would result in workers taking more days off. However, the opposite is true. Firms with unlimited leave schemes in place have found that their employees are in fact taking less time off.

This is a worrying finding, as studies show that employees who take time off from their jobs return to work happier and more productive.

The fact is that our brains need breaks. The National University of Singapore found that “those who spent less than 20 per cent of their time perusing the Internet’s silly offerings were 9 per cent more productive than those who resisted going online.”

In the same way that watching the occasional cat video can improve concentration, taking a longer break improves people’s performance when back at work. A CCH Human Resources Management study showed that over 50 per cent of employees felt more “rested, rejuvenated and reconnected to their personal life” and that almost 40 per cent of workers “felt more productive and better about their job” after returning from time off.

So what is wrong with people?

Why don’t we take advantage of unlimited leave? The problem seems to be a matter of human psychology. Rather than seeing the opportunities and benefits that can come from the increased flexibility of unlimited leave, workers tend to focus on the negative aspects that might accompany the program.

No one wants to be seen as ‘the guy who takes the most leave’ as being thought of as ‘that guy’ can be linked to laziness or worse still worthlessness.

Mathias Meyer, of the firm Travis CI, provided the following insight into his organisation’s experiment with unlimited leave.

“When people are uncertain about how many days it’s okay to take off, you’ll see curious things happen. People will hesitate to take a vacation day, as they don’t want to seem like that person who’s taking the most vacation days. It’s a race to the bottom instead of a race toward a rested and happy team.”

Some of us want to ‘earn’ our fun

It’s a strange thing, but I think there is a large group of people who want to have worked hard and banked away their annual leave before booking a holiday. These people are looking for the sense that they have ‘earned’ their holidays. They’ve worked hard and the vacation days are a form a currency for this work that they are now entitled to spend.

The future of leave 

According to The Society for Human Resource Management unlimited vacation policies are only offered at 1 per cent of US firms, but a further 2 per cent of firms are said to be considering such programs. Tech and start-up firms like Groupon and Netflix dominate the group that has already adopted unlimited leave programs.

Unlimited leave policies, if implemented properly, certainly seem like an effective way to attract Millennials to your firm, not to mention a great way to remove annual leave accruals from your balance sheet.

I would also dare to suggest that outside of the US, where the majority of research and anecdotal evidence on unlimited leave programs has come from, the figures around staff actually using their leave entitlements under such schemes may be a significantly higher.

US employees across the board tend not to use their leave allocation. Only 51 per cent use their full allocation and 15 per cent use no leave at all. French workers, on average, take twice as many vacation days their American counterparts.

Petrobras Procurement Scandal Goes CSI

Petrobras Procurement Scandal Goes CSI.

After reading yesterday that the Brazilian government is considering offering leniency to the suppliers caught up in the Petrobras bribery scandal, my interest was piqued and I decided to look into the case a little more.

And wow, this one is interesting. It reads like the next HBO mini series; intrigue, bribery, political involvement and enormous sums of money. It’s all there.

But perhaps the most unbelievable twists (certainly the most macabre) were released this week when the congressional inquiry established to deal with the scandal filed for a court order to exhume the remains of the late politician Jose Janene after allegations were made by an unknown source that he might have faked his own death. It has been suggested that the former politician is now living in an undisclosed Central American nation.

Mr Janene was implicated in the scandal by Alberto Youssef, a black market money dealer. Youssef detailed that Janene, who reportedly passed away from a heart condition in 2010, was responsible for establishing the system of bribes and supplier kick backs that has brought the oil giant to it knees.

It’s not the first

Incredibly, this is not instance of a faked death involved in the scandal. Police have submitted evidence to prosecutors suggesting that another third party moneyman faked his own murder by mugging only to later turn up operating underworld business links between Europe and Brazil.

Not surprisingly, this case captivated the Brazilian public. 34 sitting politicians are now embroiled in the controversy. The recently re-elected president, who until now has avoided the controversy, is starting to come under fire particularly around the fact that she previously led the board of directors at Petrobras.

As discussed in yesterday’s Procurious article the scandal has had a dire impact on the Brazilian economy. In April of this year Petrobras estimated that the corruption scandal has cost the company R$6.2 billion or USD $2.1 billion. The company’s stock price has plummeted by around 30 per cent since criminal investigations started a year ago.

We can but only wonder, what comes next?

What the hell is an Intrapreneur?

What the hell is an Intrapreneur?

You know that anxiety that sets in when you’re in a meeting and someone mutters a new three-letter acronym (TLA) or buzzword you’ve never heard of before? The rest of the room nods and you start to sweat?

Well, that happened to me at the Big Ideas Summit. The term that did it this time was ‘intrapreneur’. So while the speaker continued on with his speech and the audience continued nodding approvingly, I raced to Google the term intrapreneur.

Branson’s been on it for years

Fortunately, it didn’t take long to find a blog by the venerable Richard Branson discussing the term intrapreneur. The blog was from 2011, which sadly for me, quashed my previous assertion that this term was nothing more than a passing buzzword.

Branson’s blog defined the term intrapreneur as “an employee who is given freedom and financial support to create new products, services and systems, who does not have to follow the company’s usual routines or protocols.” Right I thought, it’s basically an entrepreneur who works within a big company. My phone is put away, anxiety levels drop and I’m able to listen to the speaker again.

The more I’ve looked into the term intrapreneur the more I see that it’s become commonplace in many workplaces.

Most articles I’ve read suggest that the intrapreneur revolution is a response to the start-up culture that is currently challenging more traditional business models. As the image below suggests, business models are changing at an alarming rate and it’s not just the small end of town that are in the crosshairs of these new business models – large firms simply must innovate to stay competitive.

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Others have forwarded arguments that the fixation on regimented processes and standard operating procedures (that enabled business to grow and succeed through the 90’s and 00’s), are the very factors that will dictate their downfall in the future. Intrapreneurship is an attempt to turn back this tide and bring flexibility and innovation to large organisations that have previously stifled such efforts.

It works for Gen-Y

Not only does intrapreneurship allow organisations to address new business challenges, it seems to fit pretty well with the next generation of talent.

Gen-Y, the Millennials or whatever you want to call them, have been classified, (perhaps unfairly) as restless and keen to make an immediate impact on the organisations they work for.

It is for these reasons that large firms have struggled to attract young talent as the strict processes and internal hierarchy present in these organisations are a turnoff to the new generation.

This point is highlighted in the Deloitte Millennial Survey that was released in January of 2014. The study found that 70 per cent of Millennials see themselves working independently at some point rather than being employed within a traditional organisational structure.

The question is, can intrapreneurship provide employees at large firms with the autonomy and creative space to change the ‘traditional organisational structure’?