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Leap of Faith

Some companies are embracing a newfound commitment to the entrepreneurial spirit by encouraging employees to think and act like leaders.

Wednesday, May 7, 2014
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Ask the unaskable question."

Several years ago, MGM Resorts International adopted this phrase as its mantra and began coaching its management staff on how to think and act more creatively, more inspirationally, more entrepreneurially. The phrase was actually coined by Kevin Freiberg, a motivational speaker who addressed a group of MGM directors and vice presidents participating in the company's Leadership Institute.

Now, all of the company's 62,000 employees worldwide are encouraged to stretch their thinking by asking questions: Why do guests line up this way at the front desk? Why does this attendance policy exist? Do we really need this guest-registration card that we've been using for years?

"At the time, innovation and entrepreneurism were becoming more important in our corporate structure," says Michelle DiTondo, senior vice president of HR at the Las Vegas-based hospitality company. "Most of our front-line employees, the majority of their income is generated by tips. That, in itself, creates a sense of entrepreneurialism -- that you have control over a significant part of your income if you behave in certain ways."

But that's not always the case in corporate America. For many employees, their paycheck is the same from week to week. So are lengthy and cumbersome approval processes that can bring fresh and exciting ideas to a grinding halt, never getting off the ground due to endless approval delays. It can take a dozen signatures to approve an innovative project, change an old policy or just purchase a coffee pot.

Last year, Accenture conducted a survey titled Corporate Innovation is Within Reach: Nurturing and Enabling an Entrepreneurial Culture. More than one-third (36 percent) of the 800 corporate employees and business decision makers surveyed revealed they were too busy performing their job to pursue new ideas, while 20 percent stated they lacked management support for idea generation.

Worse yet, one-third of employees who quit to start their own businesses said the key reason they left was because they were not rewarded for entrepreneurial ideas. Another 77 percent reported that new ideas were only rewarded after being implemented and proven to work.

Building a culture of entrepreneurism in the workplace presents a new way of thinking and doing that is foreign to companies bogged down with nine-to-fivers and layer after layer of bureaucracy. However, in this global economy, building and supporting an entrepreneurial culture is a matter of survival. Companies must take a leap of faith by assigning projects to employees that stretch their talents, empowering them to make business decisions and treating them as business partners.

Change Employee Thinking

At MGM, HR has played a key role in building and supporting the company's entrepreneurial culture.

For many years, HR has coordinated its Leadership Institute, a year-long program in which 30 people at the director and vice-president level meet once a month to take a deep dive into a number of areas, such as operations. Three years ago, HR added a session on innovation.

While working in teams, DiTondo says, participants spend four hours brainstorming ideas that can generate $1 million in incremental revenue, spend several more hours selecting and refining one idea, and then present it the next morning to the company's chief operations officer. "It's a way to set expectations that we're really going to get them out of their comfort zone to get them to think differently," she says.

One team, she says, recommended against the current practice of branding water bottles with individual property names. Instead, they pitched using the company's loyalty club brand called M Life. The idea was later adopted and saved the company roughly $400,000 annually, mainly due to economies of scale.

Still, many ideas to improve the guest experience come from front-line workers. To enhance communication between employees and senior leaders, property HR leaders created communication strategies for each property president, which includes focus groups. DiTondo says such groups encourage employees to think for themselves and creates a straight line of communication between employees in all directions. HR determines everything from the format and follow-up plan to the number of groups that will be held each year, which differs between properties.

Recently, HR implemented Workday, which includes an employee directory containing phone numbers and email addresses of every employee, including senior leaders. This level of transparency opens borders within the corporate hierarchy and empowers all employees to directly communicate with senior executives, something that is often taboo in the corporate world.

DiTondo says creating an entrepreneurial culture offers value on many levels. As an example, she points to valet employees at The Mirage who implemented several ideas on their own to improve guest-score surveys, such as calling guests by their names and speedier car retrieval.

Guest-survey scores for the department rose 1.4 points to 96.7. Perceptions of trust and empowerment also increased. There was a two-point increase from 77 to 79 on the employee-opinion survey regarding this statement: "I am trusted to make decisions on my own."

The company also scored 88 on a 100-point scale when employees responded to the following: "I often challenge myself to find better ways to do my work."

"This is the culture we created, an entrepreneurial culture," says DiTondo, adding that 90 percent of MGM's workforce is made up of hourly employees. "HR's responsibility is really creating that culture of inclusion where employees feel comfortable with surfacing ideas, where [they] feel like their ideas are important."

Building From Scratch

Last October, Coeur Mining relocated its corporate office from Coeur d'Alene, Idaho, to Chicago. Since only a handful of staff actually made the move, the silver and gold producer took advantage of the opportunity to recruit employees who would match the new culture that relatively new CEO Mitch Krebs began building in 2011.

"We really got a chance to push-start in our corporate office the culture of entrepreneurism," says Keagan Kerr, vice president of HR and communication at Coeur, which has 2,000 employees. "Changes with our CEO and executive team really gave us a chance to start things over. It's important for employees to know they can make a difference . . . if they think something should be done, to just do it. We think that definitely helps business outcomes."

Coeur decided to transform its traditional business culture last year, when senior executives at the 85-year-old company realized they would not gain the business momentum or achieve real progress by maintaining the same old practices.

Enabling off-site workers to make decisions that impact their daily performance is good business, they thought. Oftentimes, those in the trenches are in the best positions to troubleshoot and create solutions that trump traditional practices.

The company embraced this practice, informing its employees to follow through on good ideas, says Kerr, adding that the company's flat organizational structure works well with this approach.

For example, engineers working at a large, open pit mine in Rochester, Nev., recently redesigned some of the roads in the mine to help improve productivity. Haul trucks are now able to quickly move tons of rock within the mine for processing. No corporate approval was needed.

All senior executives delivered this message to their own teams. The COO also spoke with general managers and vice presidents of operations about the new entrepreneurial culture and how it would better position the company to operate in a global, competitive market.

HR also contributed to the new culture by changing its standard process for employee performance reviews. No more ratings, says Kerr. The process, referred to as a culture of achievement, includes ongoing conversations or checkpoints between employees and their managers. Together, he says, they set realistic goals and hold employees accountable for achieving them. This prevents workers from pointing fingers at other staff, stiff policies or outdated practices.

Although some companies might rest on their laurels at this point, thinking they've achieved entrepreneurism, they haven't crossed the finish line. To build a true entrepreneurial culture, employee capabilities must also be stretched. Kerr knows this.

In the past, he says, consultants were hired to tackle tough challenges. Now, employees are being asked to get involved in various projects, even those outside their areas of expertise. Take Kerr, for example. He's forming a political-action committee called the Coeur Mining PAC to better inform and educate political candidates about mining activities.

So far, he says, the biggest challenge has been communication -- encouraging employees to think, act and feel entrepreneurial.

"I want employees who are at home on a Saturday not necessarily working, but always thinking about how they can improve our business, improve themselves, how they can develop and make the company better," says Kerr. "That's what I want as an HR executive -- people who actually think about this company, that they know they can actually make a difference just through their thinking."

Passion and Power

In an entrepreneurial environment, not every employee, business unit or department may adhere to the same set of concrete rules. In fact, there may be no rules at all.

The best advice from those who've mastered such an environment is to just do what works best within the company's financial, cultural and ethical boundaries. That seems to be the mantra for some organizations, including kCura. In the spring and fall, the Chicago-based software company hosts a week-long hackathon, encouraging its 355 employees to work on various ad hoc projects that could be future software releases.

"They work on what they're passionate about as it relates to our product," says Chris Jenkins, senior manager of talent acquisition at kCura. "We definitely implemented quite a few of these suggestions that our developers have come up with and they really own those ideas."

The company's entrepreneurial spirit funnels down from its CEO, Andrew Sieja, who demonstrates his passion for innovation, risk-taking and after-five o'clock thinking. In the early days, says Jenkins, Sieja crashed on the floor in friends' hotel rooms during trade shows so he could demo his software to attendees. Still, not everyone can or wants to be an entrepreneur. Jenkins says HR carefully screens candidates for entrepreneurial values, seeking those who care more about creativity and continuous challenges than titles or stability.

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If HR continually hires people without entrepreneurial skills, Jenkins believes, the culture is bound to change. Employees who originally created or supported the culture may become frustrated and quit. Worse yet, he says, companies can lose out when recruiting top talent.

Last year, Catamaran, a pharmacy benefit manager based in Schaumburg, Ill., built a haven of sorts for its entrepreneurs. This 24,500-square-foot facility in downtown Chicago, called the Innovation Center, showcases next-generation ideas that combine the latest technologies with advanced analytics, says Mike Rude, senior vice president and chief human resource officer at the 4,000-employee company.

Catamaran's cross-functional innovation review board -- composed of senior leaders -- sorts through employee ideas. Members are hand-picked by a dedicated innovation team that also selects and implements ideas. One idea, for instance, was a video-consultation service that connects newly diagnosed patients with complex treatment regimens to a company pharmacist, offering patients a personalized experience via advanced support and education.

Many employee meetings are also held at the center with clients or thought leaders to brainstorm solutions, define business imperatives and establish innovation priorities.

"The Innovation Center embodies the entrepreneurial spirit and allows us to showcase our best ideas from some of the most innovative thinkers," says Rude. "This is a strong tool for engaging our employees as we all work together to create a pipeline of innovations that hold real value for our clients."

Building Blocks

Most corporate initiatives start from the top and developing an entrepreneurial culture is no different.

HR can kick-start the process with senior-management discussions focusing on the benefits or value of an entrepreneurial culture, how to build it, and how to define roles, such as who will lead the transition, says Susan Foley, managing partner at Corporate Entrepreneurs, a professional-services firm in Melrose, Mass., that helps companies develop corporate entrepreneurship as a core competency.

Just don't confuse entrepreneurism with innovation. It's much more than offering an employee-suggestion box. The difference, says Foley, is knowing how to turn creative ideas into a business.

Who better than HR to facilitate this process? HR can identify employees with capitalist capabilities, ranging from those who excel at developing strong external relationships to those who enjoy navigating new environments, and tailor rewards and establish boundaries for decision-making. Even managers need to be trained in how to allocate flexibility in work assignments. HR can help set parameters, such as letting employees spend 15 percent of their work time on new ideas, Foley says.

Once the culture is built, HR can monitor and track the allocation of resources, ensuring that the organization's entrepreneurs receive leadership support and act as a sounding board for those encountering obstacles, says Foley. HR may also need to create an employee training program to enhance or develop their entrepreneurial skills.

All too often, performance metrics for entrepreneurs are too rigid or lax if closely tied to the core business, adds Sarah Fisher, director of global-market development at Janssen Healthcare Innovation in Amsterdam, a small business unit within Johnson & Johnson.  She adds that the goals for a new business unit can differ from the core business.

Fisher says HR can develop realistic metrics. Likewise, since many entrepreneurs don't know where they want to be 10 years from now, HR can also outline promotional opportunities and help them sign off on a career path.

Any way you look at it, she says, HR is in a unique role to help drive recognition among core businesses that entrepreneurs are strongly needed within the organization.

Back home, universities are promoting this same concept. Donald Kuratko, executive director of the Johnson Center for Entrepreneurship and Innovation at Indiana University at Bloomington, offers a seven-module training program to help employees better understand and practice the art of entrepreneurship.

Module one presents an overview of the entrepreneurship experience, module two discusses the thinking process surrounding innovation, module three addresses idea acceleration, module four involves creating solutions to in-house barriers to entrepreneurship, module five addresses failure recognition or how entrepreneurs may grieve over a failed project, module six explores how to form innovative teams and, in the last module, participants develop an innovation-action plan.

Kuratko suggests piloting the program with 20 to 25 managers, followed by their direct reports who will form teams and develop ideas. Then, everyone will be in sync with the overall process.

Although entrepreneurism might not be the ultimate panacea for corporate America's troubles, it can lay the foundation for success by helping companies become more adaptable and ready for change.

"If HR can harness the innovative power of people inside their organization, it is incredible what the organization can actually do and perform," says Kuratko, also a professor of entrepreneurship in the Kelley School of Business at Indiana University. "This is huge for HR professionals."

Read also:

An Entrepreneurism Checklist

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