‘Dream Schools’, Director Magazine, June 2011

This article continues the theme of the review in my last blog, that a key strategic priority for top management in the modern era is retaining innovative and entrepreneurial people. Gone are the days when such people were long term servants; now they will go where they are motivated to go, and that may be more about excitement and challenge than about money.

Articles in the Director are never short of examples and quotations, often so much that it gets in the way of the argument, and this is no exception. However, unlike other articles, the examples are well chosen, starting with that well known example of innovative success, Innocent Soft Drinks. One of Innocent’s founders, Richard Reed, is philosophical about losing innovative people and is proud of the number of former employees who have founded start-ups after leaving.

This raises a key question, not only can you retain such people over the long-term but should you even try? Reed sees losing innovators and entrepreneurs as the ‘flipside to running a truly entrepreneurial company’. Another modern success story, the Internet company Paypal, has seen former employees found new businesses and the CEO sees his ‘alumni network’ as a source of pride, including the founders of Linked In and You Tube. I wondered however if he would feel the same way if his alumni had opened up in more direct competition in markets with less growth potential.

The article then moves on to describe the common phenomenon of the early entrepreneurial culture which self-destructs as companies get bigger, become bureaucratic and are under pressure to grow profits. Ten years ago Microsoft innovators were becoming frustrated and leaving to join Google, now Google are finding the same problem as their people move to Facebook. How long before Facebook start to lose their people to the next big thing? This is partly technical according to the CEO of software company Red Gate; innovative people are not enthused by developing the fifth or sixth version of Windows but instead need new challenges.

Google has tried to solve this problem by giving 20 days ‘innovation leave’ and have found that this has led to breakthrough innovations. The key to keeping the true innovators is to continue to give them work they feel passionate about, to expose them to risk and excitement; otherwise it’s best just to let them move on to new challenges. Even though Innocent has accepted the eventual loss of some of its innovators, it still does what it can to delay the inevitable. It has developed a start-up incubator programme and the people involved report direct to the CEO, outside the normal organisation structure. This has some similarity to Procter Gamble’s approach above, though I am sure that Innocent would not go for P&G’s highly structured process.

This is an interesting if slightly shallow article which challenges some of the conventional wisdom around retention of people. It suggests that the loss of creative personnel should be managed rather than resisted. It would have been good to see this argument expressed more cogently, rather than presented mainly through examples and quotations.

Click here to read the article in full:

http://www.director.co.uk/