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E145 Fall 2007Session 9

Entrepreneurial Teams:

NanoGene Technologies Inc.

Tom Kosnik, Fenwick and West Consulting Professor, STVPAnd

Gordon K. Davidson, Firm Chairman, Fenwick and West

Copyright © 2007 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). This document may be

reproduced for educational purposes only.

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Our Agenda

• Teams open the NanoGene Technologies Case

• Discussion about compensation and culture

• Role Play the negotiation between four stakeholders: • Will Tomkins, Nanogene CEO

• Paige Miller, potential executive

• Will’s scientific cofounders

• Susan Stone, Venture Capitalist, potential investor

• Gordon Davidson: Lessons from the Valley

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© 2003 Mark P. Rice, Babson

Last Month:

Idea Versus

Opportunity

This Month:

Realities of

Business

Operations

Compensation& Culture

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Total

Remuneration

TotalDirect

Compensation

Figure 1-1. Model of a Total Rewards Program

Work Culture & Climate

Leadership & Direction

Career/Growth Opportunities

Work/Life balance

Job Enablement

Recognition

Intangibles

(Typically

Intrinsically

Valued)

Total

Reward

Cars

Clubs

Physical Exams

Perquisites

Retirement

Health

Time Off with Pay

Statutory Programs

Income Replacement

Benefits

Stock/Equity

Performance SharesLong Term Incentives

Annual Incentive

Bonus/Spot AwardsShort Term Variable

Base Salary

Hourly WageBase Cash

Source: Hay Group.

Total Cash

Common Examples Reward Elements Definition

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Understanding CultureMaslow’s Hierarchy of Needs

Order and Security

Affiliation

Achievement

Self-Actualization

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The Four Business Cultures

Google

AT&T Consumer

Microsoft

IBM

Cultivation(Self-actualization)

Competence(Achievement)

Collaboration(Affiliation)

Control(Order & Security)

IndividualAccountability

GroupAccountability

Make ithappen

Let ithappen

“Can do” “Did do”

7 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Cultivation Culture

Doing the unprecedented

Disruptive invention

Technology innovation

Brilliance

Self-organizing work

groups

Shared vision

R&D labs, creative

services

Cult

Core Motivation

Value Discipline

Differentiates by

Leads from

Organizes by

Accountable to

Preferred by

Degenerates into

8 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Collaboration Culture

Serving the customer

Customer intimacy

Application innovation

Trustworthiness

Process teams

Customer satisfaction

Marketing, customer

service

Club

Core Motivation

Value Discipline

Differentiates by

Leads from

Organizes by

Accountable to

Preferred by

Degenerates into

9 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Competence Culture

Beating the competition

Product leadership

Performance innovation

Expertise

Project teams

Metrics and compensation

Sales and engineering

Clique

Core Motivation

Value Discipline

Differentiates by

Leads from

Organizes by

Accountable to

Preferred by

Degenerates into

10 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Control Culture

Executing the plan

Operational excellence

Process innovation

Authority

Reporting hierarchies

Business plan

Finance, supply chain

Caste

Core Motivation

Value Discipline

Differentiates by

Leads from

Organizes by

Accountable to

Preferred by

Degenerates into

11 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Implications for Change ManagementEach Culture Responds to Different Levers

Cultivation Collaboration Competence Control

Motivation

FocusFreedom Relationship Compensation Promotion

Learning

StyleTrial & Error

Subjective

Feedback from

Customers

Objective

Feedback from

Metrics

Quantitative

Research

Negotiation

FocusWhat’s right What’s fair Rewards Benefits

Decision

StyleIntuition Consensus Debate Deliberation

12 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Implications for Change ManagementThe Challenge of Multiple Cultures

• Communicating across multiple cultures• Focus on the shared value in adjacent cultures

• Find the balance between diagonal cultures

• When the company culture ≠ departmental

culture• CEO establishes the corporate culture

• Local executive establishes the local culture

• Local cultures adopt corporate norms at the interface between

their organization and other organizations

13 Managing Change within Differing Cultures © 2005, TCG Advisors LLCOctober 31, 2007

Implications for Change ManagementThe Challenge of Multiple Cultures

• Communicating across multiple cultures• Focus on the shared value in adjacent cultures

• Find the balance between diagonal cultures

• When the company culture ≠ departmental

culture• CEO establishes the corporate culture

• Local executive establishes the local culture

• Local cultures adopt corporate norms at the interface between

their organization and other organizations

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A Negotiation Framework

COMMUNICATION

RELATIONSHIP

INTERESTS

OPTIONS

CRITERIA

COMMITMENT ALTERNATIVES

If “Yes” If “No”

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Negotiation: Role Play

• Gordy Davidson will be our Guest for the Role Play. He will lead the team representing Will Tomkins

• We will do a tag team role play the negotiation between four stakeholders:

• Will Tomkins, Nanogene CEO

• Paige Miller, potential executive

• (the class) Will’s scientific cofounders

• Susan Stone, Venture Capitalist, potential investor