Digital Ambassadors at Mobile Tele Systems (MTS):Transforming corporate officersinto new era entrepreneurs

EFMD Excellence in Practice Awards Competition

Digital Ambassadors at Mobile Tele Systems (MTS): Transforming corporate officers into new era entrepreneurs Mobile Tele Systems (MTS) & SKOLKOVO Business School

Executive summary > Introduction > 1. The Challenge > 2. The Commitment > 3. The L&D Initiative > 4. The Impact 3

Today, every company in every industry worldwide is vulnerable to digital disruption, and the telecommunications industry is on the frontier. The revenues from traditional services are gradually declining, forcing telecom companies, including Mobile Tele Systems (MTS), to search for the new business drivers and offer customers a more complex and innovative set of products and services. The market is subject to rapid technological change that requires continuous innovation from the players and makes digital transformation in the telecom industry an ongoing challenge.

Moscow School of Management SKOLKOVO (hereinafter, SKOLKOVO) developed an innovative educational programme for MTS to accelerate corporate development projects. The programme was aimed at developing leadership potential within the company, with the objective of helping MTS grow a new generation of leaders able to adapt to and perform in a fast-changing and uncertain business environment.

As a result of the programme, the company introduced a number of incentives to:

Develop an innovative corporate culture

Encourage personal and professional growth

Introduce new digital projects

Today, there are 4 major players in the Russian oligopolistic telecommunications market: the ‘big three’ mobile operators: Mobile Tele Systems (MTS), VimpelCom, and MegaFon, along with the state-owned telecommunications company, Rostelecom. These 4 companies account for over 90% of the Russian telecom market and are present in all major segments of the telecommunications industry.

Founded in 1993, MTS Group is the largest cellular operator in Russia and the CIS. The company provides a wide range of services including mobile and fixed-line services, Internet access, pay TV, digital services and mobile apps. The company was listed on the New York Stock Exchange in 2000 and, three years later, on the Moscow Stock Exchange. ↗ The MTS brand figured several times among the top 100 most valuable brands in the world ranking of BRANDZ and was recognized as the most valuable Russian telecommunications brand1.

Digital Ambassadors at Mobile Tele Systems (MTS): Transforming corporate officers into new era entrepreneurs Mobile Tele Systems (MTS) & SKOLKOVO Business School

Executive summary > Introduction > 1. The Challenge > 2. The Commitment > 3. The L&D Initiative > 4. The Impact 5

31%Market sharein 2017, Russia

consolidated revenue

€ 6.7 BLNin 2017

more than

100 MLNsubsribers in russia

70 000employees throughout Russia and CIS

Russia & CIS(Armenia, Belarus and Ukraine)

NYSE:MBTMOEX: MTSS

1 See Annex for more information about MTS Group

Digital Ambassadors at Mobile Tele Systems (MTS): Transforming corporate officers into new era entrepreneurs Mobile Tele Systems (MTS) & SKOLKOVO Business School

Executive summary > Introduction > 1. The Challenge > 2. The Commitment > 3. The L&D Initiative > 4. The Impact 17

was aimed at top-level executives and aimed to overcome the challenge of an inflexible corporate mind-set

PART IThe programme management team realized that these objectives were not possible to achieve through a traditional corporate training programme — a bespoke approach was needed. As a result, two separate parts for the programme were created:

targeted top- and mid-level management from across Russia and focused primarily on project work

PART II

Three pillars of the programme:

Innovative technologies and innovation management

Development of a collaborative innovation culture and innovative mindset. Cross-functionality of the projects

Innovation Management

Markets, strategy and marketing in the telecom industry with a focus on risk management

Leadership and change through the prism of risk management. A focus on how other sectors such as finance, IT and retail failed to adapt through the use of cases

Strategy, Change and Risk Management

Managing people and teams. Leader’s instruments. Fostering trust, partnership and openness

Personal potential development. Developing the new leader’s flexible mindset

Leadership, Personal and Professional Development

Digital Ambassadors at Mobile Tele Systems (MTS): Transforming corporate officers into new era entrepreneurs Mobile Tele Systems (MTS) & SKOLKOVO Business School

Executive summary > Introduction > 1. The Challenge > 2. The Commitment > 3. The L&D Initiative > 4. The Impact 18

The 5 modules of the programme conducted on the SKOLKOVO campus, were:

Strategy and managementin a digital environmentI

Corporate intrapreneurship. Innovative projectmanagement

II Design-thinkingIIIBehavioral econimics.Economics anddecision-making mindset

IV Leadershipand communicationV

PART IThe first programme aimed at top executives was launched in 2017. The programme consisted of 5 modules and included extensive intermodular work. A total of 57 people participated: Vice-presidents, regional directors and potential candidates for future С-level positions.

The participants were nominated by MTS and one of the conditions of their participation was self-co-financing, meaning that 20% of educational cost of the programme had to be covered by the participant. This motivational tool was a new practice for MTS.

6

7

7

membersof the Board

top-managers from HQ

regional directors of MTS divisions

executives 37

Part I participant profile:

57participants

11 women

46 men

Digital Ambassadors at Mobile Tele Systems (MTS): Transforming corporate officers into new era entrepreneurs Mobile Tele Systems (MTS) & SKOLKOVO Business School

28Executive summary > Introduction > 1. The Challenge > 2. The Commitment > 3. The L&D Initiative > 4. The Impact

“ ““I was considering additional education for a while, and when I heard about the SKOLKOVO programme I went to my supervisor and told him I would like to participate in the Part II. I did not fully understand what I would be learning, the first thing that attracted me was the SKOLKOVO brand, I thought to myself, “It would be great to get there” … When I got there, I realized that it was worth it. I realized I couldn’t have gotten such a level of growth anywhere else

Ivan Yatsko Participant, Director for

Regional Strategy at MTS

With these changes in the approach and outlook of the top management team, time to market was significantly improved within the group, which is essential for a telecom company in today’s world. As emphasized by many participants, the processes within the company became much easier and more efficient, “Before, if you had an idea, it was nearly impossible to break through the wall of hierarchy and bureaucracy. Now the wall is gone”.