Marwick 05/2016 ENG by KPMG Česká republika

SEPTEMBER/OCTOBER 2016

A magazine for clients and friends of KPMG Česká republika

p. 6

GREED

Why do employees steal from their employers? p. 12 p. 22 p. 34

Are solar panels worth it? We’ve done the maths Gamification: Games adults play Czech patrons supporting young scientists

Investment in the Czech Republic Background information for foreign investors

Download at www.kpmg.cz. For a hard copy brochure please contact aliprtova@kpmg.cz.

© 2016 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

3 — editorial

If not companies, who else? Socially responsible business is a relatively new phenomenon and some people mistake it for the activities of non-profit organisations. Its goal, however, just like in all business models, is the generation of profit. Other than that, the business plan of this type of business also includes addressing social issues such as employing disadvantaged persons, making education and quality health care accessible to socially excluded persons, etc. Hand in hand with the development of socially responsible businesses goes another phenomenon – an overall shift towards and the comeback of the role of exemplary companies in society. We should not forget that entrepreneurs have always played very significant roles, be it in the advancement of scientific research, the generation of national wealth, the development of regions, or philanthropic activities. During the past nearly three decades, however, Czech entrepreneurs seem to have forgotten about this role and appear to have ignored the externalities their businesses create. Fortunately, this has been changing, as we can see on a day-to-day basis. The role of companies in society is the greater, the bigger the feeling of endangerment, social instability and the gap between the social classes, regardless of whether these phenomena are real or presumed. In the Czech Republic, nearly four fifths of people capable of work are self-employed or employed in the private sector, in stark contrast to the one fifth of civil servants. If companies are well aware of their role in society and their share of responsibility towards their surroundings, if they provide training to their employees and teach them, leading by example, to act in a fair and cooperative way, they may be better guarantors of a positive future than the state itself. In this issue of Marwick you will not only read about how some companies view their social responsibility and role in society. We have also included some inspirational stories on successful entrepreneurs and plenty of facts and advice, always with the aim to inform on the state of affairs and to lead to their improvement. � Karel Růžička Partner in charge of the non-profit sector KPMG Czech Republic kruzicka@kpmg.cz

Marwick – a magazine for clients and friends of KPMG Česká republika. Published six times a year by KPMG Czech Republic, Pobřežní 1a, Praha 8. MK ČR E 22213. On-line subscriptions available at www.marwick.cz. Editor in chief: Michaela Raková Art director: Štěpán Prokop Photoeditor: Barbora Mráčková Copy-editor: Edita Bláhová Cover illustration: Václav Havlíček KPMG Česká republika’s offices are located in Prague, Brno, Ostrava and České Budějovice. www.kpmg.cz © 2016 KPMG Czech Republic, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative („KPMG International“), a Swiss entity. All rights reserved.

EUR 2,496

EU funds per capita in the Czech Republic

EUR 1,848

the average for Central and Eastern Europe

EUR 21.63 billion

can be utilised by the Czech Republic in 2014-2020

While Poland had the biggest share of EU funds available in 2007-2015, Estonia, Hungary and the Czech Republic boasted the highest amounts of contracted grants per capita. In the case of the Czech Republic, the amount was EUR 2,496, well above the average of EUR 1,848 for Central and Eastern European (CEE) countries. Such are the findings of EU Funds in Central and Eastern Europe, a study examining the EU funds implementation process. KPMG’s analysis shows that the speed with which individual CEE countries utilise EU funds has changed significantly over the years. “In this respect, we need to be critical and admit that the Czech Republic, along with Romania and Croatia, failed to prepare quickly enough for the effective utilisation of these funds,” says Jan Linhart, a partner at KPMG Czech Republic’s Tax practice. In 2007-2015 the EU funds available to the 11 CEE countries amounted to nearly EUR 176 billion, equalling 14.8% of their aggregate GDP. As at the end of 2015, 163.66 billion, i.e. 93%, had been paid out. Of the total amount, 15% was utilised by the Czech Republic, 6.6% by Slovakia, and 38.2% by Poland. EU funds totalling EUR 189.96 billion are available for the 2014-2020 period. The amount of funds allocated to individual countries for 2014-2020 varies greatly; the largest volume has been earmarked for Poland (EUR 76.87 billion), while the Czech Republic and Slovakia may utilise up to 21.63 billion and 13.77 billion, respectively. The highest per capita amounts have been allocated to Estonia and Slovakia. “Today, the amount of funds allocated to each country is no longer the only factor behind successful implementation. The focus in the current period should instead be on effectively using the funds to markedly boost the socio-economic standard of the supported regions,” concludes Jan Linhart. Source: “EU Funds in Central and Eastern Europe”, a study prepared annually by KPMG in Central and Eastern Europe based on local and Eurostat data. Download the KPMG

Illustration: Barbora Tögel

study at www.kpmg.cz.

4 — EU fonds

So what about your 2,500 euros?

About the author Dr Gregory Morris from the British University of Exeter is a renowned professional with immense experience in transfer pricing. He came to the university from the law firm DLA Piper, where he served as a head of tax for Europe. In May, Gregory Morris gave a presentation at the KPMG Transfer Pricing Forum.

In recent years, interest in the tax behaviour of corporations, particularly multinational groups (MNCs), has increased. MNCs who pay little or no corporate tax in a country are now openly and robustly discussed. Although such tax behaviour may be legal, it is condemned by some as immoral as through such behaviour MNCs are not paying their ‘fair share’ of tax. In this context, can corporations be subject to moral appraisal rather than, say, economic appraisal? This is a very important and difficult question that touches the heart of the relationship between corporations and society. To answer it we need to understand many topics: the nature of a corporation, the operation of tax codes and when and how moral appraisal may be appropriate. The latter topic is contentious, but it is accepted by most that honesty and integrity are vital and perhaps it is only by reference to these standards that moral judgements can be made. A company owns property, assets and resources but needs human beings (the directors and employees) to operate and to use the assets for the purposes of the company, which is usually maintaining and increasing the value of the company’s assets. A country’s tax code defines taxable income. A tax code appropriates part of the taxable income created by a company and uses it to provide public goods, etc., the existence of which may be necessary for a company to operate. The crystallisation of a tax liability therefore results in a reduction in the value of assets owned by a company. By identifying taxable income, a tax code also creates the possibility of choice. Careful appraisal of a tax code identifies arrangements that, if chosen, can be expected to result in a lower tax liability. For example, a tax charge of 1,000 will be imposed if Arrangement A is selected but a tax charge of only 100 arises if Arrangement B is selected. A company may

legitimately choose between Arrangement A and Arrangement B. How can negative moral judgement apply if a more favourable tax arrangement is selected when the directors have a legal obligation to maintain and/or enhance the value of the company’s assets? Indeed, surely directors (and their advisors) have a legal (and moral) obligation to robustly engage with a tax code to ascertain not only when tax is due but also when tax is not due. This suggests that a company (and tax advisors) has a legal (and moral) right to engage in behaviour that results in a more beneficial tax position. Even so, there may be occasions when more tax is paid than that offered by a viable alternative, for example, if the reputation of the company (and hence its value) would fall if a type of tax behaviour not approved of by customers were chosen. Is there then no room left for moral appraisal of corporate tax behaviour? Most definitely, morality is still relevant. Tax codes and corporate arrangements can be complex and uncertain. Appraising a tax code before a decision is taken and agreeing the actual tax consequences with a tax authority after the event (compliance) requires a company (through its agents) to act at all times with honesty and integrity. Corporate tax behaviour that relies upon a lack of transparency or partial disclosure lacks these crucial moral characteristics and can rightly be considered immoral. In contrast however, it is difficult to justify how choosing an arrangement with a lower tax liability, when undertaken with honesty and integrity, can be subject to negative moral appraisal.

Text: Gregory Morris

5 — tax

Corporate tax behaviour and morality

Text: Pavel Urban

6 — topic

A nice guy in his fifties? A great colleague - but maybe also a fraudster…

7 — topic

No masks or fake guns. Today, fraudsters steal money in more refined and less striking ways. The typical Czech corporate fraudster is a male manager between the ages of 46 and 55. Why does he steal? Blame it on Czech corporate culture. ↓

In the Czech Republic it is in many areas still quite common to think that it is fairly normal to steal and that everybody does it to a greater or lesser extent. “It’s surprising that in the Czech Republic fraud is considered a common part of corporate culture, while in the rest of Central and Eastern Europe, just like in the rest of the world, the key motive for fraud is personal financial gain,” says Maroš Holodňák, director of the forensic department at KPMG Czech Republic. �

Greed or hiding losses Globally, a typical fraudster is mostly between the ages of 36 and 45 years, i.e. a decade younger than in the Czech Republic, and has not been employed at the company for a long time. What is more, to be able to engage in shady deals it suffices to be part of middle management. These facts and figures emanate from Global Profiles of the Fraudster, a KPMG study prepared by forensic audit teams working on the detection of fraud in companies throughout the world. Interestingly, in one third of the cases the reason for the fraudsters’ dishonest behaviour is their dissatisfaction with salaries. People also perpetrate fraud because they aim to fulfil goals that are too ambitious or to hide losses. They fear losing their positions or are simply greedy. Czech fraudsters are usually employed by the company they choose to victimise. And one more curiosity: While in 2007, executive directors were represented among fraudsters in only ten percent of the detected cases, this figure has now risen to one third! Minor clues Even though you may feel that nothing bad is going on around you at work, all may not be well. Fraudsters usually issue only subtle signals that may in the end betray them. They never go on vacation, for example. They do not even want to be promoted, as they need to have everything under control where they are. “The criminal activity is often detected by chance, for example when the fraudster gets ill,” as Aneta Kubínová of the forensic department at KPMG points out in one of her blogs at zpodpalubi. cz. Fraudsters also have above standard relations with their customers and business partners. When their greed gets the best of them, however, they may give themselves away by surrounding themselves with strikingly luxurious things. Hence, similar signals should not be overlooked. © 2016 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

8 — topic

Unheeded for years When a person has held a good job as a director of a company for over six years and has come to know the company inside out, they may be more easily lured by less than honest bonuses. Just as the proverb says: Opportunity makes a thief. If they go about in a clever way, they are likely to get away with it for years. The majority of detected crimes had been going on for more than three years. “This shows that our fraud detection systems are still less efficient than in other countries,” comments Holodňák. A typical fraudster acts in a superior but friendly manner. You may know them for years and still have no clue that they have been stealing from the company.

Treading lightly The fact that sometimes fraudsters get away with their fraudulent behaviour for several years is mostly due to insufficient controls. In some countries internal audits have proven successful. In Germany, for example, they have helped detect over a half of all investigated frauds, while in the Czech Republic the figure was a little over ten percent in the past years, as internal audits have not yet become common practice. Hiring experts will definitely cost a company less than what they would incur if fraud is not detected early enough. But how should a manager or an employee react if they suspects that one of their colleagues has perpetrated a crime? Clearly, common sense would tell us to report it all. But to whom and how? Such accusations might have an adverse effect on relations within a company and morals among employees.

What to do with the sinners? What can happen to whistle-blowers has already been outlined above. But what happens to those who have been stealing money from a company? The most common consequence is their dismissal; however, in the Czech Republic, a whole quarter of fraudsters manage to get away with no persecution. This is twice as much as in other countries. Companies often find it difficult to admit they have employed a fraudster. “They are trying to proceed as carefully as they can. A crime report is filed in only one tenth of all detected cases,” Kubínová adds. �

9 — topic

Be a courageous whistle-blower Nowadays, the most efficient way to detect fraud is whistleblowing, literally signalling that the rules of the game have been broken. Whistle-blowers report dishonest practices at work, ideally using a specialised hotline. You can find more advice at bezkorupce.cz, for example. In the Czech Republic, 43 percent of all fraud cases were detected thanks to whistle-blowing, compared to 35 percent globally. Anonymous fraud reporting has also proven successful. “We believe that anonymous reporting and whistleblowing are the most efficient detection methods, especially where fraudsters

are in collusion,” says Jimmy Helm, KPMG’s partner in charge of the forensic department. Internal audits and controls, on the other hand, are not that efficient because intelligent fraudsters know how to avoid them. Surprisingly enough, one tenth of fraud cases in the Czech Republic are detected by chance. In most European countries, however, whistle-blowing is fraught with major difficulties, as this practice still has no solid legislative background. A whistle-blower may subsequently encounter bullying or even be dismissed for casting the company in a negative light. Two years ago, the civic association Oživení analysed the interviews of 40 whistle-blowers from five European countries. All except one faced various retaliative measures from their employers.

Embezzlement is number one

Working with accomplices

Act in the pipeline

↓

The number one fraud committed both in the Czech Republic and abroad is the embezzlement of property and money, while a key motivation of fraudsters is greed. During the past two years, however, manipulation of financial records or accounting fraud have also become quite common.

In their dishonest practices, the prevailing majority of Czech fraudsters (85%) are aided by accomplices. Globally, this proportion is lower (61%). Often, a mixed group is involved – made up of two to five persons from the fraud target, suppliers and other companies. Women, on the other hand, tend to act alone.

Better times may be on the horizon for whistle-blowers reporting unfair practices such as corruption and embezzlement. A bill on the protection of whistleblowers from unjustified persecution by their employers is currently before parliament. It remains to be seen if and when it will pass.

Their work is somewhat mysterious. Together with Aneta Kubínová, however, we can take a closer look at their work-day. Forensic services comprise four key areas. ↓ 1. Risk management once fraud occurs

2. Investigation

3. Advisory when solving disputes

4. Forensic technology

↓

Experts help clients draft, implement and evaluate codes of ethics, compliance goals and related controls. And also introduce comprehensive fraud-fighting programmes.

The objective is to help clients find out whether fraud or other illegal acts have been perpetrated. Experts endeavour to confirm or allay clients’fears that they have a crook on their team. Or they help locate and catch the criminal.

This involves preparation of expert opinions that serve as supporting materials in judicial or arbitration proceedings. Typical questions relate to the amount of damage. Experts may also serve as arbitrators or mediators.

A department of data analysts who identify, collect and analyse accounting documents and other information necessary for trials or investigations.

10 — topic

So what is it that forensic experts do?

There are new competitors with a fresh vision Is your company agile enough to outpace them?

Using innovative tools, thinking and frameworks, KPMG can help adapt your business in the face of constant disruption. kpmg.cz

Anticipate tomorrow. Deliver today.

© 2016 KPMG Česká republika, s. r. o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International“), a Swiss entity. All rights reserved.

12 — energy

Are rooftop solar panels a good investment? We’ve done the maths

Two fields of human activity, both featuring batteries as a key element, are approaching a crucial turning point – the automotive industry and power engineering. The debate on energy sources for households has so far been centred primarily on technical, or rather ideological, aspects. But the arrival of profitable solar panels for households has ushered in factors similar to those affecting the automotive world, such as the desire to be independent, different and environmentally-friendly as well as the need of people to confirm their social status. The financial aspect of the matter is strongly influenced by subsidies provided by the state and its commitment to meeting EU targets for the share of energy consumption from renewable energy sources (RES) for 2020 and 2030. Decentralised sources in the form of family and corporate solar power plants mounted on buildings, together with increasing energy efficiency, represent a solution jointly supported by (often disparate) groups of experts. Companies and households can currently utilise aid from three main programmes designed to support RES and decentralisation (see info box). Another milestone in the development of decentralised sources is expected as new types of batteries become available and their prices fall. According to optimists, in just a few years’ time a home installation will pay off even without a subsidy. At present the economic benefits of a photovoltaic (PV) power station for a household are not very significant. However, as demonstrated by the example below, the investment is no

longer loss-making, mainly thanks to subsidies. Major energy suppliers nowadays offer end users not only the core commodity but also various energy solutions, including the installation of a rooftop PV power station. One provider recently reported dozens of installations and hundreds of orders. Our example examines two supported types of rooftop installation: a 2.2kWp PV system with excess solar power stored in hot water and a 4kWp PV system with excess solar power stored in a battery. As evident from the parameters on which the calculation is based, our estimate is rather conservative. Still, it’s becoming clear that contemplating your own power plant might make sense today. According to our conservative estimate, the investment should pay for itself in 11 years in the case of the first scenario, or in 15 years when using batteries. We expect to see rooftop PV systems being installed on a larger scale in the Czech Republic only when battery systems become more affordable and efficient or if net metering is introduced or if there is a further decrease in the prices of rooftop PV systems (or an increase in subsidies for installing them). � Petr Lux Manager, Management Consulting KPMG Czech Republic plux@kpmg.cz

Martin Barany Senior Consultant, Management Consulting KPMG Czech Republic mbarany@kpmg.cz

Subsidies

13 — energy

↓ Enterprise and Innovation for Competitiveness Operational Programme 2014–2020 �

PRIORITY AXIS 3: efficient energy use, power infrastructure development and RES

Environment Operational Programme 2014–2020 �

PRIORITY AXIS 5: energy saving

New Green Savings Programme (third call – ongoing until 2021) �

Detached houses: Area C.3 – efficient use of energy sources – solar power systems

2.2kWp PV system with excess 4kWp PV system with excess energy stored in hot water energy stored in a battery Example input parameters Investment TCZK 70.4/kWp Electricity price growth rate 1,5% Electricity for own consumption 80% Utilisation of installed capacity 1,050 h Price of electricity (incl. distribution) CZK 4.15/kWh Price of electricity supplied to the grid CZK 0.85/kWh � Payback period 11 years with a subsidy (17 years without a subsidy) � Additional indicators (for subsidised investments) NPV (25 years) CZK 84,319 IRR (25 years) 3,5%

Example input parameters Investment TCZK 93.5/kWp Electricity price growth rate 1,5% Electricity for own consumption 90% Utilisation of installed capacity 1,050 h Price of electricity (incl. distribution) CZK 4.15/kWh Price of electricity supplied to the grid CZK 0.85/kWh � Payback period 15 years with a subsidy (20 years without a subsidy) � Additional indicators (for subsidised investments) NPV (25 years) CZK 87,790 IRR (25 years) 1,8%

Mobile data brings more love to Czechs

Illustration: Barbora Tögel

The use of mobile data globally is growing by dozens of percent annually, and the Czech Republic is not an exception. According to a survey we carried out on a representative sample of 1,800 users of the mobile internet, Czechs on average use 600 MB of data monthly. Compared with other developed countries, this number is below average, but the Czechs will probably soon catch up, among other things thanks to the completion of the LTE network which today is available to 92% of the population, as well as greater market flexibility and especially the quality of life that the mobile internet has brought to its users. More self-education, better travelling, less planning, meeting people The survey shows that two thirds of all transferred mobile data are used by just five most highly used applications. While on the mobile internet, Czechs use 15% of their data on social networks, while 40–60% of the transferred data is attributable to video content, primarily viewed on YouTube. All in all, Czechs use the mobile internet mainly for communication and obtaining information. More than two thirds of the respondents mentioned communication, surfing the internet, searching for information, navigation and social networks as the main activities for which they use the mobile internet. Every sixth respondent admitted that due to the mobile internet they have limited direct personal communication with their friends and now prefer to stay in touch online. However, every sixth respondent also mentioned that thanks to the mobile internet they now make new friends or meet new partners more easily. A real change in behaviour across the entire population has become evident - the survey results suggest that the size of the respondents’ place of residence does not have any impact on their answers concerning habits; hence, behavioural changes appear to have taken place more or less across the board.

Czechs using data The KPMG survey suggests that the mobile internet is used more often by men (60% men vs. 50% women). The popularity of the mobile internet usually grows with the size of a town, the highest educational degree achieved and naturally with the level of earnings. The mobile internet is especially popular with younger generations. Almost 70% people aged 18–34 years use the internet on their mobile phones. However, this number declines to less than 50% of people aged 45–54 years and to a third in the age group 55–64 years. Young people use the mobile phone for several hours every day. Our survey shows that young people aged 18–24 years increasingly often watch whole TV series episodes, parts of them, music videos or movie trailers. Although these services require huge amounts of data, this group is in fact mostly represented in the sample using the lowest mobile data tariffs up to 200 MB per month. It can thus be concluded that young people mainly use Wi-Fi connections. In contrast, a typical person who pays for mobile user data is a man aged below 44 years of age, residing in a town with over 100 thousand inhabitants, having at least a secondary degree and an average salary. Steve Jobs once likened computers to bicycles for our minds – a smart phone connected to the internet can thus be similarly seen as a bicycle for our entire life. Ondřej Holek Senior Manager In charge of the telecommunication sector oholek@kpmg.cz

14 — telco

It has been a while since the main characters of You've Got Mail, Tom Hanks and Meg Ryan, met and fell in love over the internet. To this day, however, the ongoing development of the internet, especially the mobile one, continues to significantly influence and change human behaviour. A recent KPMG’s survey has taken a closer look.

From the Czechs and mobile data 2016 survey →

The complete survey can be found at www.kpmg.cz.

For which activities do you use the mobile internet?

How has the use of mobile internet changed the users’ habits and behaviour?

↓

15 — telco

True

Untrue

Neither true nor untrue

Communication (e-mail, WhatsApp, Messenger etc.)

� I read the news and updates more often

79,8%

71,0%

Obtaining information (news, messages etc.)

� I most often use the phone’s navigation

76,6%

63,2%

Internet browsing/searching

� I consult weather forecasts more often

75,6%

64,3%

Maps/navigation

� Travelling has become more pleasant for me

75,3%

61,3%

Social networks (Facebook, Instagram etc.)

� I rely more on the immediate availability of data and plan less

66,5%

51%

Entertainment (games etc.)

� I manage my finances over my mobile phone

36,5%

30,7%

Finance management

� I listen to music available on the internet more often

34,7%

30,0%

Watching videos

� I devote more time to self-study

31,2%

34,5%

Online purchases

� I watch less TV and more videos on my mobile phone

29,9%

19,5% 21,6% 58,9% � I more easily make new friends and meet new partners with my mobile phone

Listening to music 29,8%

17,5%

17,4%

17,8%

23,7%

25,8%

17,4%

11,5%

19,4%

17,9%

15%

23,2%

51,9%

23,7%

35,1%

46,3%

30,4%

17,0% 28,1% 54,9% � I get together with my friends less but we communicate more online 16,1%

28,7%

55,2%

� I am more willing to pay for video content 7%

13,5%

79,5%

London, Paris or Berlin? Irrespective of which of these European cities you are heading to this autumn, we would like to give you some tips for cultural events worth visiting. Are you staying in the Czech Republic instead? Don´t fret. Prague will be hosting some of the world’s top musicians, let us name the London Symphony Orchestra among all. →

Marwick Revue

1 Georgia O'Keeffe London ǫǫTate Modern ǫǫuntil 30 October 2016 The abstract painter Georgia Totto O'Keeffe is a true American icon – sometimes called the “mother of American modernism,” she is the most expensive women artist in the world.

2 Ninth Berlin Biennale Berlin ǫǫBerlin (several exhibition venues) ǫǫuntil 18 September 2016 The ninth year of the Berlin Biennale, one of the most prestigious artistic events in the world, has this year been prepared by the DIS studio from New York. Its chief motif is the fascination with internet culture and its impact on every-day life.

3 DADA Africa Berlin ǫǫBerlinische Galerie, Museum of Modern Art ǫǫuntil 11 November 2016 Berlinische Galerie is celebrating the 100th anniversary of the Dada artistic movement. The exhibition shows how the Dadaists were inspired by the aesthetics of exotic African art.

4 The Dvořák Prague Music Festival Prague ǫǫRudolfinum ǫǫfrom 5 September to 24 September One of the major events of the festival will be the concert of the London Symphony Orchestra with cellist Jiří Bárta, held on 8 September. The evening’s programme features Dvořák’s Concerto for Violoncello and Orchestra in B minor, Op. 104, B. 191.

Text: Anna Batistová

5 The Intimate World of Josef Sudek Paris ǫǫThe Jeu de Paume Arts Center ǫǫuntil 25 September 2016 The exhibition features a selection of 130 photographs profiling Josef Sudek’s life work. It is the first foreign exhibition of the Czech photographer of this extent. In October, the exhibition of Josef Sudek’s works will move to the National Gallery of Canada in Ottawa. 6 Beethoven Festival Bonn ǫǫBeethovenhalle ǫǫfrom 9 September to 9 October 2016 The highly appraised festival of classical music will be opened on 9 September by the Czech Philharmonic conducted by Jiří Bělohlávek in the Beethovenhalle. The concert’s programme will include the works of Antonín Dvořák, Wolfgang Amadeus Mozart and György Ligeti. © 2016 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

16 — marwick revue

European scene

Marwick recommends

Marwick Revue

1 Dešťová hůl (Rainstick) Literature ǫǫJiří Hájíček In October, the Host publishing house will publish the new novel of successful Czech author Jiří Hájíček. The novel Dešťová hůl (Rainstick) tells a strong story where an important role has been assigned to lots of land and arguments concerning their ownership.

3 Skeleton Tree Music ǫǫNick Cave and the Bad Seeds On 9 September, Australia-born musician Nick Cave is releasing a new studio album named Skeleton Tree. The album will be accompanied by a documentary film with 3D scenes which Nick Cave’s alternative rock band shot as an addition to the album.

4 Three Sisters Theatre ǫǫStavovské divadlo (The Estates Theatre), directed by: Daniel Špinar On 8 September and 9 September, Anton Chekhov’s play Three Sisters directed by Daniel Špinar will premiere at Stavovské divadlo, starring Radúz Mácha, Magdaléna Borová, Tereza Vilišová, Jana Pidrmanová, and Jana Stryková.

5 Designblok Exhibition ǫǫPrague Design and Fashion Week Designblok, the largest selective show of design and fashion in Central Europe, will be held this year from 27 October to 31 October at several exhibition venues in Prague. Every year, the exhibition attracts more than 50,000 visitors.

6 Red Bull Flying Bach Dance ǫǫFlying Steps The performance of the Flying Steps features the non-traditional combination of breakdance and classical music, as it visualises several passages of Johann Sebastian Bach’s The Well-Tempered Clavier. You can see it on 23 September and 24 September in Prague and on 1 October in Ostrava.

Text: Anna Batistová

17 — marwick revue

2 Café Society Film ǫǫDirector: Woody Allen On 22 September, Woody Allen’s new feature film will be released in Czech cinemas. The story from Hollywood of the 1930s stars e.g. Kristen Stewart, Blake Lively, and Jesse Eisenberg.

Marwick Revue

18 — marwick revue

Design news

1 27th Brno Biennial

Text: Ondřej Krynek, editor-in-chief of DesignMagazin.cz

Until 30 October 2016, you can visit the 27th Brno Biennial, a traditional and renowned international biennale of graphic design in the Moravian Gallery in Brno. In addition to the international show, this extensive event also includes several accompanying exhibitions dedicated e.g. to the work of Zdeněk Ziegler and collective work consisting of curators’ collections.

Design by Zaha Hadid

The area around Masaryk station in Prague is going to change. The currently undeveloped land will undergo an extensive revitalisation until 2023. Several multi-purpose objects will be built under the collective name Central Business District. An imaginary golden tower will become the main dominant feature. The urban planning, architectural planning and interiors were designed by architect and designer Zaha Hadid before her recent death and feature her favourite liquid design.

3 Retro of the 1970s and 1980s An exhibition simply titled Retro of the 1970s and 1980s will be held in the modern building of the Dancing House in Prague (Tančící dům) through 16 October. Visitors will get to see significant and symbolic items from this Czechoslovak era, including a fully equipped improvised flat, a refreshments shop with customer seating, period games and fashion, a Škoda Rapid car and a Jawa motorcycle.

TOP 3 new restaurants

Marwick Revue

1 First naked restaurant

3 A poetic bar

2 Manipulating MaSa

Interior The interior of the Žlutá ponorka (Yellow Submarine) bar located in a 19th century building is dominated by books. Some armchairs feature portraits of writers and tables and walls have been decorated with quotes from novels. Some walls are covered by pasted pages from books. The bar has therefore been nicknamed a “poetic cocktail bar”.

The Bunyadi restaurant located in London features the unique concept of a naked restaurant. Upon entering the bar, guests can have a drink while still dressed. After entering the dining section, it is recommended that they remove their clothes (however, this is not required). “We want our customers to get the opportunity to enjoy one evening without any additions: no chemicals, no electricity, no phone or mobile phone, and even no clothes if they want,” Seb Lyall, the founder of the restaurant, explains the basic idea. The menu is dominated by vegan dishes served on hand-made earthen plates. A five-course menu costs approximately GBP 60 (approx. CZK 2,000). London’s pop-up restaurant The Bunyadi will be open only for three months in the summer and in autumn is expected to move to Paris.

So far, three Prague restaurants can pride themselves with a Michelin star awarded to the world’s best restaurants. Another restaurant might soon join the club - MaSa by Hervé Rodriguéz located in Prague’s Old Town. The renowned French cook is behind its concept. He already has one Michelin star from his native Paris. At home, he has gained the nickname “Manipulateur de Saveurs”, i.e. manipulator of tastes for his distinctive style. You can expect virtually anything when you choose, e.g., the triplex chicken/ink/oyster or a cauliflower cappuccino. The basic set menu consisting of six courses costs CZK 1,200 per person.

The Žlutá ponorka (Yellow Submarine) bar is not an unknown venue in Česke Budějovice. It has been a steady feature for 16 years already. In 2000, the Submarine first anchored on the ground floor of one of the local prefab houses, but this year it dropped its anchor in a classicistic building situated in the city centre and finally features a kitchen. A total of 140 seats either in the main part or in two lounges await guests. The entire Submarine bar is a non-smoking venue. While enjoying your drink make sure to take a look at the menu with its selection wof international cuisine.

How about a drink? Hemingway Special - Havana Club Añejo Especial, Maraschino, lime juice, grapefruit juice.

MaSa on MaSa What makes Prague’s MaSa restaurant unique? “A provocative interior and extravagant food accompanied by high-quality service. We want to use and combine the best ingredients from all over the world and add something entertaining on top without depriving food of its basic taste.“ Do you want to gain a Michelin star? “Hervé Rodriguéz would naturally want to get another Michelin star also for this restaurant but our priority is a restaurant full of satisfied diners.“ Barbora Cihlářová, MaSa restaurant manager ² MaSa wants to attract customers also with its interior design. © 2016 KPMG Česká republika, s.r.o., a Czech limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Text: Lukáš Rozmajzl, editor-in-chief of CityBee.cz

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² From the menu of the new Prague restaurant MaSa.

Marwick Revue

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KPMG autumn events

KPMG Tax and Legal Forum →

21. 11. ↓

29. 11. ↓

7. 12. ↓

Praha, Forum Karlín

Olomouc, Clarion Congress Hotel

České Budějovice, Clarion Congress Hotel

Participants may look forward to both KPMG professionals and external speakers who are going to present on tax and legislative changes under preparation. For more KPMG events look at our web site www.kpmg‑eventy.cz.

Marwick Revue

“Samuel,” she said. “It must be almost fifty years.“ She’d done her homework. Get your story by heart. Make sure it’s consistent. Make sure you don’t have to think about your replies. But don’t be too accurate. Being too accurate is suspicious. “Fifty-one,“ I said. We kissed, on both cheeks.

The British author Simon Mawer has become one of Czech market’s bestselling authors. Besides being a great storyteller, he has a close relationship to the Czech Republic – also in his books. He won over the Czechs with his novel The Glass Room (2009) which for the most part tells the fictional story of Brno’s Villa Tugendhat. This year, the publishing house Kniha Zlín published his recent book Tightrope (Provazochodkyně). You can read it as a historic thriller, a psychological drama or a love story. Tightrope is the sequel to Mawer’s previous novel The Girl Who Fell from the Sky (2012). However, you can read Tightrope without having read its predecessor, as the books are actually only connected through the main character of Marian Sutro, a British spy operating as a liaison in occupied France during World War II until someone betrays her. In Tightrope we meet an emaciated Marian gutted by the war who survived the horrors of a concentration camp. However, it does not take her long to shrug off the negative memories and under the threat of a new war she again gets involved in the complicated games of intelligence services. Although she lives a life of two and sometimes three identities, she almost falls into a trap due to her passionate love for a KGB agent. In his new novel Tightrope Simon Mawer has once again confirmed that he is able to write a good novel with all the necessary features: a strong story, tension, and a complicated love story.

“Simon Mawer’s books sell better in the Czech Republic than elsewhere in the world,” says the publisher. How did you succeed in obtaining the rights to publish the Czech translations of Simon Mawer’s books? I think that many Czech publishing houses must have been interested in such a successful author… Yes, they were, but I was probably faster. I got offered The Glass Room by the agency which was representing Simon Mawer at the London book fair and did not hesitate for a minute, as the book was already on the shortlist of the Man Booker Prize. Simon Mawer’s works have been successful both in Europe and the U.S. Could you compare how his books sell in the world and in the Czech Republic? I think that his books probably sell best in the Czech Republic. They partially concern the Czech Republic and our readers like books which describe our country from a bird’s eye view, as, e.g., the successful Gottland novel. Which of Simon Mawer’s books has sold best? How many copies have you already sold? By far the best-selling (and best-reviewed) book by Simon Mawer is The Glass Room telling the story of Villa Tugendhat in Brno. We’ve sold approximately 50,000 copies of this book. How important is Simon Mawer for your publishing house? He is our second best-selling author, right after Jo Nesbø. Marek Turňa, Kniha Zlín publishing house

Text: Anna Batistová

Simon Mawer: Provazochodkyně (Tightrope) Transl. into Czech by: Filip Hanzlík, published by Kniha Zlín, Zlín, 2016, 468 pages

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FOCUS: Simon Mawer

Why we play games

Text: Petr Pouchlý (Court of Moravia), Martin Jedlička, illustration: Barbora Tögel

↓ Games wherever you go Playing games is part of our lives from early childhood, as the most natural way of learning. By playing, we explore the world. We repeat words, play shop, cops and robbers, doctor. Simple gaming principles stay with us at school, too: collecting points and converting them to grades is a typical example of a gaming principle applied in a serious environment. But then the day comes when we feel we are too grown-up to play – it is not respectable enough, and we start to see it as inappropriate. However, it’s in fact perfectly normal for adults to play – but with increasing age, their games look different. Chess and golf are seen as ‘noble’ games; board games are commonly played in the parks of many cities of Western Europe; cards or darts are common in Czech pubs. Playful principles and experimental exploration through play are replaced by games where the rules are fixed and the winners clear. Spontaneous playfulness is something we are slightly embarrassed by as we prefer to act respectably. Finally, all key elements of play are reflected in sex, but this is not a topic most of us would be willing to share on. Game mechanics and some habits we gain through gaming stay with us even in different contexts. Usually, this does not involve a complex game but activities that appeal to our gaming habit. Loyalty programmes are a typical example: collecting points at a petrol station for gifts or stamps at your favourite restaurant to get the tenth lunch free are examples of gaming principles applied in day-to-day life. In this light, chasing Pokémons is not quite as extravagant as it may seem at first sight. It is just another game, attracting a younger audience and seeping into the real, non-gaming world. However, is it not the first pervasive game, i.e. a game crossing rules and entering the real world, by far – more mature gamers have been enjoying geocaching for years.

What elements are strong in gaming? ǫǫDesire to win: We naturally want to beat someone, to show that we are better or can surpass ourselves. Typical examples are wrestling, positional board games, quiz games. ǫǫDesire to take chances: Chance is something we cannot influence, but at the same time, we want to control our world. This is the embodiment of fate that we are trying to conquer, time and again. Simultaneously, it offers an easy way to justify why we failed at something. Games that involve an element of chance – typically card games – are far more popular than those that do not. ǫǫDesire for spontaneity: Games allow us to take off our social masks and give in to adrenalin and light-headedness – and to concentrate on the game itself. This concerns activities such as rollercoaster rides, dancing and physically challenging sports. ǫǫImitation: From childhood on, we want to be like our idols, whether they are supermodels (we dress like them), or Rocky Balboa and his American dream (he makes us work out hard). But being a hero usually hurts – therefore we prefer to live out their stories in our fantasy, through a play, a film, or a digital game. The magic circle: where games end and the world begins Usually, games have rules that we understand and that remain unchanged throughout their duration — unlike real-life rules that nobody really knows and which are hard to understand, with the truth hardly ever being black or white. Games are defined by a ‘magic circle’ limited by rules, space and time. It is clear to us what still is a game and what not. We are naturally able to distinguish between the state of a game and a state outside of a game. Like most animals capable of play, when watching our young fight, we

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Over a summer that saw the meteoric rise of the Pokémon GO mobile phone game, a topic seemingly reserved for children has come into the adult world: gaming. All of a sudden, a whole generation of millennials - grown-ups from the outside - were playing. Perhaps you’ve been wondering what on earth could possibly make an adult person pick up a mobile phone and spend hours chasing virtual monsters? The answer is hidden deep in the human mind. And you would be surprised just how much we play in real life, although not exactly catching Pokémons: gaming principles are frequently found in everyday life and, when employed properly, they can even help your business.

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can intuitively tell whether they are engaging in a harmless game or an all-out fight to the death. Differentiating between an activity taking place within a game and outside of it is a key element, as while playing it gives us the freedom to make decisions that we could never make in reality. In real life, we would be chastised for trying out different roles and stances, while in a game we may be praised for them. And at the same time, such experience is real, and we can learn from it. As an example, let’s take a decision made in a game that is selfish and authoritarian but leads to an interesting twist. When you send thousands of soldiers, even imaginary ones, to their deaths and realise the consequences of your decision, something changes. And, at the same time, your fellow players know that you were just playing, not hurting them personally. Take American wrestling or action movies, where you also know it is just a show and fiction, not a real fight where people get hurt. What do people need to enjoy games? ǫǫParticipation and influencing the outcome – be the agent, take part in decision-making and shape the story. ǫǫFair rules – unlike in the real world, in a game you play by rules that are the same for all, and violating them is taboo. ǫǫA level playing field – it is important to know what is happening and to see how extensive the game is and how long it will take. ǫǫAlternating strategy with tactics – we know the overall goal of the game and have to choose a long-term strategy, which we then have to combine with tactical decisions, the effects of which we may see later. ǫǫComprehensible communication framework – in the game, certain terms mean the same thing to everyone, hence it is easy to understand each other. ǫǫConnecting with the story – we simply have different tastes; either we like the given framework or not.

ǫǫFreedom to make mistakes – while in real life mistakes may have fatal consequences, in the game we can try again and learn. Using games for business If people are willing to spend hours making up gaming strategies, trying various options, learning from mistakes, working hard to improve, and generally engaging in the game, how can this be used for developing real business? Gamification deals with how to take a certain principle that resonates with our self and use it outside the game environment. By combining behavioural psychology emanating from the playing behaviour of gamers with design thinking, services, products and mechanics are developed which encourage engagement (the target group’s involvement in the activities connected with the brand) and loyalty (repeated contact with the brand and forming a positive habit) above all. The target groups are usually customers or employees. In marketing, sales or service design, simple principles usually work quite well, as the aim is most often a time-limited campaign. After all, various loyalty programmes, contests and collecting events have been common practice in this segment since the ’70s. Aspects of exploring, completing and the feeling of ‘beating the system or the odds’ work well here. As a rule, they are targeted at individuals. Using gaming principles in process management, employee training, building up team performance or efficient communication and collaboration across organisations is much more challenging. Simple gaming elements that work well for short-term customer campaigns are not sufficient as it becomes necessary to also incorporate story principles, a wider strategy and rules into the design. Long-term feasibility and, primarily, the formation of positive habits become more important than an impressive finish, an element of surprise or emotional anchoring. Experienced designers thus move from simple gamification to playful design: not just employing individual game principles in a non-game context but, in a sort of reversal, involving common principles in a game context. A paraphrase of Comenius comes to mind here: ‘work by play’. Of course, this playful design concept may be hard to imagine for older generations – for the above reasons, they may well feel that gaming is not a respectable option for them. Besides, often there is no need to build up their engagement and motivation through connecting to a firm’s story – they have probably long ago found their own valid reason why they are great at doing their jobs. In contrast, members of generations Y and Z, who currently account for 40% of all employees, have not yet developed strong habits, often do not see the wider picture and have no clear ideas of their work life, while, at the same time, they have grown up playing games, so gaming principles are inherent to them, and they often play at even an adult age. For this target group, getting an understanding of their organisation, the work processes and possible career paths with the help of a board or digital game makes the journey towards finding work happiness and purpose significantly more efficient. Through simulation games and experiments, new employees can gain the confidence they lack, safely earn practical experience, and, at the same time, strengthen their relationship with the employer’s brand. Playful design projects all aspects that make players enjoy gaming into their daily work drill in an attractive and catchy way. �

Gamification translates what people like most about gaming into the corporate environment. It employs game elements and, while not being a full-fledged game, can improve people’s efficiency, make use of their potential and help them enjoy their work more, hence helping a company beat its competitors in the game of the best players on the job market. →

1. Recruitment campaigns

2. Assessment centre

3. Team performance

↓

Your company’s recruitment campaign will be your future colleagues’ first encounter with your firm. If set-up well, if will make your firm more attractive, while also making your selection of suitable candidates easier. Ideally, it will engage the attention of the right target group and examine the job applicants’ suitability even before they come to an interview –saving you time.

Choosing the right people is a challenge, especially since the outcome will affect the expenses and the performance of the team that will have to take the newcomer into their midst. Gamification will make an assessment centre’s results clearer, easier to read and will simplify communication with applicants. It will also encourage competitiveness among participants and give them an idea of the given corporate culture. �

A team that doesn’t bring in results is of no use to a firm. For sales and customer support in particular, performance is so crucial that competing to be the best team becomes a job’s core. Joint success affects the entire firm’s revenues. Gamification enhances cooperation within the team, encourages competition among teams and is fun –giving you a competitive edge in the junior job market.

What form can it take? Revelian developed a series of games named Theme Park Hero. Short games test exactly the skills that the firm needs from a newcomer: analytical thinking, quickness, attention. The applicants get prompt feedback on how they are doing. The firm in turn receives all data about the applicants’ results in digital form. The games work similarly to traditional psychometric test, but are way more attractive.

What form can it take? An app titled Fantasy Sales Team takes advantage of the parallels between sales and sport teams. Teams may choose from a variety of topics. By bringing in new business, players increase their score in the match. The desire to beat the other teams encourages team performance. Rather than seeing junior colleagues as rivals, more experienced players become much more willing to train them.

� What form can it take? Kentico wanted to reach out to IT students in Brno and attract them to their newly opened corporate premises. A microsite featuring a test app first enticed students to find out “How big a geek are you?” and was followed up by a pervasive game at the firm’s premises involving an actor, darkroom projections and a thrilling atmosphere. While 150 people participated, nearly 100 reached the finish. Plus, as a bonus, the game itself attracted media coverage.

�

24 — gamification

Gamification at work

4. Internal online systems

5. Day-to-day office life

6. Creating team effectiveness

7. Training through play

↓

Employees’ daily performance is often significantly influenced by the tools that they work with. This also holds true for digital tools – internal systems, CMS, SRM, databases, etc. Gamification increases employees’ productivity, clarifies the virtual environment in which your people work on daily basis, and makes tasking and follow-up easier.

A firm expects full commitment, good work and continuously improving results from its employees. To deliver, people need a supporting and motivating environment. Well managed gamification will make the work environment more attractive and inspiring, with people feeling good and working better, focusing attention on important tasks and not procrastinating.

Alive-and-well team spirit and respect among colleagues are vital for successful companies. Gamification can motivate employees to collaborate and help each other. It enhances corporate team identity and, by applying behavioural psychology, changes engrained behaviours.

If your managers have already been through so many traditional trainings that they’d rather not go to another one, you may want to consider enrolling them a communication skills course in the form of a game. Having to deal with conflict situation within a story providing the cover of a role improves skills and prepares for solving real situations much better than dull theory on PowerPoint presentations.

�

What form can it take? The Zurmo CRM system has a gamified part. Users collect points for their activity in the system and gain virtual objects as a reward. A simple mechanism of rewarding and rating the most active users actually works for most users, and increases their activity in the system.

What form can it take? Officevibe is a simple gamified application that measures the happiness of employees at work. Once in a while asking simple questions, it monthly requires less than 5 minutes of the employees’ time. Answers are collected, assessed and sent to HR to provide quick feedback.

What form can it take? An example is the Škool project, which aims to nurture new game designers. In an online environment, it offers Stackoverflow, a forum for programmers. An important difference compared to other social applications or mechanisms is that the users gain points and rewards for collaborative work.

What form can it take? Court of Moravia organises unconventional training for managers through role play: participants play fictitious characters and solve presented situations. For example, one game puts participants aboard a submarine, where teams practice handling critical situations, making decisions and negotiating when faced with the conflicting intentions of individual team members. The game is followed by training to reflect on and anchor the experiences gained.

Illustration: Barbora Tögel

25 — gamification

The battle for talent has moved to social media

Text: Michaela Raková

The younger generation’s weaker birth rates and an employment market saturated with job offers pose significant challenges to today’s graduate recruitment professionals. Whereas in the past it would have sufficed to post interesting openings onto a company’s web pages and its HR office would have been flooded with applications and CVs, today’s graduates appear to be much more hesitant and selective. But maybe this is only an expression of firms not having learned how to properly communicate with younger generations. “When choosing their future employer, Czech students are looking for a friendly environment which at the same time is creative and dynamic. It hence is important to know what content companies should be communicating to them. Today, the trend goes towards showing businesses from the inside, for example with the help of multimedia content. Job candidates hence get the opportunity to find out whether a company fulfils their requirements and if they will feel comfortable there. All this even before they apply for a job,” says Tomáš Rašner, country manager for Universum in the Czech Republic. Universum organises surveys of students’ career preferences world-wide. Uninvited guests? Most recent surveys of the students’ interaction with potential employers show that firms would do well in contacting graduates through the online environment, as it is so familiar to them. The students’ first encounter with companies is indeed of a digital nature, as students look for initial information about a company on their potential employers’ webpages. However, is it appropriate for companies to infiltrate the social media environment, which for a relatively long time has been reserved for entertainment and peer-to-peer communication? Will one end up feeling like the unloved uncle who uninvitedly shows up at a kid’s birthday party? Surveys show that such fears are largely unfounded – 57% of all Czech university students admit to looking for information about potential employers on social media and more than a third believes that employers should be investing more time, money and effort on the web. According to Rašner, “It is useful to combine several social networks, e.g., Facebook, LinkedIn, Instagram or even YouTube to deliver content that

applicants are looking for and that they want. Czech students are most often looking for information on job offers, how it is to work for a particular employer, or how certain firms recruit their newcomers.” Forget banners What form of presentation is most suitable for the internet? Classic advertising formats will no longer blow away young generations, even in a digital environment. Instead of banners or regular job adverts, companies are coming up with more creative ideas. Content marketing is coming to the forefront. In surveys, students reveal that they most often look for interviews with a company’s employees or videos. “When I was looking for a job, what caught my attention was the modern design and the visual presentation of job openings through photos and videos, which helped me find what I was looking for,” says 23-year-old Barbora, who recently joined a digital agency as a front-end developer. “I wasn’t just looking for a job, but for a young team and a pleasant creative environment where I would fit in. So far, I’ve been with the company for six months and I definitely made the right choice,” she adds. Digital transformation, affecting all industries and significantly changing the business environment, hugely influences all corporate areas, including the recruitment and retention of young talents.

26 — generation XYZ

It will surprise no one that Czech university students feel very much at home on the internet. Over 94% of them spend several hours online every day. Apart from looking for entertainment and socialising with friends, students have also begun to seek out information about potential future employers through digital channels. ↓

Where do university students look for information on potential employers? An employer’s webpages 66 % Social media 57 % Employment portals 49 % Career webs 46 % Student magazines 39 %

27 — generation XYZ

Employer presentations at the university 34 %

How many minutes do university students spend within a given social network/community during each visit? Facebook – 41 minutes

YouTube – 40 minutes

LinkedIn – 13 minutes

Source:

Communication with Talents survey on a sample of 1 600 respondents among Czech university students, conducted by Universum in cooperation with Studenta Media in the academic year 2015/2016.

28 — CSR

Text: Richard Valoušek, photo: Tomáš Hercog

Siemens is restarting the lives of homeless people. And successfully so far.

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One example for all – we could say at the beginning of our story. Monika’s is full of emotions, disappointment, joy, sadness and happiness. The same unpredictable sequence was reflected in her life. At least until she entered the Restart@Siemens programme. “Since then I have been living as if I were on a cloud,” says 31-year-old Monika with a smile. ↓

We enter a meeting room in the Siemens manufacturing plant on the suburbs of the Eastern Bohemian city of Trutnov. On the walls we can see posters of successful programmes the company is proud of having commenced, employees’ pictures and surroundings of their registered office. It’s slightly cloudy behind the window and there is a strong wind; only the diehard smokers are standing outside. Others are busy starting their working day at their desks. �

month relationship with my then-boyfriend. The initially idyllic relationship was replaced by jealousy, reproaches, quarrels. We were living with his mum, so it wasn’t easy,” as if she is trying to justify the situation at that time and the fact that she had been overlooking it for such a long time. After several trying years she found the courage to leave and moved to a shelter with her son. “I grew up here in Eastern Bohemia and all of a sudden I ended up in Moravia. I wanted to be as far as possible from my ex. It was easier for us that way,” she explains. When she thinks back to the sadder part of her life, her narration becomes slower, quieter, as if she doesn’t want to say anything inappropriate. After a moment of silence she continues. “It wasn’t easy, I was suffering and sometimes I got scared. But it was time for me and my son to leave,” she adds more energetically, maybe to emphasise how hard it was for her to find the courage.

30 — CSR

Ms Monika enters just a short while later. She is wearing a white protective coat, her hair is tied back in a ponytail and she is smiling. She looks content, only slightly nervous. She is shy, not used to talking to journalists. She sits on my left, lays her hands on the table and says towards our photographer: “I don’t know if I am the right person to have my picture taken.” She has no reason to say this; she looks stylish despite her work wear. We sent her a list of questions in advance – that is how we tried to allay her nervousness at least a little. It’s worked in a way. After a while the barrier falls aside, the prepared questions remain on paper and a spontaneous recounting of this modest lady’s life story begins at the table. “I’ve always dreamed of a family, a nice apartment and a good job,” she begins. “When I look at my life now, I’ve got it,” a sincere smile spreads on her face. However, let’s start at the beginning – she has not always been this close to satisfaction. “It all started after a few-

Ing. Eduard Palíšek, Ph.D., MBA, CEO of Siemens Czech Republic: “Comprehensive individual and long-term help for people without a home makes sense, as it is the only way to get them back into everyday life. Many people without a home have the will and motivation to change their difficult life situation, but without long-term financial, advisory and social help, they have no chance to succeed. We are all able to enjoy our own achievements, but the Restart@Siemens programme gives us the opportunity to enjoy the everyday progress of those who have already been on the verge of losing faith and hope in their own success. And this reward can’t be expressed in numbers.”

31 — CSR

Mgr. Michaela Marksová, the Minister of Labour and Social Affairs: “The Restart@Siemens project shows that, in short, where there is a will there is a way. Not only in terms of the working cooperation of private and public spheres, and in this particular case cooperation that aids others, but primarily in terms of somebody getting caught in a crisis life situation, getting a chance and deciding to take it, they can really succeed it with the help of others.”

Monika’s life changed in the shelter “Suddenly, we were living with my son just one for another. No one was limiting us, we quickly got used to the rules in the shelter and I started looking for a job,” she describes the start of her life without a boyfriend. “I responded to about twenty advertisements, visited several places, with no luck. However, I never stopped hoping,” she says with a sparkle in her eye. In fact, everything was about to change soon. “I can still remember the moment when a social worker came to me and asked whether I would like to try entering Siemens’ Restart programme. I didn’t know what I was getting into, but I really wanted to give it a try. My son and I were both delighted.” Monika was a suitable applicant, with no criminal record, determined to do something with her life and she was very enthusiastic. That’s why she was hired. “When choosing where in Siemens I would start working, I picked Trutnov. I grew up near here and I wanted to return home.” Siemens signed a one-year contract with her. It also included rent payments. “The contract recently expired and I was nervous what would come next. When they offered to prolong the contract, it felt like Christmas for us,” she says with a laugh. “I got a pay rise, so I can pay the apartment myself now.”

And what does her eleven-year-old son think about it? “He is happy and this makes me happy, too. He has his own life, he has found a lot of friends and he is always running around somewhere. Although he has a slight handicap, that’s why he is two grades below his age-group, but he likes it. We try to study at home. Even though it’s often hard work, it’s fun,” the head of the little family describes the way her household works. She got used to living in her home region very quickly. “I have even found a friend among my colleagues. We spend a lot of time together,” she continues enthusiastically, not forgetting to mention a new boyfriend. “He is from Hradec Králové, but we are not planning to move in together just yet. We are satisfied with where we are.”

An important player in the Czech economy, Siemens has a 125year tradition in the Czech Republic and employs nine thousand people. Over a year ago, the company decided to establish the Restart programme, helping people without a home. Mariana Kellerová, CSR manager at Siemens, describes the reasons for this decision and the development of the programme so far: Why did you decide to give this project a try? We perceive poverty leading to homelessness as an acute problem of contemporary society. As a socially responsible company, we felt that it was our moral duty to get involved in searching for a solution. Hence, we came up with the Restart@ Siemens programme and we have been running the programme together with the Salvation Army, Caritas Czech Republic and NADĚJE since 2015. How do you pick suitable candidates? Their motivation and determination to start over again is the most important factor. They all have been through a complicated period and based on our experience, we know that when they are returning to their ordinary lives, they are at the end of their tether. Do they have stricter rules than others? The participants of the Restart@Siemens programme have the same rights and duties as any other employees and they are

also entitled to the same benefits. We expect that they will be reliable in their work, cooperate with their social workers and resolve their past commitments. Have you had to terminate cooperation with someone from the programme yet? So far, we were able to offer participation in the programme to ten homeless people. Six of them accepted the offer; unfortunately, two had to call off their participation in the programme due to health reasons. Two of the first participants have recently completed the programme and both have been offered long-term employment. They have been trained, they are working on their personal situation and they are beneficial for their teams. Is cooperation with them more difficult than with other employees? It’s impossible to generalise; the Restart@Siemens programme is based on a personal approach. People without a home are really not different from others, they only need help in areas where most of us can manage. Their effort, determination and will to change things serve as a tremendous motivation for their colleagues. Your goal is to help integrate up to 20 employees in this manner by the end of the year; do you think you will be successful? And what are your future prospects? We’re currently still looking for suitable participants. We are ready to employ people in our plants, in the shared services centres and business organisations. We have gained experience which will help us in further programme stages and also we would be happy to share them with others who would like to help the homeless. We have proven that long-term, individual and targeted help makes sense and it can completely change human fate.

32 — CSR

Siemens: We want to solve the problems of Czech society

33 — CSR

About the Restart@Siemens programme In cooperation with partner non-profit organisations, Siemens selects individuals who have lost their home due to no fault of their own and who have the best preconditions to return to regular life. In line with their abilities, knowledge and experience, Siemens offers oneyear employment contracts for work positions in manufacturing plants and sales units to them. If the individuals selected for the programme do well, at the end of the year they are asked to continue working for Siemens.

Text: Lada Brůnová, Eva Samšuková

34 — science

Modern patrons

35 — science

The essence of patronage was in principle defined by G. C. Maecenas, an advisor to Emperor of Rome Augustus, in the first century BC. The term denotes the provision of selfless support to artists and scientists. Contemporary entrepreneurs have again returned to this concept and patronage worldwide is undergoing a renaissance, also in the Czech business environment. The Neuron Fund for Support of Science is most active in the field of science, providing support to promising Czech scientists while using the funds of ten patrons. ↓ Among the patrons of the fund are Karel Janeček, Libor Winkler, Dalibor Dědek, Martin Ducháček and others. The number of patrons is growing as successful entrepreneurs are increasingly often realising how important it is to support science that moves human civilisation forward. Science support rendered by the state is insufficient; that is why those with a personal attachment to science have decided to strengthen its position. The Czech Republic does not have a competent governmental body able to distribute public funds for science and research appropriately, resulting in the inconsistency and instability of financing. Hence, patrons have decided to grant support to young scientists once a year without any unnecessary bureaucracy, using a simple online application. After assessing each individual candidate, a council of first-rate Czech scientists allocates funds to the best ones, mainly selecting projects focusing on basic research (and applied research in medicine). Basic research often suffers from a lack of funds as research results are often uncertain with the risk of ending up at a dead end. The Neuron patrons are aware of this and provide funds in an entirely altruistic manner. “The Neuron Fund’s mission is to become a prestigious platform that supports Czech science from private resources without any demand for profit,” says Monika Vondráková, who along with Karel Janeček and Josef Veselka came up with the idea to support young Czech scientists. Together, they established the Neuron Fund for Support of Science and Ms Vondráková currently serves as the chair of the board of trustees. “The Neuron patrons share the conviction that Czech scientists have a very good reputation abroad and therefore deserve the public’s attention and support. That is why they wish to give praise to those who devote their lives to science, knowing that this is a demanding job without any high earnings,” adds Ms Vondráková.

G. C. Maecenas Cilnius Maecenas, a friend and an advisor to Roman Emperor Augustus Gaius, lived in the first century BC. He served as a quasi-minister of culture to the emperor and as a patron for a generation of young and talented poets such as Virgil and Horace, thus giving rise to the concept of patronage.

Famous world patrons Patronage is becoming a worldwide trend, as seen for instance in the Breakthrough Prize, backed by the most successful businessmen and investors on the planet, such as Jurij Milner, the director of Apple Arthur Levinson; Mark Zuckerberg, the founder of Facebook; or Sergej Brin, the founder of Google. Other personalities providing long-term support to science also include Bill Gates who via his Gates Foundation has donated USD 10 billion to fight tuberculosis, poliomyelitis and malaria. Another businessman who has decided to support science is Lawrence Ellison, the co-founder of Oracle, who has donated almost USD 500 million to geriatric disease research via the Ellison Medical Foundation. The history of Czech philanthropy Famous personalities who supported arts and science in the Czech lands included, for example, Rudolf II, Přemysl Otakar II or Charles IV. At the beginning of the 20th century, in 1904, Czech architect Josef Hlávka made history by establishing a foundation supporting arts and talents. His patronage became famous through a detailed and elaborate programme focusing on the Czech nation’s culture and education. His financial involvement played a decisive role in the establishment of the Czech Academy of Sciences. He further initiated the construction of a new building for the Academy of Fine Arts and also helped to set up the Hlávka Dormitory to ease the hardship of poor students who couldn’t afford accommodation in Prague. He provided support to three and a half thousand university students and thus stood at the birth of the Czech intellectual elite and its assertion within Czech society. It was Mr Hlávka who inspired the founders of Neuron to establish a fund for the support of science.

Patrons of science

Karel Janeček

Dalibor Dědek

Libor Winkler

Martin Ducháček

↓

The fund’s patrons support scientific projects to which they have a personal attachment. Karel Janeček, businessman and founder of RSJ, has a particularly strong affinity for mathematics. “People who have achieved something and are successful should think about the meaning of our lives and about the basic principles underlying the development of our society. I believe that the responsibility to think about society’s future and how to help develop it is one of these principles,” says he. “I am convinced that science, research and knowledge are the most important parts of our human mission.”

Dalibor Dědek was so enthusiastic about the fund’s activities that he was among the first to follow Karel Janeček’s example. The owner of Jablotron, with hundreds of thousands of customers around the whole world, supports top Czech physicists via the Neuron Fund. It suits him that he can finance them directly. “I find the funding of scientists through complicated cash paths entirely unwise,” says Mr Dědek. “If we want to live in a better world, we shouldn’t wait for somebody to do it for us. It’s important to show the way,“ he adds.

The chairman of the board of directors of RSJ and capital markets specialist started his professional career as a scientist. He joined the Neuron Fund in 2013 and wanted to support young chemists. He is currently also the patron of biology, which is the fund’s new discipline. “I mainly want to increase the motivation of young people to choose a career in science,” Mr Winkler reveals his motivation and adds that he noticed that in the Czech Republic and other advanced economies the interest in technical fields is experiencing a downturn due to the high demands on students and better remuneration in humanities, hence making students’ interest turn to them instead.

The fourth patron is Martin Ducháček, head of algorithmic system development in RSJ. He feels strongly about projects dealing with healthy nutrition, food science and medical research. He sees the biggest problem in the pitiable remuneration paid to Czech scientists who are subsequently forced to leave and go work abroad. He believes that if Czech scientists had better working conditions, they would not leave. “I wish for young talents to stay in the Czech Republic and carry out their research here.”

36 — science

The five most significant patrons of the Neuron Fund and their motives for the support of Czech scientists are presented below.

The Neuron Fund for Support of Science

37 — science

Václav Dejčmar ↓

Václav Dejčmar, businessman and co-owner of RSJ, got excited about the Neuron Expedition project, continuing upon the great era of expeditions by Czech scientists. He believes that scientific expeditions may be of considerable benefit to society. “The word expedition is connected with adventure and mystery, and science should have the same connotations,” he explains. At the same time, he also highly appreciates the Neuron Fund’s objective to increase the popularity of science and Czech scientists among the general public, as it often needlessly is separated from the world of science. “It would be great if young people got inspired and chose a path in top science.”

↓

The Neuron Fund is a non-profit organisation whose mission is to develop a modern concept of patronage for science and research in the Czech Republic. The fund supports scientific projects in biology, physics, chemistry, mathematics, medicine and social sciences via Neuron Impulses. Top scientists are awarded the Neuron Award for Contribution to Science; young scientists receive the Neuron Award for Promising Young Scientists. Scientists are supported not only financially; they also receive help in communicating their research to the public. The fund is devoted to popularising science and carries out all its activities with the aim to increase the prestige of science in Czech society. Become a modern patron and, once you’re done reading Marwick, write to mecenas@nfneuron.cz. The Neuron Fund in numbers 7.

year

Neuron Impulses granted

scientists awarded with the Neuron Award for Promising Young Scientists

scientists awarded with the Neuron Award for Contribution to Science

million donated to support science

Text: Michaela Raková, foto: Barbora Mráčková

“God bless” used to be the traditional brewery greeting with which brew masters tried to ensure that the next batch of beer would be successful – prior to the discovery of yeast, beer brewing results were extremely uncertain. A sign proclaiming the same welcomes you to the Hendrych family brewery in Vrchlabí and despite the advancements in modern beer brewing technologies the brewers haven’t given up this motto just yet. ↓

Even though they had no experience in running a brewery when they got started, the Hendrychs now belong to the most interesting small-scale beer producers in the Czech Republic. In Vrchlabí, near the main road from Prague to Špindlerův Mlýn, they opened a brewery with an annual beer production of two and a half thousand hectolitres. Four basic types of Hendrych beer can now be imbibed in one hundred and thirty restaurants. The opportunity to achieve the planned beer production of ten thousand hectolitres has come about due to a recent change in customer preferences. “I had the idea to establish my own brewery already at university. I wanted to do business in some traditional Czech field. I considered shoes, beer, glass or porcelain,” Vojtěch Hendrych, one of the owners of the brewery bearing the same name, describes his business beginnings. The brewery is co-owned by Hendrych’s father Vladimír, who has invested into the family firm. “It is said that the worst thing is to do business within a family and I can confirm this,” says Hendrych junior jokingly: “We speak about business matters constantly and naturally have different opinions on many things, as we are forty years apart in age. I respect my father for having started the business with me but letting our whole team work independently. He comes up with thoughts and ideas from the outside and I am responsible for operational matters,” adds Vojtěch, describing the division of roles.

Eight-degree beer – the beer of the future “We wanted to brew beer which is full, clean, without any deficiencies and bitter,” Vojtěch describes the characteristics of the beer as he raises the first pint in toast. He says “God bless!” instead of the usual “Cheers!” We immediately notice the distinctive taste and bitterness once we take our first sip. The brewery offers four basic types of beer and supplements them with seasonal specials. “We started the business here with the most popular beer, our eleven-degree lager, which accounts for 60-70% of our production. Then a semi-dark thirteen-degree beer and a top-fermented sixteen-degree ale,” Hendrych describes his assortment. However, his personal dark horse is a bottomfermented eight- degree beer, a luxurious brew with a smaller amount of alcohol. “For me, this is the beer of the future – people will want to drink lighter, but more precisely prepared beers.” At the Hendrych’s, recipes are prepared by a trio made up of the owner, the brewery’s director and naturally the brew master, “the Prague brew master from Petersburg”, as Hendrych, who brought him into the business from distant Russia, teasingly calls him. The family business aims to increase production to eight to ten thousand hectolitres a year. “That is the threshold under which we still will be able to maintain our high quality,” adds Vojtěch. “We would also like to establish our own distribution network, similarly as certain dairies or butchers have today, mainly for reasons of quality control. Our production is not suitable for large retail chains; the beer is unfiltered, nonpasteurised and should be consumed within one month.”

38 — business lifestyle

On founding a brewery

39 — business lifestyle

2009 2011 11 August 2012 first taproom 1 September 2012 2015 2016 Half a million for a marquee Hendrych’s beers can be ordered by customers not only in Vrchlabí, but also in more than a hundred restaurants all over the Czech Republic and Slovakia. But the owner says that it is very difficult to introduce their beer to new establishments. “We’re faced with a very strange market. Innkeepers get bribed by beer producers to choose their brand. Not by all of them, naturally. I respect all who refuse these practices and publicly denounce them. And I treasure innkeepers who do not think this way even more and, thank God, there’s more and more of them. Four years ago when we started it was much worse,” Hendrych describes the main weakness of the business. “We offer innkeepers everything they need to sell our beer in the corresponding quality, including bar and cooling equipment, glasses, beer mats and staff training. But we surely don’t go up to them and say: ‘Here’s your half a million for a beer garden or a marquee and CZK 300,000 for you and let’s call it sponsorship for accounting purposes.’ That’s just fraudulent and a misuse of the big brewers’ enormous market power.” However, he does not feel any rivalry among other small breweries in his surroundings; instead, they feel that they are all in the same boat in their fight against the old order of things. “We do not fight among ourselves; this will maybe come in ten years’ time. Right now we are in conflict with those innkeepers who are trying to suck the big suppliers dry and dare ask for various financial bonuses. I am actually looking forward to the ERS (electronic records of sales) regime, as it may help equalise the market. Other than that, I do not perceive many obstacles to the business. Naturally, everyone complains about too much administration and bureaucracy, but on the other hand, the situation in Poland, for example, is much worse. I rather deal with problems we’ve created ourselves and that we can change.”

Vojtěch Hendrych gets idea to establish a brewery during his university studies renovation of the brewery in Vrchlabí commences the beer is first introduced to locals during the Krkonoše beerfest in Vrchlabí beer is officially supplied to restaurants for the first time beer production volume 1 858 hl estimated beer production volume – 2 500 hl Just a fad? More likely a shift in thinking “Society’s mind set has changed. Our tastes are changing, we refuse to be served by someone who’s behaving badly or won’t smile; and we demand good quality. And this does not only concern the beverage and restaurant business,” Vojtěch responds, offering his opinion on why small breweries have grown in popularity over the last few years. “These changes were also among the prerequisites for the success of our brewery. If we had opened our brewery twenty years ago, we would not have succeeded,” he adds. The staff for the brewery and the nearby bar and guest house is local, as the business finds most employees in Vrchlabí. High requirements are placed on the staff to meet the customers’ demands for high service quality. “Many fabulous people live here in Vrchlabí and we only hire locally. All of our staff are local, except for the brew master,” Vojtěch adds. The Hendrychs have four successful years in the gastronomy business under their belt, but their dreams are far from having been fulfilled. “I had my first trade licence when I was eighteen and only spent one year as an employee of somebody else. Undoubtedly, I would have been worse off if my family did not have the business drive and experience it has. A person in business faces decisions that are not easy as they influence the lives of other people, and I am not even talking about money. One often needs to take a step into the unknown, as if going down the stairs in the dark. If I did not have the background I would certainly not be fool enough to start a business,” Vojtěch concludes.�

40 — business lifestyle

The equipment comes from the Pacov machine works specialising in equipment for breweries and small breweries. “Everything was tailor-made to accommodate our needs. We are constantly improving our production. Once we stop doing that, we will no longer be efficient,” says Vojtěch Hendrych.

41 — business lifestyle

“Before starting our beer, the brew master and I went around different pubs with a score card in hand, giving points to different beers according to colour, first taste, bitterness, richness, sharpness, etc. Beer tasting is similar to wine, whiskey or coffee tasting. Based on the results of our score card we created the final taste of our product. As the beer comes from the Krkonoše Mountains it must be full-bodied and bitter.”

“Over there in the back, the beer rests and naturally matures for four to eight weeks. We neither accelerate it nor add anything under pressure. Hence it is impossible for our beers to be sold in supermarkets or to have a long shelf life.”

42 — business lifestyle

“Seeing your name on your business’ signboard is a good feeling, but it is very binding. People proposed dozens of names according to local hills or animals. But for me, Hendrych is a good name for a brewery.”

43 — business lifestyle

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