Abstract
Today’s business world is marked by rapid and constant change. For most firms, this requires fundamentally re-inventing management, as the typical corporate bureaucracy cannot respond well. This chapter describes the multiple forces of change, illustrates the pitfalls of old-style management, and introduces a new management model for the times. The new model, used in a number of Silicon Valley companies and elsewhere, is a form of entrepreneurial management. It emphasizes dynamic capabilities, ambidexterity, and other qualities aimed at achieving adaptability, innovation and speed. It also relies on attracting and retaining top talent—specifically, highly entrepreneurial people. Examples show how this new model succeeds, and how older models fail, in industries ranging from telecom to textile manufacturing.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Hamel (2009), p. 92.
- 2.
We are not the first to talk about a Silicon Valley Model. In a 1996 article titled “Firm organization, industrial structure and technological innovation,” professor David Teece identified four archetypical firms by scope, structure and integration. One of these was labeled the “Silicon Valley Model” and was characterized by having a flatter structure, a more change-oriented culture, and being more specialized and less integrated.
- 3.
Hamel (2012), p. 85.
- 4.
Florida (2002), p. 5.
- 5.
Gratton (2011), pp. 23–48.
- 6.
The following discussion is from Fitzgerald and Wankerl (2010), pp. 19–30.
- 7.
The World Values Survey, started in 1981, is based in Stockholm and has contributors and investigators worldwide. Homepage: http://www.worldvaluessurvey.org/wvs.jsp.
- 8.
Florida (2002) pp. 85–86.
- 9.
VUCA is an acronym used to describe or reflect on the volatility, uncertainty, complexity, and ambiguity of general conditions and situations. Common usage of the term VUCA began in the 1990s and derives from military vocabulary. It has been subsequently used in emerging ideas in strategic leadership that apply to a wide range of organizations, from for-profit corporations to educational institutions (http://www.wikipedia.org. Accessed 6 Aug 2015).
- 10.
Hamel (2009).
- 11.
Mintzberg (1980), pp. 332–333.
- 12.
Teece (1996).
- 13.
In addition, when the choice to replace Symbian finally came in early 2011, it was to a Windows-based system instead of Android. In connection with the launch of the last Symbian-based smartphone, the new Nokia CEO, Stephen Elop (previously with Microsoft) announced that it would be replaced within a year by a smartphone with a Microsoft OS. http://money.cnn.com/2011/02/11/technology/nokia_microsoft/ (Accessed 5 August 2015)
In 2010 Symbian held 37.6 % of the smartphone market, down from 46.9 % in 2009. http://www.gartner.com/newsroom/id/1543014 (Accessed 5 August 2015)
By 2013 Symbian had disappeared from the statistics and Microsoft OS had 3.2 % of the smartphone market, while Android had 78.4 % (up from 22.7 % in 2010 and 3.9 % in 2009) http://www.gartner.com/newsroom/id/2665715 (Accessed 5 August 2015).
- 14.
- 15.
Hamel (2009), p. 93.
- 16.
See for example Dukcevich (2001). Converse was later acquired by Nike and Converse-branded shoes are still sold, as of 2015.
- 17.
Nicholls-Nixon (2005).
- 18.
Pinto (2013) http://upmagazine-tap.com/en/pt_artigos/petratex-the-dream-factory/ (Accessed 29 June 2015).
- 19.
Noble goals are important in Japanese culture as well—and this point was strongly introduced by Percy Barnevik of ABB when he was seen as one of the world’s thought leaders.
- 20.
Hamel (2009), p. 92.
- 21.
It can even be argued that the textile industry often leads the development when new management models emerge. Examples include the use of outsourcing, a focus on design and distribution, and the “shop-in-shop” concept that Apple later adopted in its industry.
- 22.
A major reason why the diffusion in Stockholm was almost five times the one in other major cities was the business strategy of the leading actors. While Lars Magnus Ericsson in Sweden viewed the telephone as something for broader groups and focused on a low-price strategy, Alexander Graham Bell, the innovator in the US, initially viewed the market in a considerably more limited way and used a high pricing strategy. The telephone was introduced by Bell in 1876 and already in 1885 Stockholm was the place in the world with most telephones: “SAT’s business philosophy resulted in Stockholm having more telephones in 1885 than anywhere else in the world, both per head and in absolute figures. There were 4,832 telephones in Stockholm, 4,248 in Berlin, 4,193 in London, 4,054 in Paris and 3,700 in New York.” (Karlsson and Lugn, undated).
- 23.
These statistics are from Huurdeman (2003).
- 24.
- 25.
A key acquisition was Where 2 Technologies, whose cofounders Jens and Lars Rasmussen joined Google to continue developing their mapping technology, now known as Google Maps. See for instance Greenbaum (2011). http://6thfloor.blogs.nytimes.com/2011/04/18/who-made-googles-map-pin/?_r=0 (Accessed 6 Aug 2015).
- 26.
Jobs (2010) https://www.youtube.com/watch?v=f60dheI4ARg (Accessed 14 July 2015).
- 27.
Ibid.
- 28.
Later chapters will explore these and other aspects of Google’s management in more detail.
- 29.
Albergotti (2014) http://www.wsj.com/articles/facebooks-millennials-arent-entitled-they-are-empowered-1419537468 (Accessed 6 Aug 2015).
- 30.
All of the following about LinkedIn is from Bryant (2012).
- 31.
This material about Twitter is from Costolo’s remarks as reported in Gray (2012) 7 Leadership lessons from a mind-meld between Twitter’s Dick Costolo and Venture Guru Ben Horowitz http://www.fastcompany.com/3002875/7-leadership-lessons-mind-meld-between-twitters-dick-costolo-and-venture-guru-ben-horowitz (Accessed 6 August 6 2015).
- 32.
This is almost identical to former Motorola CEO Bob Galvin’s attempts to make Motorola people more aware of the risks of group thinking and the importance of counter-intuitive thinking, referring to an abridged version of Alex Osborn’s 1991 book Your Creative Power.
- 33.
- 34.
Musk announced the move in a brief document famously titled “All Our Patent Are Belong To You”: see Musk (2014). The title uses bad English grammar but apparently was written that way on purpose, as a humorous reference to a poorly translated line from an old video game which had become a running joke on the Internet: see Dubs (2009). http://knowyourmeme.com/memes/all-your-base-are-belong-to-us (Accessed 30 July 2015).
- 35.
Musk (2014) http://www.teslamotors.com/blog/all-our-patent-are-belong-you (Accessed 6 August 2015).
- 36.
Glassdoor (2015) http://www.glassdoor.com/Reviews/Apigee-Reviews-E421770.htm (Accessed 30 July 2015).
- 37.
Kodak is, together with GE and DuPont, one of the companies that defined the modern large corporation in the US, having been a pioneer in building research labs. Kodak was the leader in creating mass-market cameras in the early 1900s, recreated this leadership with the Instamatics of the 1960s—and all of this was based on the film technology that was Kodak’s backbone.
- 38.
Kodak’s board had, however, taken measures to prepare for the digital age 12 years earlier, by recruiting Motorola’s CEO George Fisher in 1993 to lead the company in a new direction. In October 1997 Bloomberg Business asked “Can George Fisher Fix Kodak?” and presented the following analysis of the situation: “But critics say Fisher has been slow to address Kodak’s basic internal problems: a corporate culture mired in a mind-set left over from an earlier manufacturing age, and excessive costs. Rather than announcing a new era with tough layoffs four years ago and bringing in a new team to oversee the photo business, he decided to minimize cost-cutting in Kodak’s traditional film business in the hope that digital revenues would grow enough to support it. … Fisher is also dealing with a far more ingrained and bureaucratic culture at Kodak than he ever faced during his days at Motorola. Although he has taken steps to shake things up—such as instituting pay-for-performance standards—the old-line manufacturing culture continues to impede Fisher’s efforts to turn Kodak into a high-tech growth company. ‘Fisher has been able to change the culture at the very top,’ says one industry executive. ‘But he hasn’t been able to change the huge mass of middle managers, and they just don’t understand this [digital] world.’”
- 39.
Hamm and Symonds (2006). The following quotation and narrative are from the same article. http://www.bloomberg.com/bw/stories/2006-11-26/mistakes-made-on-the-road-to-innovation (Accessed 6 August 2015).
References
Albergotti, R. (2014, December 25). At Facebook, boss is a dirty word. The Wall Street Journal. http://www.wsj.com/articles/facebooks-millennials-arent-entitled-they-are-empowered-1419537468. Accessed 6 Aug 2015.
Bryant, A. (2012, November 10). In sports or business, always prepare for the next play. The New York Times. http://www.nytimes.com/2012/11/11/business/jeff-weiner-of-linkedin-on-the-next-play-philosophy.html. Accessed 6 Aug 2015.
Central Intelligence Agency. (2013). CIA world factbook 2013. New York: Skyhorse Publishing.
Dubs, J. (2009). All your base are belong to us. Posted on Know Your Meme at http://knowyourmeme.com/memes/all-your-base-are-belong-to-us. Accessed 30 July 2015.
Dukcevich, D. (2001, January 22). Converse loses its footing. Forbes. http://www.forbes.com/2001/01/22/0122converse.html. Accessed 29 June 2015.
Fitzgerald, E., & Wankerl, A. (2010). Inside real innovation. Singapore: World Scientific Publishing.
Florida, R. (2002). The rise of the creative class. New York: Basic Books.
Glassdoor. (2015). Apigee reviews at http://www.glassdoor.com/Reviews/Apigee-Reviews-E421770.htm. Accessed 30 July 2015.
Gratton, L. (2011). The shift: The future of work is already here. London: HarperCollins UK.
Gratton, L. (2013, October 22). Leading in complex times on her FoWLAB Blog. http://lyndagrattonfutureofwork.typepad.com/lynda-gratton-future-of-work/2013/10/index.html. Accessed 29 June 2015.
Gray, T. (2012, November 9). 7 leadership lessons from a mind-meld between Twitter’s Dick Costolo and venture Guru Ben Horowitz. Fast Company. http://www.fastcompany.com/3002875/7-leadership-lessons-mind-meld-between-twitters-dick-costolo-and-venture-guru-ben-horowitz. Accessed 29 June 2015.
Greenbaum, H. (2011, April 18). Who made google’s map pin? The New York Times 6th Floor Blog. http://6thfloor.blogs.nytimes.com/2011/04/18/who-made-googles-map-pin/?_r=0. Accessed 6 Aug 2015.
Hamel, G. (2009). Moon shots for management. Harvard Business Review, 87(2), 91–99.
Hamel, G. (2012). What matters now. San Francisco: Jossey-Bass.
Hamm, S., & Symonds, W. C. (2006, November 26). Mistakes made on the road to innovation. Bloomberg Businessweek. http://www.bloomberg.com/bw/stories/2006-11-26/mistakes-made-on-the-road-to-innovation. Retrieved 29 June 2015.
Huurdeman, A. A. (2003). The worldwide history of telecommunications. Hoboken: Wiley.
Jobs, S. (2010). Video excerpt from interview at the D-8 summit in Nigeria, posted at https://www.youtube.com/watch?v=f60dheI4ARg. Accessed 14 July 2015.
Karlsson, S., & Lugn, A. (undated). Competition. Posted in the history of Ericsson at http://www.ericssonhistory.com/changing-the-world/phones-for-everyone/Competition/. Accessed 12 July 2015.
Mintzberg, H. (1980). Structure in 5’s: A synthesis of the research on organization design. Management Science, 26(3), 322–341.
Musk, E. (2014, June 12). All our patent are belong to you. Posted on Tesla Motors Blog. http://www.teslamotors.com/blog/all-our-patent-are-belong-you. Accessed 30 July 2015.
Nicholls-Nixon, C. L. (2005). Rapid growth and high performance: The entrepreneur’s “impossible dream?” Academy of Management Executive, 19(1), 77–89.
Pinto, L. (2013, February 1). Petratex—The dream factory. Up Magazine. http://upmagazine-tap.com/en/pt_artigos/petratex-the-dream-factory/. Accessed 29 June 2015.
Teece, D. (1996). Firm organization, industrial structure and technological innovation. Journal of Economic Behavior and Organization, 31(2), 193–224.
Wikipedia. (2015). List of countries by number of mobile phones in use, posted at: http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use. Accessed 11 Mar 2015.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer International Publishing Switzerland
About this chapter
Cite this chapter
Steiber, A., Alänge, S. (2016). The World Is Changing. In: The Silicon Valley Model. Management for Professionals. Springer, Cham. https://doi.org/10.1007/978-3-319-24921-6_1
Download citation
DOI: https://doi.org/10.1007/978-3-319-24921-6_1
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-24919-3
Online ISBN: 978-3-319-24921-6
eBook Packages: Business and ManagementBusiness and Management (R0)