Annika Steiber Sverker Alänge The Silicon Valley Model Management for Entrepreneurship * ) Springer
Contents 1 The World Is Changing 1 1.1 Introducing a New Management Model 1 1.2 The Changing Nature of Change (And What It Means for Management) 3 1.2.1 Implications for Management: Drawbacks of the Old Way 5 1.2.2 The New Model: Essentially Entrepreneurial 6 1.3 Tales of Two Industries 7 1.3.1 The Clothing Industries: Textiles, Garments, Shoes, Retail 7 1.3.2 Telephones and Phone Services 9 1.3.3 What Can We Learn? 11 1.4 The High Road Versus the Missed Turn: Comparing New and Old Management Models 12 1.4.1 Finding the High Road: The Entrepreneurial Path.... 12 1.4.2 Missing the Tum: The Case of Kodak 15 1.5 Moving On 16 References 16 2 Six Basic Principles for a Changing World 19 2.1 Dynamic Capabilities 21 2.1.1 When 'Core Competencies' Aren't Enough 21 2.1.2 Dynamic Capabilities: A New Concept of Corporate Resources 22 2.2 A Continually Changing Organization 24 2.2.1 Some Practices Allowing Continual Change 24 2.3 A People-Centric Approach 26 2.4 An Ambidextrous Organization 28 2.5 An Open Organization That Networks with Its Surroundings... 30 2.6 A Systems Approach 31 2.7 Moving On 34 References 34 xi
xii Contents 3 Silicon Valley: A Cradle of Management Innovation 37 3.1 The Forces That Drive Management Innovation, in Brief 38 3.2 Management Innovation: The Influence of IT 40 3.2.1 New Ways of Managing Emerge 41 3.3 Management Innovation: The Influence of Regional Culture... 43 3.3.1 The Early Electronics Industry 44 3.4 Management Innovation: New Levels of Networking 46 3.5 Management Innovation: People Focus, from Postwar to the Present 47 3.6 Closing Notes (With Remarks on 'Replicating' Silicon Valley) 50 References 51 4 Entrepreneurship: What It Really Is, and Why It Must Be Integrated into Management of the Firm 53 4.1 What Is Entrepreneurship? 54 4.1.1 A Modern Understanding (and a New Definition).... 55 4.1.2 The Company as'entrepreneur' 57 4.2 The Divide Between Entrepreneurship and Management: Obstacles and Evolutionary Forces 58 4.2.1 How Business Schools Reinforced the Split 59 4.2.2 Toward a Re-synthesis of Entrepreneurship and Management 61 4.3 What Can a Company Do? 62 References 62 5 A Special Breed of People 65 5.1 Focusing on the'special Breed,'from Google On ward 66 5.2 On'Multidimensional'People and the Need for Them 68 5.3 Cornerstones of Success: Five Core Qualities of the 'Special Breed' 70 5.3.1 Entrepreneurial 71 5.3.2 Adaptable 71 5.3.3 Passionate 73 5.3.4 Constantly Questioning the Status Quo 73 5.3.5 Collaborative... 74 5.4 Attracting the Special Breed 75 5.5 How Do We Keep These People? 78 5.5.1 The Ugly Duckling 78 5.5.2 Meaningful Work, Perks and Benefits 79 5.5.3 The Employer-Employee Alliance 81 5.6 Conclusions (and a Start) 84 References 84
Contents xiii 6 Culture: The New Black 87 6.1 What'Culture'Consists Of 87 6.2 External Influences on Culture 89 6.3 The People Effect: How Founders Shape Culture 90 6.4 Steps to Building a Strong Culture 92 6.5 The '10 Commandments': Core Attributes of the Cultures We Studied 93 6.5.1 Not an Ordinary Company 94 6.5.2 Things Change Constantly and We Need to Be Adaptable 95 6.5.3 Move Fast, Speed Matters 96 6.5.4 Hiring Is the Most Important Thing We Do 97 6.5.5 Product Excellence Is Key 98 6.5.6 Data-Driven Decision Making and Fast Leaming 99 6.5.7 A Fiat Organization with Minimal Bureaucracy 100 6.5.8 Openness and Transparency 101 6.5.9 Leaders, Not Managers 101 6.5.10 Build an Ecosystem, Not Just a Company 103 6.6 Concluding Comments 104 References 104 7 Leading for Entrepreneurship 105 7.1 Top Leaders'Roles 106 7.2 Providing Direction and Expectation Level 107 7.3 Communication and Leader Behavior 109 7.4 Founder Entrepreneurs 112 7.5 The Role of Leaders on the Middle Levels 113 7.6 Decision-Making 114 7.7 Incentives and Motivation 115 7.8 Hiring and Developing Leaders 117 7.9 Concluding Comments 118 References 119 8 The Entrepreneurial Organization Is Dynamic and Ambidextrous 121 8.1 Dynamic Capabilities 122 8.1.1 Ambidexterity in Theory 123 8.1.2 The Challenge of Ambidexterity 124 8.2 Innovation by Many, Inside Present Operations 125 8.2.1 Top Executive Focus 125 8.2.2 The 'Semi-Structured' State 126 8.2.3 Small Teams 126 8.2.4 Transparency and Openness 127 8.2.5 Heuristics or 'Simple Rules' 127 8.2.6 Intrinsic Incentives in Meaningful Work 129
xiv Contents 8.2.7 Rapid Learning Processes 130 8.2.8 Big Data on User Behavior 131 8.3 Innovation by Separate Innovation Units 131 8.3.1 Acquisitions 132 8.3.2 Corporate Ventures 132 8.3.3 Small Firm-Large Firm Ventures 134 8.3.4 Spin-Ins and Incubation 134 8.4 Open Innovation Approaches 135 8.4.1 University Interaction 136 8.4.2 Suppliers as Innovators 136 8.4.3 Crowdsourcing from Users and Communities 136 8.4.4 External Development Platforms 138 8.4.5 Cultivating Ecosystems 138 8.5 Concluding Comments 139 References 140 9 The Silicon Valley Model 143 9.1 The Evolution of a New Breed of Organization 143 9.1.1 The New Model's Roots in'adhocracy' 144 9.2 The Silicon Valley Model: 'A Startup in a Large Suit' 146 9.2.1 Major Elements of the Silicon Valley Model 147 9.3 A Conceptual Model, Visualized 149 9.4 Differences Between a Traditional Management Model and the Silicon Valley Model 150 9.5 The Silicon Valley Model and the Six Basic Principles for a Changing World 153 9.6 Wrapping Up... And Looking Ahead 154 References 155 10 Implications Beyond Silicon Valley 157 10.1 The Use of Elements of the Silicon Valley Model in Other Companies 158 10.1.1 An Inspiring and Socially Significant Vision 158 10.1.2 Visionary, Entrepreneurial and Growth-oriented Top Leadership 159 10.1.3 Belief and Investment in Entrepreneurial People 160 10.1.4 A Culture That Guides and Motivates Entrepreneurial People 161 10.1.5 Leaders Who Support Entrepreneurial People 161 10.1.6 An Ambidextrous Organization 162 10.1.7 Open Innovation 163 10.1.8 Coordination 164 10.1.9 Information and Communication Technologies: Do the Silicon Valley Companies Have a Unique Edge? 165
Contents xv 10.2 Can the Whole System of Interlinked Elements Be Used Outside Silicon Valley? 166 10.2.1 Startup Culture in Mature Companies 166 10.2.2 A System of Interconnected Elements 167 10.3 Use of the Model in an Innovation Unit Within a Large Company 168 10.4 Concluding Comments 169 References 170