The document provides an executive summary of the Silicon Valley Model, a new approach to managing firms in the digital age. It summarizes that traditional bureaucratic management models are not well-suited for today's fast-paced environment, while the Silicon Valley Model emphasizes an entrepreneurial culture, dynamic capabilities, flexible structures, and rapid experimentation. Key elements of this model include having an innovative culture that attracts entrepreneurial people, semi-structured organizations, and using rapid test-and-learn cycles to quickly develop and iterate on new products and services.
As startups grow, they shelve their breakthrough innovations and move toward incremental releases such as feature updates. This problem is generally attributed to lags in market demand for new products. It takes time for the relatively small number of early adopters to expand into a broad base of customers.
But market demand is not always the main problem. Startups face internal challenges that hold them back even more. Once a company expands beyond a few hundred people, the informal, entrepreneurial management style of the early days no longer works. Fledgling companies need to grow large but keep the fluidity and productivity of a startup, and it’s not obvious how to do so; first-time founders typically have little experience running bigger companies. Add to that the vagaries of competition and the challenges associated with recruiting and retaining good people, and it is no surprise that so few companies grow past the start-up phase.
You could call this the “chrysalis effect.” Several years after it’s founded, an organization experiences something like the metamorphosis of a larva into a full-grown butterfly. Even for the insect world, this is a brutal transition; the caterpillar molts its skin four or five times and then, as a pupa, literally digests itself. Its old body becomes broth. Formerly dormant cells called imaginal discs, released by new hormones, replicate rapidly, forming eyes, wings, and color patterns. Only one in 400 caterpillar eggs survives to take flight.
The chrysalis metaphor is apt because the process of maturation for startups also involves severe winnowing. In 2015, startups died at a rate of one per week, according to the venture capital database CB Insights. When it comes to "scale-ups," the chances of survival are even lower. The survivors become famous: Google, Amazon, Facebook, Netflix, and Apple are among them. But to get through the transition successfully, leaders have to radically change their organizations and the way they manage, while still growing. During this necessary transition, many companies are sold or taken over. But if the upstart leaders have anticipated the transition — for example, by creating new roles for the founders, attracting people who have experience with similar transitions, developing collaborative networks, and borrowing established practices in their own deliberate way — they can restructure and soar.
Purpose-driven organizations management. Ideas for a better worldMaría Rubio
This open access book offers novel solutions to ensure employees support a wider organizational meaning whilst guaranteeing that the company benefits from the employee’s individual sense of purpose. Advocating a shift from previous models and theories, this book contributes to debate and offers insight for both scholars and practitioners. The chapters bring together academic rigour and practical models to help readers distinguish between the fads and influential strategies.
Exploring the development of purpose at each level of business, from strategy and leadership to communication, this book avoids theoretical jargon and provides new approaches to building sustainable purpose-driven organizations.
https://link.springer.com/content/pdf/10.1007%2F978-3-030-17674-7.pdf
The study was based on qualitative interviews to different members of the startup community, including entrepreneurs, mentors, investors, incubators, event organizers and government officials.
The resulting report provided a comprehensive view of the state of entrepreneurship in Costa Rica including determinants such as culture, the startup community, the entrepreneur, the startup and funding.
As startups grow, they shelve their breakthrough innovations and move toward incremental releases such as feature updates. This problem is generally attributed to lags in market demand for new products. It takes time for the relatively small number of early adopters to expand into a broad base of customers.
But market demand is not always the main problem. Startups face internal challenges that hold them back even more. Once a company expands beyond a few hundred people, the informal, entrepreneurial management style of the early days no longer works. Fledgling companies need to grow large but keep the fluidity and productivity of a startup, and it’s not obvious how to do so; first-time founders typically have little experience running bigger companies. Add to that the vagaries of competition and the challenges associated with recruiting and retaining good people, and it is no surprise that so few companies grow past the start-up phase.
You could call this the “chrysalis effect.” Several years after it’s founded, an organization experiences something like the metamorphosis of a larva into a full-grown butterfly. Even for the insect world, this is a brutal transition; the caterpillar molts its skin four or five times and then, as a pupa, literally digests itself. Its old body becomes broth. Formerly dormant cells called imaginal discs, released by new hormones, replicate rapidly, forming eyes, wings, and color patterns. Only one in 400 caterpillar eggs survives to take flight.
The chrysalis metaphor is apt because the process of maturation for startups also involves severe winnowing. In 2015, startups died at a rate of one per week, according to the venture capital database CB Insights. When it comes to "scale-ups," the chances of survival are even lower. The survivors become famous: Google, Amazon, Facebook, Netflix, and Apple are among them. But to get through the transition successfully, leaders have to radically change their organizations and the way they manage, while still growing. During this necessary transition, many companies are sold or taken over. But if the upstart leaders have anticipated the transition — for example, by creating new roles for the founders, attracting people who have experience with similar transitions, developing collaborative networks, and borrowing established practices in their own deliberate way — they can restructure and soar.
Purpose-driven organizations management. Ideas for a better worldMaría Rubio
This open access book offers novel solutions to ensure employees support a wider organizational meaning whilst guaranteeing that the company benefits from the employee’s individual sense of purpose. Advocating a shift from previous models and theories, this book contributes to debate and offers insight for both scholars and practitioners. The chapters bring together academic rigour and practical models to help readers distinguish between the fads and influential strategies.
Exploring the development of purpose at each level of business, from strategy and leadership to communication, this book avoids theoretical jargon and provides new approaches to building sustainable purpose-driven organizations.
https://link.springer.com/content/pdf/10.1007%2F978-3-030-17674-7.pdf
The study was based on qualitative interviews to different members of the startup community, including entrepreneurs, mentors, investors, incubators, event organizers and government officials.
The resulting report provided a comprehensive view of the state of entrepreneurship in Costa Rica including determinants such as culture, the startup community, the entrepreneur, the startup and funding.
Crawl, walk, run, and only then compete - v5.0Marvin Soud
Crawl, Walk, Run, and Only Then Compete - A framework for manufacturing innovative entrepreneurial ecosystems in emerging economies.
A healthy government, society, business, or entrepreneurial ecosystem all have what we see as related foundations at their core. In this report, we address the foundational pillars that are needed to build healthy, vibrant, progressive, globally competitive and most importantly, economically productive entrepreneurial ecosystems.
This guide takes lessons from around the world, but is intended specifically for emerging economies and addresses their unique challenges.
White paper the thinking-feeling organization (dec. 2013) finalBrian Christian
Anyone who has pursued a strategic innovation knows how difficult it can be to win internal support for even the most attractive opportunity. This is largely due to the fact that new offerings and business models are unfamiliar to -- and often cause discomfort among -- those within the organization. But companies that learn to effectively balance their analytical and emotional reactions to new opportunities are best able to assess and pursue them successfully. In this white paper, Inovo CEO Larry Schmitt explores a new paradigm for strategic innovation -- iterative deepening -- that embraces this duality of thinking and feeling and helps innovators learn to manage it effectively.
There's a buzz about the future of work and what it means for individuals, leaders and organisations. In this pack we present our ideas about 3 dynamic forces – social, technology and economic change. We look at the implications for career management and present PlanDo, the market leading DIY career management platform that equips you to achieve, grow and contribute everyday.
Bbva open mind-book-reinventing-the-company-in-the-digital-age-business-innov...FTSA Academy
“Reinventing the Company in the Digital Age” is the latest addition to BBVA’s annual series dedicated to analyzing the major issues of our time. As always the principal idea behind our series of books is the desire to understand and help people understand the powerful forces that are influencing our world. Over the past six years our books have dealt with the many interrelated subjects of the digital age: Technological and social change, big data, innovation and the new behaviors and preferences of societies. “Reinventing the Company in the Digital Age” goes much deeper into how the information technology driven revolution is influencing the very foundation of how the great majority of us work and do business. This in many ways is tantamount to discussing how the digital revolution is shaping the future of the economy, the society and our daily lives.
With the advent of social technology come the need for Marketing, Advertising Agencies and creative talents to build new competencies for survival. Serengeti is a guide and exposition on the creative requirements that the creative industry needs to evolve and thrive.
Who Can Benefit from this Report?
This white paper is a must read for any professional regardless of whether they are in purchasing or not as it examines the very culture that defines a corporation, and ultimately determines its ability to survive and thrive in the emerging global economy.
Referencing a diverse set of reports and studies including a Chief Procurement Officers panel discussion, the reader is assured of gaining insights from the previously uncharted waters of executive thought process.
People and Innovation: Getting Ideas on the tableScott Smith
These days, everyone can attest to the importance of being innovative. In a knowledge economy where small insights can quickly shift the competitive landscape and capabilities can rapidly be bought, borrowed or built, we believe that those leaders who oversee a dynamic, fastmoving, innovation portfolio will have the best chance of breaking away from the pack and generating growth. But many organizations are finding it difficult to engage their people – from their employees to their customers to their suppliers – in the innovation process. If this is the case, then where do they start?
Published by the IBM Institute for Business Value, 2006
What we measure may deserve a shift in focus...Jyoti Pandey
Companies that are conscious of their social responsibility impact their bottom line in a positive way. My article on sustainability reporting in ethikos.
“The fact is, culture eats strategy for lunch. You can have a good strategy in place, but if you don’t have the culture and the enabling systems that allow you to successfully implement that strategy, the culture of the organization will defeat the strategy.” Richard Clark, CEO of Merck (2005 – 2010)
In a study conducted by Bain Consulting in 2008, 91% of the 1200 senior executives at global companies agreed that “culture is as important as strategy for business success”. It further revealed that 81% of executives agreed that “a company without a winning culture was doomed to mediocrity.” In a more recent study by Booz and Company in 2013 , 96% of the 2200 respondents agreed that “culture change is needed in their organisation” while 51% agree “that their culture needs a major overhaul”.
These are startling numbers. If organisational culture is so important, why is it not one of the top items on the agenda?
In the second of this 6 part Change Management series, we outlined the importance of communicating your change and actively engaging your stakeholders.
In this article, we discuss the importance of designing and building a culture that supports your vision.
How-can-purpose-reveal-a-path-through-uncertainty. By EY. 2017Gemma Alcalá
El propósito y la empresa en el siglo XXI. El concepto de
propósito empresarial adquiere un significado cada vez más relevante en la estrategia de crecimiento de las compañías.
Una de las conclusiones de este informe es que la mayoría de las empresas y marcas confían actualmente en el poder del propósito, pero encuentran dificultades para completar su integración en la estrategia y en el funcionamiento diario de la compañía.
El propósito de una empresa, más allá del beneficio económico, se producen en respuesta a las demandas de los trabajadores, a la necesidad de que haya marcas inspiradoras o compañías socialmente más responsables.
En el informe se habla de las empresas 'Capital P.'. Ser una empresa con “Capital P” son aquellas que tienen un propósito bien integrado y que es clave para sobrevivir en un entorno muy volatil, repleto de incertidumbres, complejo y ambiguo.
Las empresas líderes afirman que su propósito está integrado en todas sus actividades, con un enfoque tanto a corto como a largo plazo, lo que genera valor a todo lo que hacen.
La Cuarta Revolución Industrial incrementa las necesidades de las empresas y pone en peligro a aquellas que no tienen un propósito bien integrado. Resulta necesario aportar valor a todos los stakeholders (grupos de interés), aspirar a mejorar la sociedad, tener una visión más amplia de la actividad y afrontar las oportunidades que se presenten de
forma inesperada.
Crawl, walk, run, and only then compete - v5.0Marvin Soud
Crawl, Walk, Run, and Only Then Compete - A framework for manufacturing innovative entrepreneurial ecosystems in emerging economies.
A healthy government, society, business, or entrepreneurial ecosystem all have what we see as related foundations at their core. In this report, we address the foundational pillars that are needed to build healthy, vibrant, progressive, globally competitive and most importantly, economically productive entrepreneurial ecosystems.
This guide takes lessons from around the world, but is intended specifically for emerging economies and addresses their unique challenges.
White paper the thinking-feeling organization (dec. 2013) finalBrian Christian
Anyone who has pursued a strategic innovation knows how difficult it can be to win internal support for even the most attractive opportunity. This is largely due to the fact that new offerings and business models are unfamiliar to -- and often cause discomfort among -- those within the organization. But companies that learn to effectively balance their analytical and emotional reactions to new opportunities are best able to assess and pursue them successfully. In this white paper, Inovo CEO Larry Schmitt explores a new paradigm for strategic innovation -- iterative deepening -- that embraces this duality of thinking and feeling and helps innovators learn to manage it effectively.
There's a buzz about the future of work and what it means for individuals, leaders and organisations. In this pack we present our ideas about 3 dynamic forces – social, technology and economic change. We look at the implications for career management and present PlanDo, the market leading DIY career management platform that equips you to achieve, grow and contribute everyday.
Bbva open mind-book-reinventing-the-company-in-the-digital-age-business-innov...FTSA Academy
“Reinventing the Company in the Digital Age” is the latest addition to BBVA’s annual series dedicated to analyzing the major issues of our time. As always the principal idea behind our series of books is the desire to understand and help people understand the powerful forces that are influencing our world. Over the past six years our books have dealt with the many interrelated subjects of the digital age: Technological and social change, big data, innovation and the new behaviors and preferences of societies. “Reinventing the Company in the Digital Age” goes much deeper into how the information technology driven revolution is influencing the very foundation of how the great majority of us work and do business. This in many ways is tantamount to discussing how the digital revolution is shaping the future of the economy, the society and our daily lives.
With the advent of social technology come the need for Marketing, Advertising Agencies and creative talents to build new competencies for survival. Serengeti is a guide and exposition on the creative requirements that the creative industry needs to evolve and thrive.
Who Can Benefit from this Report?
This white paper is a must read for any professional regardless of whether they are in purchasing or not as it examines the very culture that defines a corporation, and ultimately determines its ability to survive and thrive in the emerging global economy.
Referencing a diverse set of reports and studies including a Chief Procurement Officers panel discussion, the reader is assured of gaining insights from the previously uncharted waters of executive thought process.
People and Innovation: Getting Ideas on the tableScott Smith
These days, everyone can attest to the importance of being innovative. In a knowledge economy where small insights can quickly shift the competitive landscape and capabilities can rapidly be bought, borrowed or built, we believe that those leaders who oversee a dynamic, fastmoving, innovation portfolio will have the best chance of breaking away from the pack and generating growth. But many organizations are finding it difficult to engage their people – from their employees to their customers to their suppliers – in the innovation process. If this is the case, then where do they start?
Published by the IBM Institute for Business Value, 2006
What we measure may deserve a shift in focus...Jyoti Pandey
Companies that are conscious of their social responsibility impact their bottom line in a positive way. My article on sustainability reporting in ethikos.
“The fact is, culture eats strategy for lunch. You can have a good strategy in place, but if you don’t have the culture and the enabling systems that allow you to successfully implement that strategy, the culture of the organization will defeat the strategy.” Richard Clark, CEO of Merck (2005 – 2010)
In a study conducted by Bain Consulting in 2008, 91% of the 1200 senior executives at global companies agreed that “culture is as important as strategy for business success”. It further revealed that 81% of executives agreed that “a company without a winning culture was doomed to mediocrity.” In a more recent study by Booz and Company in 2013 , 96% of the 2200 respondents agreed that “culture change is needed in their organisation” while 51% agree “that their culture needs a major overhaul”.
These are startling numbers. If organisational culture is so important, why is it not one of the top items on the agenda?
In the second of this 6 part Change Management series, we outlined the importance of communicating your change and actively engaging your stakeholders.
In this article, we discuss the importance of designing and building a culture that supports your vision.
How-can-purpose-reveal-a-path-through-uncertainty. By EY. 2017Gemma Alcalá
El propósito y la empresa en el siglo XXI. El concepto de
propósito empresarial adquiere un significado cada vez más relevante en la estrategia de crecimiento de las compañías.
Una de las conclusiones de este informe es que la mayoría de las empresas y marcas confían actualmente en el poder del propósito, pero encuentran dificultades para completar su integración en la estrategia y en el funcionamiento diario de la compañía.
El propósito de una empresa, más allá del beneficio económico, se producen en respuesta a las demandas de los trabajadores, a la necesidad de que haya marcas inspiradoras o compañías socialmente más responsables.
En el informe se habla de las empresas 'Capital P.'. Ser una empresa con “Capital P” son aquellas que tienen un propósito bien integrado y que es clave para sobrevivir en un entorno muy volatil, repleto de incertidumbres, complejo y ambiguo.
Las empresas líderes afirman que su propósito está integrado en todas sus actividades, con un enfoque tanto a corto como a largo plazo, lo que genera valor a todo lo que hacen.
La Cuarta Revolución Industrial incrementa las necesidades de las empresas y pone en peligro a aquellas que no tienen un propósito bien integrado. Resulta necesario aportar valor a todos los stakeholders (grupos de interés), aspirar a mejorar la sociedad, tener una visión más amplia de la actividad y afrontar las oportunidades que se presenten de
forma inesperada.
My thoughts on the background to and the essential elements of 21st century management. Why corporate entrepreneurs are different and how we can develop them.
Entrepreneurial Strategy and Competitive DynamicsAfter reading t.docxSALU18
Entrepreneurial Strategy and Competitive Dynamics
After reading this chapter, you should have a good understanding of the following learning objectives:
LO8.1 The role of opportunities, resources, and entrepreneurs in successfully pursuing new ventures.
LO8.2 Three types of entry strategies—pioneering, imitative, and adaptive—commonly used to launch a new venture.
LO8.3 How the generic strategies of overall cost leadership, differentiation, and focus are used by new ventures and small businesses.
LO8.4 How competitive actions, such as the entry of new competitors into a marketplace, may launch a cycle of actions and reactions among close competitors.
LO8.5 The components of competitive dynamics analysis—new competitive action, threat analysis, motivation and capability to respond, types of competitive actions, and likelihood of competitive reaction.
Learning from Mistakes
Digg was an early social network pioneer. In 2004, its founder, Kevin Rose, had an innovative idea. Rather than allow major news services to decide what the big news stories of the day were, Rose figured that people could make that choice. He founded Digg, a news-sharing site, to give them that choice.1 Users would post news articles they found interesting. Other users would then vote the story up or down and also post comments about the article. Articles that were voted up moved up in prominence on the site. Those voted down sank and eventually disappeared. The business took off and served as a front page article on BusinessWeek in 2006. Notable venture capitalists like Marc Andreessen, Ron Conway, and Greylock Partners invested $45 million in Digg. It was rumored that Google was interested in buying Digg in 2008 for a reported $200 million.
But the deal never happened, and Digg quickly fell from favor. It struggled due to two major issues—new competition and poor operational decisions. As we’ll discuss later in this chapter, innovative business ideas are typically quickly imitated. Digg faced two forms of imitation. First, Reddit and other sites came online to challenge Digg by implementing similar business models. Second, other social network sites,
247
such as Facebook and Twitter, ate away at Digg’s business by letting users share news articles they found interesting with their friends and followers. This seemed much more personalized to many, since they would be more interested in what their friends recommended than how the general population voted on Digg.
Digg also suffered by not building the resource set needed to serve their users effectively. They struggled to handle the volume of traffic on their site, leaving users frustrated when the site kept going down. When they finally went to a wholesale upgrade of their systems in 2010, there were a number of technical glitches that drove users away. They also didn’t make the site as easy to use as they should have or as easy as their competitors’ sites. As Rose himself noted, “It took eight steps to post a li ...
Test 4 Study Guide-What does a spreadsheet consist ofA groupi.docxmattinsonjanel
Test 4 Study Guide
-What does a spreadsheet consist of?
A grouping of text and numbers in a rectangular grid or table
-What is a label?
A label most often refers to a text entry such as a heading used to identify a column of data.
-What is the default alignment of a cell which begins with a label?
-Does the print command cause that portion of the current window visible on the screen to be printed unless changed in options?
- Can margins be set using inches and centimeters?
-Can you perform a series fill in any direction?
-Can functions have more than three arguments?
-How are absolute cell reference, and mixed cell reference identified?
-Can charts contain data from a completely separate spreadsheet?
-A chart most be recreated when values are changed?
-can scales on the vertical and horizontal axis be modified?
-is it mandatory that the arguments in an array formula be absolute value?
-How are DSUM and DCOUNT different from SUM and COUNT?
SUM-Function adds the values in a specified rang
COUNT-Function that tallies how many cells in specified range contain numbers or dates
DSUM-Returns the sum of the values in the summary column that meet specified criteria
DCOUNT-Returns the number of cells containing numbers that meet specified criteria
-Know the IF statement arguments
-Can the PMT only be used if the payments are the same?
-Can database be sorted in ascending or descending order?
-Does the worksheets have to have an identical layout in order for Consolidation using labels to work?
-Can other functions be used besides SUM when consolidating worksheets?
-Can the variables in a data table be changed once set up?
-
15: Organizational Culture and Innovation: living and working together
Social Media and Corporations: Don’t Cross the Line When You Go Online
When you think of “shameless self-promotion on Twitter”, what industry do you think of first? Whatever your choice, there’s a good chance it’s not Wall Street.
But it’s not for lack of wanting. Though investment banking has been slower than most industries to dive headfirst into self-promotion via Twitter and Facebook, many young professionals are eager to reach out to existing and potential customers using social media tools. But firms are cautious about how bankers represent themselves to a public wary of corporate hijinks and poor decision-making. Add to this a very complex regulatory environment surrounding how businesses in banking industry must monitor and store official communications, and you start to understand why Wall Street has been more tentative than most industries to get with the times.
“Who could blame any firm operating in a regulated industry for taking a cautious approach in the face of all that?” asks social media expert Kip Gregory, principal of The Gregory Group. “Especially in financial services, which is at its core an industry built around the management of risk. The question is: How do you, as a competitor in this business, choose to respond to a clearly shiftin ...
VidenDanmark holdt den 23. marts 2010 møde hos MillionBrains om åben innovation og videndeling. Sam Kondo Steffensen fra MillionBrains fortalte deltagerne fra VidenDanmark om baggrunden for MillionBrains-projektet - og om hvad idéen er med platformen. MillionBrains er rigtig åben innovation - man kan lægge Challenges ud - og alle kan melde sig ind som Brains. På sigt vil man nok være lidt kritiske ift. hvilke challenges, der kan lægges ud. MillionBrains bygger på en teknoligi - der arbejder semantisk - i stedet for søgeteknologi ønskes det modsatte - at informationen kommer til dig - på baggrund af opsamlede data.
You might have thought that mentoring was just
one of those HR trendy tools to attract and retain talents
and to remotivate senior managers in your firm.
Well, think again.
This white paper as been designed to give you an
opportunity to reconsider what you may know, or imagine,
about mentoring...
In it, we will discuss and try to illustrate how corporations
can find a balance between their formal structure source
of efficiency and their informal networks source of agility,
and why mentor / mentee networks are such powerful
cultural game changers.
Author: Stéphanie MITRANO PhD
Similar to Steiber-Silicon-Valley-20160816_FINAL (20)
2. A NEW APPROACH TO MANAGING THE FIRM IN A DIGITAL AGE
EXECUTIVE SUMMARY BERKELEY RESEARCH GROUP
1
Background: Problem And Solution
Companies, like life forms, must adapt and evolve. This is especially true in today’s business world where multiple forces of
change create new possibilities for growth, while existing products can quickly lose market share or become obsolete. And
many big companies are burdened with a basic problem that makes them endangered species. Their management models
are obsolete.
These companies may have progressive features but they’re organized and run as bureaucracies. They have rigid structures
and hierarchies, along with complex rules that prescribe what each person and unit should do and how all should interact.
This Industrial Age model is good for coordinating large groups of people to perform well-defined tasks. But like the steamship
Titanic, it is not designed for pivoting quickly.
Nor does the model allow full use of people’s creative talents. Ideas that depart from established ways of doing things are hard
to implement. The culture rewards people for meeting targets, but often hinders them if they try to meet the company’s most
critical need by developing new paths into the future.
In today’s world, success may “depend very little on the enterprise’s ability to engage in
(textbook) optimizations against known constraints … Rather, enterprise success depends
upon the discovery and development of opportunities.” — David Teece
The current Digital Age calls for a fundamentally different approach to management. Our studies, combined with the insights
of many others, indicate that such a model now exists—and it works. This new model has been practiced and refined over
several decades by various companies in industries from textiles to food processing. We call it the Silicon Valley Model because
it is practiced extensively there.
Silicon Valley is more than a hotbed for startups. The best companies grow and evolve, maintaining their entrepreneurial
nature even when quite large. Google, for example, has grown from a search-engine company to a global leader in areas such
as mobile phone technology and mapping, while also exploring newer fields that have high growth potential.
To learn what enables the company to do such things, our work began with an in-depth study of Google’s management
principles and practices. Then it became apparent that other major companies in the Valley use very similar principles and
practices. These additional “case companies” in our studies include three leaders in personal networking—Facebook, Twitter,
and LinkedIn—plus Tesla Motors, the rising electric-car maker now expanding into storage batteries and solar energy, and
Apigee, a privately held leader in the API business. Following is synopsis of the management model they are using.
Why And How: The Silicon Valley Model In Brief
Our case companies are all built to have qualities called Dynamic Capabilities. According to Berkeley professor David Teece,
the capabilities consist of being highly adept at “sensing,” “seizing,” and “transforming.”
• Sensing “means identifying and assessing opportunities outside your company,”
• Seizing is “mobilizing your resources to capture value from those opportunities,” and
• Transforming is “continued renewal”—that is, constantly re-orienting the company for the next opportunities to come.
3. EXECUTIVE SUMMARY
A NEW APPROACH TO MANAGING THE FIRM IN A DIGITAL AGE
BERKELEY RESEARCH GROUP
2
In evolutionary terms, Silicon Valley firms developed dynamic capabilities because they had to—in their fast-changing ICT
industries, it is the only way to survive—and because the means were at hand: the Valley’s firms have long led the charge in
both inventing and using information technologies, which provide the rapid communication and data analysis necessary to
be dynamic.
Sensing opportunities, seizing them, and transforming the company:
These abilities are essential to entrepreneurial management.
Now that all industries are starting to move at Silicon Valley speed, companies everywhere need dynamic capabilities, too.
Further, the capabilities that Teece identified are also key traits of entrepreneurs: seeking opportunities, being able to “mobilize
resources” around them and to keep reinventing. Thus they are essential for thinking and managing entrepreneurially
in a large firm.
How have our case companies achieved these capabilities? Not by instituting any simple management program, but through
a systemic approach that aligns all aspects of the company toward being, and remaining, a flexible and fast-moving growth
company.
• Culture: Corporate “culture” is more than a soft or elusive attribute. To our case companies, it is their core attribute—a set
of shared values, beliefs, and behaviors that shape how people think and act, and how they create the work atmosphere.
Each firm pays explicit attention to its culture (some have appointed people to titles like “Chief Cultural Officer”), and all
have cultures that are entrepreneurial: core values include innovation and growth, adaptability, speed, a commitment
to doing extraordinary game-changing things and making excellent products.
• People: Whereas it’s common to hear slogans such as “People are our most important asset,” the case companies mean
it. They devote tremendous effort to recruiting the right kinds of people—people who are not only technically skilled,
but a good cultural fit (at Google this quality is called “Googliness”). Then the companies put care into giving these
people their best chance to excel and produce results. Uniformly, the kinds of people deemed “right” are entrepreneurial,
passionate, adaptable, constantly questioning the status quo (a quality emphasized repeatedly!), and collaborative.
• Organizational Structure and Methods: Finally come the aspects traditionally considered to be hard management
science—the design of the company, the processes used to guide and coordinate it. At our case companies these aspects
flow from, and serve, the culture and people. The companies have flexible non-bureaucratic structures, simple rules,
open communications, and they generally use non-authoritarian forms of control.
Let’s take a closer look at the key elements of each. Since culture and people are closely related we’ll examine them together.
A Strong Culture (And The ‘Right’ People)
Each company we studied has its own distinctive culture, but all share certain core beliefs and values. These begin with a
strategic focus on Innovation and Growth. In contrast to bureaucratic firms that are more centered on tweaking each line
of business for efficiency, cost control and profit, the priority here is creating and growing new value streams.
This in itself is a big step toward attracting entrepreneurial people. Many recruits are people who’d typically work at a
startup, precisely for the chance to help create something new, and the case companies court them by pointing out that an
entrepreneurial larger firm can give their work more impact: Facebook informs developers of the number of users touched by
each new product feature. Other key culture elements include:
4. A NEW APPROACH TO MANAGING THE FIRM IN A DIGITAL AGE
EXECUTIVE SUMMARY BERKELEY RESEARCH GROUP
3
A Commitment to Being Extraordinary
A source at Tesla asked, “How will we create different, unique products if we are not different ourselves?” The case companies
are very out-front about proclaiming themselves to be “not an ordinary company”: Google’s founders even put those words in
the prospectus for the company’s IPO, to warn investors that they shouldn’t expect ordinary behavior. One way the companies
then deliver on this is by having big, socially meaningful mission statements—which they actually pursue.
The culture of a company is vitally important. The culture determines what the company
will do, and the kinds of people it can attract, and what they will be inspired to do. In many
senses, the culture is the company.
Google’s mission is “to organize the world’s information and make it universally accessible and useful.” Tesla’s: “To accelerate
the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.” Employees
everywhere are urged think big—LinkedIn CEO Jeff Weiner upped the ante on Google’s “Think 10X” slogan by asking his people
to “Think 20X”—and these are very attractive elements for recruiting people who are passionate about their work and want
to be part of something bigger.
Adaptability
The culture at our case companies is not one of accepting change as inevitable. It is a culture of actively embracing change and
wanting to lead it. This includes being willing to learn on the job, in the course of an unfamiliar new project, which is how a lot
of learning occurs at the companies. Naturally, the companies want people who are highly adaptable, and as one source
told us: “The culture attracts people who are comfortable with being uncomfortable.”
Move Fast; Speed Matters
Time and again, people at the case companies commented on the importance of speed. “Speed is a competitive advantage,”
said one, while another pointed out that speed means more than working overtime to get a product out the door: it includes
“fast decision-making, fast development and implementation.” Moreover: “Speed drives efficiency. We learn more quickly what
is working and not, then make a judgment.”
It was interesting to note that for all our sources, speed was regarded as a positive, unlike at companies where managers
push people to work faster and “efficiency” campaigns are dreaded. Here, speed has been integrated into the culture, and it is
perceived as having many benefits.
A Focus on Product Excellence
“[The goal is] not ‘good enough’ products … [because] then we can’t win”—a person at one of the case companies. The prevalent
belief is that outstanding products are needed in order to literally “stand out” in a competitive market. Tesla’s market-entry
strategy relied on building superb high-end electric cars; engineers and developers at all the companies are fiercely proud of
the products they create, and “product people” are held in high esteem. Google’s new CEO Sundar Pichai was promoted from
Product Chief, and a source at another company said flatly: “The most important people are around products.”
“Good enough” isn’t good enough; products need to be outstanding. And leaders don’t tell
you how to do things; they lead you to find excellent solutions.
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Closely related to this focus on product excellence is the desire to hire people who constantly question the status quo.
Said one source: “The key is to have a team that does not accept current standards but continuously asks the question,
‘If we were to start from scratch, what would we do then?’” No process can be defended by “That’s the way we have been
doing it,” and these companies have a philosophy that’s exactly the opposite of the old slogan “if it’s not broke, don’t fix it.”
Facebook’s mantra is “Move fast and break things”—in other words, don’t hesitate to ditch an existing procedure or product
feature if you have a substantially better idea.
Leaders, Not Managers
The companies expect people in leadership positions to lead by coaching, facilitating, and inspiring, not by dictating and
invoking authority. A number of our sources were eager to elaborate on the difference between the two styles. As one
explained it: A “manager” communicates in one direction, giving directions on what to do and how to do it. A “leader” is a
two-way communicator who listens to his people, and who leads by making larger purposes clear—including “what” needs
to be done and “why”—but leaves the “how” to the team.
This leadership style requires employees who are collaborative, and in the case-company cultures, a collaborative person
is not someone easily persuaded to go along with the crowd. On the contrary, good collaborators are strong-minded people
who know that it takes a team effort to do great things, who are attracted to the company in part by the opportunity to work
with other excellent people —and who have (or can learn) the interpersonal skills to work together effectively.
Organizational Structure And Methods
The dominant organizational form at our case companies is one that emerged in Silicon Valley years ago: a semi-structured,
flat organization with a corporate center, not a pyramid hierarchy of people and units with cascading levels of authority.
In a study of 37 Valley companies in the early 1990s, the scholar Homa Bahrami described them as being like a “federation” or
“constellation” of business units around the center:
The center’s role is to orchestrate the broad strategic vision, develop the shared organizational and administrative infrastructure,
and create the cultural glue … However, these tasks are undertaken together with the line units, rather than for them.
Many of the units today tend to be small teams, working autonomously to a high degree. And, in contrast to companies where
strategic planning is done by high-level planners at long intervals, in Valley firms it is a more frequent (even ongoing) process
that involves many more people. It’s common to learn of strategy reviews being done quarterly or even monthly. A 2011 Forbes
article quoted Google’s then-CEO Eric Schmidt:
We don’t have a two year plan. We have a next week and a next quarter plan. Most of our successful products were built by
small teams reacting quickly.
“Strong hierarchy tends to die”—a case-company source, on why hierarchies should
be avoided
New Approaches to Being ‘Ambidextrous’
An ambidextrous company can work adeptly with “both hands at once,” like a skilled piano player: “exploiting” current businesses
to their fullest while “exploring” new ones. New approaches are needed because the traditional one—having operating units
focus on operations while R&D is done in a research center—has been found to be of limited use. Many Silicon Valley companies
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still have research centers, notably Google, where the X research facility (formerly Google[X]) has housed long-term R&D
projects such as driverless cars and Google Glass. But other approaches are being tried.
Open innovation can help companies to be ambidextrous. Tesla’s cars have been developed through R&D partnerships
with Lotus, Panasonic (for the battery cells), Toyota and other firms. And a well-known internal approach is the 70/20/10
model, whereby employees are expected to devote 70% of their working time to ongoing business or projects, 20% to
related innovation and 10% to exploratory, blue-sky work. This model has limits, too, but it has produced innovations at
Google and elsewhere, and a good project that is launched during 20/10 time can attract additional workers and resources
to help speed it to completion.
Rapid Test-and-Learn Cycles
Here is one source describing a product development process used at all our case companies: “We start small, launch,
see what works, what doesn’t, improve, iterate. Launch fast, don’t do it perfectly.” The approach is similar to Lean Startup,
with minimum viable prototypes tested on in-house users, then externally (if warranted), building toward a full release.
This approach is easily applied to software but it can be used with physical products and services too. Last year Tesla
field-tested its battery-swapping concept at a single roadside station, where customers driving on long trips could have
their depleted battery packs quickly replaced with fresh ones instead of waiting to recharge.
At some companies we studied, it is a goal in itself to make the learning cycles go fast. The most promising ideas can then
move quickly to market while others “fail fast,” and can either be killed or tried in different forms later. In any case, the
company reaches a result efficiently and builds knowledge from the constant experimenting.
Simple Rules and Soft Control
Companies in the Valley tend to have few formal rules and procedures. In one widely reported case, Netflix realized its
employee handbook was far too fat and trimmed it down. The rules for claiming business travel expenses were cut back
to four simple guidelines, starting with “Expense what you would not otherwise spend.”
At our case companies, typically anyone can talk to anyone about business matters, without going through prescribed
channels of communication. Rarely are employees locked into tightly defined roles by job descriptions that specify the
kinds of work they should or should not do—in fact, people are often encouraged to expand their scope, taking on new
challenges. And, although these companies must become more formally organized as they grow, they try to avoid having
bureaucratic structures and procedures that could inhibit innovation. (Google has even launched “bureaucracy buster”
campaigns to identify and get rid of these obstacles when they arise.)
The companies are often described as “semi-structured.” Structures are established where needed to facilitate people’s
work, or to help basic processes run smoothly, and the rest remains flexible and adaptable.
Structure where needed to help people’s work, and simple rules that help them see
how to proceed—two simple rules for building a flexible, adaptable company.
Also, employees are kept on track largely through mechanisms of so-called soft control. Everyone is expected to align with
the company’s mission, and everyone knows the culture’s basic values, such as Google’s famous slogan “Don’t be evil” or
Jeff Weiner’s mantra at LinkedIn to “Get shit done” (that is: don’t just have big ideas, implement them). Almost implicitly,
people keep each other on track by following the precepts and expecting the same from their colleagues.
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Humans are not perfect. Both leaders and employees may, at times, fail to live up to these precepts. But the high-trust, soft-
control approach appears to work at least as well as authoritarian command-and-control, and seems to be much better liked.
Building an Ecosystem, Not Just a Company
Despite the central emphasis on hiring great people, a refrain heard frequently at our case companies is: “We know there are
more smart people outside our company than in it.” Thus the companies engage in open innovation, network heavily with their
surroundings, partner with external entities (universities, startup companies, even competing companies) and take other such
steps to tap talent and ideas from outside.
The whole process is called building an ecosystem, and it is not an entirely selfish process. The external parties benefit from
these exchanges too. Ideally, the company’s entire community benefits—as, indeed, the Silicon Valley region has thrived from
the great beehive of interchange among its companies. Much more can be said on that topic, which is one of many that our
book covers in greater depth. Meanwhile, this summary of the Silicon Valley Model is now complete.
Closing Thoughts
Can the Silicon Valley Model be adopted or emulated by companies of other kinds elsewhere? We argue that it certainly can.
The model itself does not have features specific to the ICT industries. The challenge is that in a company where the model has
not evolved “naturally” from day one, adopting it would entail a very substantial remake of the company. The best approach
might be to start small, applying the model in a single unit or units conducive to it, and then iterating from there. Application
is another topic that our book, The Silicon Valley Model, addresses in more detail.
Bottom line: If one’s company does need to change, simply recognizing the fact is a valuable first step. Many companies haven’t
taken that step. Instead, they continue to tweak the old bureaucratic model with add-on programs and modern enhancements,
believing that this will be sufficient. But it will not. This approach is like trying to keep an old computer for too long, when it
can no longer handle today’s needs. Or, to quote a cliché, it’s like rearranging the deck chairs on the Titanic.
The time has come to fundamentally rethink and redo old ways of managing. The Silicon Valley Model points to a better way.
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THINKBRG.COM
About the Author
Dr. Annika Steiber
Dr. Annika Steiber is a researcher, lecturer and senior advisor in management
and organization. She is an international authority in the fields of Innovation
Management and Management for the Digital Age. As part of her work she
has developed a new Innovation Management curriculum for Santa Clara
University in Silicon Valley and has written several award-winning research
articles and books. Further, she has worked more than 18 years as an executive
and/or board member for both startups and larger organizations. Dr. Steiber is
a Managing Director at Berkeley Research Group (BRG), a global management
consultancy firm founded by thought-leading professor David Teece, the
father of the Dynamic Capabilities concept. She is also the founder and CEO
of the management research company INNOWAY.
Dr. Sverker Alänge
Dr. Sverker Alänge is an Associate Professor in the Department of Technology
Management and Economics at Chalmers University of Technology, Gothenburg,
Sweden. He has a PhD in Industrial Management and an MS in Mechanical
Engineering. Dr. Alänge’s research interests are innovation and change
processes in firms and innovation systems, entrepreneurship, and sustainable
business development.
About Berkeley Research Group / S3
BRG’s Strategy advisors provide evidence-based, theory-informed, and insight-
driven strategic advice in many of today’s most challenging sectors, and help
leaders define, build, and execute strategies in a variety of business contexts.
Using the dynamic capabilities framework, forged over three decades in the
epicenter of innovation, we help organizations master the art and science of
agility. BRG’s S3
empowers organizations to become perpetually disruptive. It
pushes them ahead of the competition and puts them in command of market
uncertainties by enabling them to sense opportunities, shift resources, and
seize the advantage.
Named by Forbes as one of America’s Best Management Consulting Firms
in 2016, BRG is headquartered in Emeryville, California, with offices across
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East and the United Kingdom.