clair015

Have you ever worked for a company that changed its structure, and you couldn’t figure out why? Me too. Ages ago I was working for a consulting company which was organised by “function”: consultants were grouped into departments defined by “strategy”, “operations”, “HR”, etc. But then the company decided that they really should be organised by “industry”, that is, group its employees into a division for fast-moving consumer goods, a division for government, heavy industry, professional services, etc. And when people would ask “why?”, the company’s management would come up with quite convincing answers why it was beneficial for consultants working on the same type of customer to be grouped together. And people shook their head in reluctant understanding and grudgingly eyed up their new colleagues. But I couldn’t help but think “I could come up with equally convincing reasons for why this company should (still) be organised by function”. And that is usually the case for organisations. Fo...

You never heard of patent sharks?! You’re kidding, right? Ok, I’ll admit it, I had never heard of them either. But they sound pretty scary, right? Well… ok, perhaps not; the word “patent” sort of seems to take the edge of the word “shark” a bit. Yet, now that I have learned more about them, I have to admit, I am starting to believe that they should send some shivers down your corporate spine; they really are quite creepy. My colleague at the London Business School, Markus Reitzig , has been studying patent sharks at length. I always found IP (intellectual property) a bit of a bore when it comes to research topics but, admittedly, his research did remind me of Jaws III, but then with briefcase, pin-striped suit and, importantly, a mob of solicitors to accompany him. Let me explain. As you may know, when it comes to the effectiveness of patents, pharmaceuticals are a bit of an exception. In most industries, patents provide only very limited protection against imitation by competitors. Us...

The line above probably didn’t mean much to you, unless you’re Dutch. No I am not getting a commission for rehashing their old marketing slogan (which it is; I guess you could translate it as “heavenly, clear, Heineken”), it just reminds me of the acquisition strategy they used under the reign of their illustruous former chairman Freddy Heineken (who unfortunately died a few years ago). Since I have been known to sound slightly sceptical (yes, this is a good english eufemism) of the vehicle of corporate take-overs, people sometimes ask me which company’s acquisition strategy I actually like… A painful silence (to this fair question) used to ensue. But no longer! Since I didn’t want to create the erroneous impression that I think all acquisitions and acquirers are bad, I decided to look for one. And I found Heineken . It happens to be a product that I studied extensively during my student days but some time ago I also really dug into their past acquisition strategy, and whether it made ...

Management by Objectives, Zero-based Budgeting, T Groups, Theory Y, Theory Z, Diversification, Matrix Organisation, Participative Management, Management by Walking Around, Job Enlargement, Quality Circles, Downsizing, Re-engineering, Total Quality Management, Teams, Six-sigma, ISO9000 and Empowerment. Surely you must have been subjected to some of those? Most of them have fallen out of favour again. We call them Management Fads. But do they do anything? Well… the answer is yes, but perhaps not what you’d expect them to do, or least what they are intended to do. Professors Barry Staw and Lisa Epstein, both from University of California in Berkeley, through careful statistical analysis, examined some of the consequences of organizations’ adopting such techniques on a variety of factors. They collected data on exactly 100 Fortune 500 companies, including their adoption of quality techniques (such as Total Quality Management), teams and empowerment, the company’s reputation (through Fortun...

It’s becoming a bit of a corporate buzzword – “innovation networks” – but one that (to my slight disappointment) I actually quite believe in. More and more companies I see and talk to seem to realise that it is quite difficult to be innovative on your own. For true innovation, almost by definition, you need a wide variety of capabilities, knowledge and insights. It is just difficult to find such diversity within one organisation. If you, as a firm, are trying to come up with fundamentally new things, you would likely do well to also look outside your own organisation’s boundaries, whether anyone knows anything that just might be useful and interesting for you. This is what “innovation networks” are about; combining and tapping into other companies’ knowledge resources to, collectively, come up with something that neither firm could have done by itself. IBM , for example, does it consistently and in a highly structured way. They work with specific partners on specific projects. Some of ...

Boards of directors, in various countries and systems, lately have been subject to considerable frowning, loathing, smirking and indecent hand gestures. “They’re all part of the same elite”, “corporate amateurs”, “never really objective”, “not really independent”, “an old-boys-network”, etc. etc. Surely, it is said, those directors that are pretty much personal friends of the CEO will be quite useless; they will just protect him and never really be critical, asking the nasty and awkward questions they should be raising. Yet, is this necessarily so? Are “friends” bad directors? Professor James Westphal , of the University of Michigan, became sceptical of the sceptics. He investigated whether social relations between board members and CEOs really are as harmful as assumed. He extensively surveyed 243 CEOs and 564 of their outside directors and examined whether personal friendships and acquaintances made for less effective board members. First of all, he found that the boardroom friends h...

About a century ago, the Fore people, who inhabited Papua New Guinea , had the habit of burying their deceased relatives, just like many other societies. Yet, on some sunny day, Uncle Ed died, and it was just around lunch time. Uncle Ed’s relatives were about to put him into the ground when one of his cousins (who looked particularly hungry) said “why bury all that good meat; it’s a waste; we might as well eat it”. And so they did. When the following month another relative died, they did the same thing, and not for long, the whole village was eating their deceased relatives, rather than putting them into the ground. The advantages were obvious; there had actually been quite a bit of famine and malnutrition among the Fore people and this habit enabled them simply to not be so hungry. Some time later, a visitor from a neighbouring village witnessed the practice. When he got home and his cousin died, he quickly convinced his relatives to rather than bury the good chap, consume him on the ...

Some time ago, I interviewed a guy called Al West. And Al is quite a guy. Not only because he is the founder and CEO of SEI , an investment services firm headquartered in Oaks, Pennsylvania, which is worth about 4 billion (of which he still owns about a quarter) but because of the way he runs his company. For example, I asked for the contact details of his secretary to put an appointment in the diary. He doesn’t have a secretary. Actually, he doesn’t even have an office. And when I went to their London office to speak to him, reported at reception and asked for Al West, the lady behind the desk said “Who? Al West you say? Let me see if we have anyone in this company by that name”. Al doesn’t strike me as the stereotypical autocratic, macho CEO. What Al does strike me as – and which is the reason why I wanted to talk to him – is a “serial changer”; or at least that is how one of his employees described him to me. He is altering his organisation – in terms of its structure, incentive sys...