Will “Built to Last” really last?

Individual Assignment II by Sofia Strandell

During the 1980’s, Jim Collins and Jerry I. Porras asked themselves the questions: “What makes truly exceptional companies different from the other companies?” and “How were these companies originally built to be able to last for a long time?” Their research began in 1988 and it was not until six years later that they could publish their book “Built to Last – Successful Habits of Visionary Companies”. In the book, Collins and Porras investigate 18 truly visionary companies; companies that are premier in their respective industry and have a long successful history. The authors evaluate these visionary companies with respect to 18 comparison companies; companies that have a similar background, but never managed to reach the same status. In “Built to Last”, the following conclusions about the features which made the visionary companies more successful than the comparison companies are made:

 

–        Visionary companies are devoted to clock building – and not time telling; in other words, they focus on building long-lasting corporations and not as much on current operations. According to this conclusion, having charismatic leaders and great initial products and ideas are not necessarily important for building great companies.

–        Visionary companies embrace the Genius of the AND; for example, they think long-term AND short-term, they preserve core values AND make bold moves to stimulate progress.

–        Establishing and maintaining core ideologies is essential; visionary companies preserve core values and purpose, and they keep everything else changeable.

–        Having Big Hairy Audacious Goals, or goals that seem extremely hard to reach, are often used with positive effects; it keeps the employees motivated and enthusiastic.

–        Building a cult-like corporate culture makes the employees devoted to the company.

–        Visionary companies often try a lot of stuff and keep what works; they take risks and do not fear mistakes.

–        Visionary companies use home-grown management; they recruit top managers from within the corporation.

–        Finally, visionary companies always strive to perform better.

 

This report will discuss whether these results are useful or not in the information society of today. In other words, this report will analyse if the book and its conclusions really were built to last, or if their significance has diminished during the 14 years that have passed since the book was published.  

 

“Built to Last” was written a short time before the growth of the internet exploded in the middle of the 1990’s, a phenomenon that gave the word “information society” its true meaning. Certainly, this fact has caused enormous changes in the business world; millions of new internet and/or computer based corporations have been established ever since, and large companies that initially were not connected to the world of internet are definitely connected today. However, “Built to Last” only covered the fundamental management principles, and the use of the internet should not have changed them, according to the authors’ claim of finding the timeless standards of successful companies. 14 years have passed since this statement was made, and it turns out that a few, minor adjustments, mainly regarding marketing management, may need to be made to the management principles due to the rise of the information society.

 

 

The internet has enabled rapid distribution of an enormous amount of information about companies. Information is passed on instantly to people all around the world, and therefore internet is an important factor of globalization. Globalization, in turn, has large impacts on marketing matters; since humans are receiving more information from numerous different sources during a short period of time through the internet, marketers have to find new ways to catch people’s attention in order to create public interest. Nowadays, an increased focus on marketing management has been observed; marketing is becoming a more and more important part of the strategy within all companies, something that is stressed by marketing management guru Philip Kotler (2007). Corporations that embrace innovative, internet based marketing methods benefit from the information society, while companies that do not make efforts to keep up with the internet era tend to be forgotten about. Therefore, the conclusion that the expansion within the marketing business has been enormous during the past 14 years due to the rise of the internet can be made. Additionally, different methods of marketing have turned out to be important tools in building successful company strategies, and it is likely that among all new companies that are established today, those that have successful marketing strategies from the beginning will outlast those without.

 

In “Built to Last”, one of the most controversial statements is made in an early chapter; having great initial ideas and products and charismatic leaders are not necessarily important for building a visionary company. Instead, it is the company itself that is the ultimate creation. This conclusion is somewhat problematic; certainly, emphasizing the company itself is essential, as the company is meant to outlive the CEO as well as the products. However, great initial ideas and products, and charismatic leaders, yield enormous marketing advantages toward other companies, a fact that has become clearer since the information society was established. For example, information is nowadays spread via blogs, word-by-mouth, advertising and other means of communication on the internet, and if a great product is introduced on the market, geographical distance will not stop people from buying it online. Furthermore, the internet enables marketing methods that make people become interested in new companies before they are even announced. An example of this is the newly introduced Swedish company Spotify which spread its concept “A World of Music” through channels such as blogs and word-by-mouth before it was announced to the public. Such marketing methods demand great initial ideas and/or products. Finally, managers that have charismatic leadership styles tend to be looked upon as heroes, as defined by Weber (1947). Such managers are used by the marketing business to promote companies; nowadays leaders such as Jack Welch (former CEO, GE) and Steve Ballmer (CEO, Microsoft) become celebrities and video clips of their speeches are spread online, thus creating a public interest for the company.

 

 

It is difficult to criticize the principles that were established by Collins and Porras as their book is still considered to be important within the business literature, and their findings are widely accepted in the world of management. Their results are logical and reasonable; many of their guidelines have been used in other business literature, implying that their findings are significant. For example, one of the final conclusions is that visionary companies strive towards continuous improvement; a principle which is denoted as the Japanese Kaizen philosophy in many other business books and first became famous through Imai (1986). However, business and management has changed considerably since 1994 when the book was written, and even more since 1897, when the average visionary company was founded. The information society has changed how humans perceive and experience companies. Therefore, other principles may be of equal importance compared to those defined in “Built to Last”. One such principle is marketing, and it is likely that the new companies that will be defined as visionary in the future are those companies that succeed the best with their marketing strategies today. Hence, the conclusion is that “Built to Last” indeed is built to last, but a few alterations may need to be made to the set of management principles in order to adapt to the information society of today.

 

References:

Imai, M. (1986) Kaizen: the key to Japan’s competitive success, McGraw-Hill

Kotler, P. (2007) A Framework for Marketing Management, Prentice-Hall

Weber, M. (1947) Model of Transaction and Transformation Leadership

Is that really management?

So here it is, our movie about Management through Surveillance!

Management through Surveillance

Optimizing Performance and increasing Security?

To view the video in higher quality, use this link and click “watch in high quality” below the status bar..

http://youtube.com/watch?v=pIdZrA4Fdxg

Promotional text

Introduction

Surveillance and monitoring of individuals is a current topic in today’s society. Governments and private companies use different methods for observing and mapping the lives of each inhabitant; including surveillance cameras installed in public and private areas, computer programs that store various kinds of information, GPS-systems that can follow every move one makes, etcetera. The possibilities for developing further techniques which allow governments and organizations to keep detailed personal records are practically unlimited. This development may be seen from a positive perspective; it enables thorough surveillance and control of suspected terrorists and other criminals, however, it may also cause serious damage on the personal integrity of law-abiding individuals.

The purpose of the film “Management through Surveillance” is to create discussions about this increasingly monitored society and how it affects management concerns. Such concerns involve how managers, employees, and inhabitants in general are affected by the expansion of the so called big brother state. The film explains managerial aspects on a governmental as well as a corporate level. This text discusses the history of surveillance and gives a picture of the situation today. It furthermore goes deeper into the connections to management, which are shown in the film. Positive and negative sides of the surveillance, people management and motivation theories are connected and compared to the trends of today and divided into two groups: governmental and corporate surveillance management.

History of surveillance

The history of management through surveillance is far-reaching, with roots in the 18th century. The film displays some milestones in the history, beginning with the concept of “Panopticon” which was initially mentioned by Jeremy Bentham in 1787. Panopticon is a type of prison building in which all prisoners can be monitored by one single observer and it is seen as the ultimate form of supervision. In 1948 writer George Orwell writes his renowned book “1984”. The book is based on a vision of a totalitarian state run by one single party that constantly monitors everybody. In “1984”, Orwell established the expression “Big Brother State” which has been used in several contexts ever since. The first technical advances mentioned took place during the 1960’s when the first analogue video surveillance cameras were installed at public locations. During the same decade, some companies who faced robberies, such as banks and minimarkets, also started to use surveillance cameras. Further historical technological progresses regarding video cameras are not discussed since it is assumed that the viewer is familiar with digital cameras and other advancements. Instead, the film shows the importance of philosopher Michel Foucault who wrote “Surveillance and Punishment” in 1975, and the ending of the Stasi-era in 1989. Furthermore, the escalation of the information society in which the internet plays an enormous role is displayed, and the film’s historical background ends with a notation on the FRA-law in June 2008.

Today’s situation

The debates regarding surveillance in Sweden reached a peak in June 2008 when the so called FRA-law, which allows signals intelligence of private communications, was passed. People fear that this law will impose on personal freedom, and that it is one step closer to obtaining a fully monitored society. Installing surveillance cameras at public locations have always been assessed critically for the same reason. These discussions tend to efface eventually, as arguments about increased national and personal security win in the end. A topic which often is forgotten about however, and which holds a number of quasi managerial connections, is the monitoring that occurs at workplaces and at the internet. For example, many corporations have started to use computer programs which monitor the employees’ internet use and enable the managers to read all e-mails sent and received by their subordinates. Furthermore, web pages such as Google, Facebook and MySpace store large amounts of more or less private information, and modern cell phones have the capability of capturing pictures and videos of virtually anything that happens at all times. Even if it is optional for an individual to work for a particular corporation, or to visit certain web pages and sign up for membership at web communities, the increasing intrusion on the personal integrity is obvious and need to be emphasized and questioned to a greater extent.

Managerial views on surveillance

The film connects surveillance with management issues in several ways. Camera surveillance does enhance safety since it helps identifying and catching culprits in case of a crime. However, the film is produced from a managerial point of view and effects of surveillance that are unrelated to management will therefore not be further discussed. The basic assumption is that surveillance does manage everyone involved; on a governmental level it affects all inhabitants, and on a corporate level surveillance has an effect on both managers and employees. On the governmental level, the primary function of management through surveillance is that it motivates people to remain law-abiding. Camera surveillance, tapping devices and computer monitoring are intended to scare people off from committing crimes. On the corporate level, managers may use camera and/or computer monitoring of subordinates to keep track of their actions and to make sure that they follow rules. Moreover, the employees receive an incentive to work harder by knowing that their managers are watching them. Productivity and time efficiency may thus rise due to surveillance.

Management through surveillance has a number of negative effects, though; mainly since it focuses on hard values and the underlying outlook on people implies that everybody is lazy and dishonest. On the national level, inhabitants may feel followed by the government or feel that their personal integrity is at stake. If citizens feel that politicians try to manage and interfere with private lives too intensely, the worst case scenario would involve people leaving the country. Within an organization, similar explanations apply for employees, and they might resign if they experience that the manager’s lack of trust is too severe. Additionally, management through surveillance might cause doubts regarding the ethics within an organization, especially if the knowledge about the monitoring is limited among the employees. It may cause ethical difficulties for middle managers who are not in the position to make decisions concerning a surveillance system. They might feel that they are intruding on the personal life of his/her subordinates, and they might not desire detailed information about the employees’ actions.

The paradox

During the research and making of the film, several connections to previous knowledge about management and motivational theories have been made. First, it has become clear that management through surveillance is primarily associated with a strongly hierarchical organization in which the employees are steered by money and obligations, and not by personal desires and development. It is difficult for a manager to apply a participative leadership approach while monitoring the employees at the same time. From the employees’ point of view, it would be contradictory to feel the lack of trust that surveillance is causing, and still be in close contact with the manager and to take large responsibilities.

Here an important issue and paradox needs to be thrown light on. Surveillance techniques are developing rapidly and more and more corporations use them. Management through surveillance can at the same time be seen as a step backwards in the development within the management topic; the movement towards liberate organizations with soft management values is clearly held back by monitoring. Taylorism, at its peak, implies that workers need strong control, which commonly is supported through a hierarchical structure. This line of thinking diverges strongly from today’s decentralized trend of the knowledge society.  Foucault’s theory on power and knowledge, saying that power comes from knowledge, as described by David Sköld (2008) are surely applicable in the surveillance question. Power can of course be exercised on the subjects, represented by the citizens on the governmental level and the employees on the corporate level, through collection of knowledge about them. But this non-trusting view on the mankind does not fit into the modern knowledge society. Loosing the trust of corporations’ biggest asset, the employee, will cause severe damages for a firm. At the very end, this risk can be derived to motivation among the employees.

Mainly the motivation theory X and theory Y, established by Douglas McGregor in the 1960’s are looked at. According to theory X, employees are lazy and would not work if they did not have to. In this theory, subordinates need close supervision and control, which is precisely what management through surveillance is all about. The involvement of Taylor’s thinking is obvious. In theory Y, employees work because they want to. Workers are motivated by ambition, freedom and creativity, and strict control may even harm the accomplishments.  According to theory Y, management through surveillance would impede a corporation from developing successfully. It can be assumed that we are moving in the Y-direction, which is supported by the reasoning about soft values and knowledge society, as presented above. Further on the new Generation Y, as described in the film, have characteristics reminding of the theory Y personality. These facts exemplify the paradox. Is employee surveillance really applicable on the new type of people management and on the next coming generations? And is Management through Surveillance really management??

Film

The film is awaiting final approval and will soon be published here on our blog…

/Calle

My last post…

…is my Individual Assignment 1. Just follow the link

Inhumane surveillance and management

Inhumane surveillance and -management

Why so few?

Great point there Jakob. It is almost frightening to think of the almost non-existing amount of female management theorists, who have been given a seat around the big management-guru-table…

What hits me when reading your post, is how small the list of “big theorists” really is.

Machiavelli,
Fayol,
Taylor,
Weber,
Follett,
Maslow,
Drucker,
Hofstede,
Mintzberg
and Senge

After some weeks of intese search for ideas to the movie and to the individual assignments, it can be established that the guys above have given us a huge part of the ideas used today. Why is that? How come these people are so famous? Are they so much better than the other 99 % of the management theorists, and most of all: have they all come up with their ideas alone? How big is the cooperation between them? Did Maslow contact McGregor in oder to get feedback on his motivation theory and vice versa? And did Herzberg call McGregor and ask for advice before he launched his two-factor theory? I am very interested in these relations between guys, who obviously are doing the same thing, but with small variations.

Thanks David, by the way, for letting us write another couple of days. Will publish my first text today. Over and out

More on female management thinkers

You make a great point Sofia in your post “Some words on a completely different matter…”.

I really can agree, haven’t gone throught any female names in most of the texts I have read.

I agree with your thoughts about that the situation now days is changing.  Still thinks Sweden is way ahead compared to almost all other countries though. In the future I think we will see both more female management thinkers but also a lot more female leaders and managers that will influence new ways of thinking and manage.

I found a great text about management thinkers for the 21st century? (from www.employment-studies.co.uk)

In it it says that:

“Female management thinkers are
unusual – but this may change,
given the current emphasis on
softer, people-orientated skills.”

The text gives a brief introduction to (I really recommend it for an overview) of the management thinkers;

Machiavelli,
Fayol,
Taylor,
Weber,
Follett,
Maslow,
Drucker,
Hofstede,
Mintzberg
and Senge

The only female listed is Mary Parker Follett (1868–1933)
Follett suggested that organizations function on the principle of power “with” and not power “over. She meant that dynamic aspects of the individual in relationship to others are mainly important to think of for a manager.

These ideas I can really apply on typical Swedish management style. I can agree that female leaders are better in softer, people-orientated skills and that these type of skills are really important in most cases of management.

Here is the link to the document described above www.employment-studies.co.uk/pdflibrary/a_tj0305.pdf

So keep on thinking Sofia and you will be the next big shot!

/Jakob

link suggestion.

http://www.panspectrocism.org/

Quite an interesting blog about surveillance for you to check out.

Deadlines…

David,  

inte för någon medlem i våran grupp har det framkommit att alla individuella uppgifter skall lämnas in senast sön 26/10. Självklart har vi haft detta som riktlinje men inte som deadline.

 

Vi lägger nu allt vårt krut på managementfilmen samt tentor i andra ämnen och önskar därför att få arbeta med våra texter även nästa vecka för att kunna skriva och lämna in dem så kvalitativt som möjligt.

 

Är det okej att vi sätter en deadline till fredag 31/10?

 

/Perspectives on management

 

 

Minzberg and Gosling

Read the text from the two gentlemen above, presented on Davids blog. It kinda says: “Being manager is really difficult. You practicly need five brains. You need: self reflectiveness, but at the same time analytical skills. You have to be collaborativ but also capable of taking action on your own. On top of this you need to be sophisticated and have experience”

I would not be a good manager today because:

- Lack of experience and therefore a lame worldly mind-set

- Difficulties balancing my own actions and my collaboration

But: I am obviously self reflecting, and what you do not have today can be won tomorrow!

See you tomorrow