“ “ The Living The Living Company” Company” by Arie De Geus by Arie De Geus Harvard Business Review (March Harvard Business Review (March 1997) 1997) Presented By: Takbir Ahmed Biswas Lynn Blankenstein Lexi Gray Norawit (Travis) Virunkitkoson Yixiong (Kyle) Zou
22
Embed
“The Living Company” by Arie De Geus Harvard Business Review (March 1997) Presented By: Takbir Ahmed Biswas Lynn Blankenstein Lexi Gray Norawit (Travis)
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
““The Living The Living Company”Company”by Arie De Geusby Arie De Geus
Harvard Business Review (March Harvard Business Review (March 1997)1997)Presented By:
Takbir Ahmed BiswasLynn BlankensteinLexi GrayNorawit (Travis) VirunkitkosonYixiong (Kyle) Zou
What is a corporation?What is a corporation?
• Defined as:
“a large company or group of companies, recognized by law as a single unit.” ~Oxford Dictionary
• Described as:
An organization that is viewed as a “community of human beings that is in business – any business – to stay alive.” ~De Geus
What is a living What is a living company?company?
Life Expectancy of a Life Expectancy of a corporationcorporation
• Average life span is less than 20 years
• Examples that show that a corporation can be in business for as long as several hundred years
Why is there such a Why is there such a discrepancy?discrepancy?
• “Living companies produce goods and services to earn their keep in the same way that individuals have jobs in order to live”
~De Geus
Living CompaniesLiving Companies
•Very good at managing for change in the marketplace
•Understand:–Who they are–How they fit into the world–The value of new ideas and people
Conservatism in FinancingConservatism in FinancingWhy do they survive so long?
•Concern about “Safety” of Capital
•Avoidance of unnecessary expenses
•Belief in the Value of money in Old fashioned way
•Tendency of saving extra cash as back-up to avoid investors
Sensitivity to the World Around Sensitivity to the World Around ThemThem
•Adaptable to changes•Forecasting of future•Comparison of Past, Present
and Future•Reaction to “Whatever was
going on”.
Awareness of Their Awareness of Their IdentityIdentity
• Employees felt like Parts of a Whole
• “Fleet of Ships”• Managers in the Living
Companies were chosen mostly from within
• The First Priority: To maintain the company’s health
Tolerance of New IdeasTolerance of New Ideas
• The Manager must:The Manager must:– Understand the values and Understand the values and
traditions of the companytraditions of the company– Keep the company aliveKeep the company alive– Let people grow within the Let people grow within the
communitycommunity– Place commitment to people before Place commitment to people before
assetsassets
Valuing People, Not Valuing People, Not AssetsAssets
• 27 long lived companies changed business at least once
• Scuttle assets to survive• Assets and Profits are
necessary, but not purpose of life
Valuing People, Not Assets Valuing People, Not Assets (2)(2)
• Companies with different model• Scuttle people to survive• Purpose: to make profits for
shareholders• If in trouble, get rid of people
Loosening Steering and Loosening Steering and ControlControl
Managers must:• Heed opinions and practices of
other people• Give people space to develop
ideas • Take risks with people
Loosening Steering and Control Loosening Steering and Control (2)(2)
Metaphor of Rose Gardening• Prune roses: hard or long ?• Hard: have the biggest roses in
neighbourhood in June (high risk)
• Long: have roses in every June
Why learning is essential
• Circumstances change• Living companies also
change
Organizing for LearningOrganizing for Learning
Conditions of organizational Conditions of organizational learninglearning
• Numerous individuals• Some of whom are
innovative• System supports
Organizing for Learning (2)Organizing for Learning (2)
How living organizations How living organizations learnlearn
• Birds that flock learn faster
• Developing programs
Organizing for Learning (3)Organizing for Learning (3)
The Human ElementThe Human Element
• It is a choice
• Focus on going from one generation to the next
• Level of involvement and a sense of belonging are important
Puddles or Rivers?Puddles or Rivers?
• A company must focus on smooth transitions between generations
• People need to enter and exit the company with the right understanding
• Need to be able to let go and understand ‘fit’
Passing the BatonPassing the Baton
• Strict exit rules
• Stewardship is important as one person exits and another comes in
• Important to understand the nature of the company
ConclusionConclusion
• Mobilizing the disposable intelligence
• High levels of tolerance are important
• Important to brain-rich and asset-rich companies