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 / Summer 2006 / Issue 43(originally published by Booz & Company)


Recent Research

The signature processes they identified at these companies are quirky and individualistic. They also fly in the face of conventional wisdom. After all, tying up top management in a daily meeting as the Royal Bank does might appear to be a poor use of resources. But Professors Gratton and Ghoshal argued that such processes are so deeply embedded in the organization’s culture that they “serve as one of the crucial links between the processes of the organization and the vision, values, and behaviours of top management, and the processes are imbued with energy and passion.”

Another example is the frequent weekend restructurings at Nokia. Employees return to work on Monday to find that they are in new business groups — though working relationships often remain the same. This tradition appears dramatic and potentially counterproductive. Not so, said the authors. They observed that Nokia’s success has to a large extent been built on the use of structural modularity in its technological development. This means using common platforms and standardization to develop new products based on existing products. Nokia applies the same logic to its organization design: It places workers in modular teams that can be seamlessly plugged into any part of the organization to meet changing corporate and customer needs.

The chief signature process at energy conglomerate BP is the support that business unit heads are expected to give to their peers in other departments, especially those who are underperforming. A significant portion of the bonuses earned by heads of successful business units is dependent on their improving the results of weaker segments. Toyota’s signature process — lean production, emphasizing adaptability and eliminating waste — was ultimately transformed into the automobile industry’s best practice.

Identifying and adopting best practices is a critical managerial task. But Professors Gratton and Ghoshal concluded that potentially just as important is the job of rediscovering an organization’s heritage, core values, and internal operations — in other words, the signature processes — about which people are most passionate. The authors admitted that signature processes can be “ephemeral,” but they are also indispensable. They create a link between a company’s goals and its values; that connection, in turn, energizes the company and provides meaning for its culture.

Lessons of Japan
Kimio Kase ([email protected]), Hernán Riquelme ([email protected]), Francisco Sáez, and Katsuyoshi Kutsuwada ([email protected]), “Transformational CEOs,” Nanyang Business Review, vol. 4, no. 1. Click here.

The remarkable rise of the Japanese economy in the 1970s and its subsequent stagnation in the 1990s have been well documented. Along the way, Japanese management lessons were first lauded and then largely discarded by Western academics. But today, some Japanese executives are attracting renewed attention for the strategic techniques they use to thrive despite the bumpy business environment in Japan.

Kimio Kase, associate professor at the Spanish business school IESE and Educatis University in Switzerland; Professor Hernán Riquelme, of RMIT University in Australia; Francisco Sáez, professor at the University of Castilla–La Mancha in Spain; and Katsuyoshi Kutsuwada, an executive at Sony Corporation, Japan, studied the CEOs of five successful Japanese companies. In examining the activities of Norio Ohga of Sony; Masamoto Yashiro of Shinsei Bank (the reincarnation of Long-Term Credit Bank of Japan Ltd., which collapsed in 1998); Carlos Ghosn, who turned around Nissan Motor Company; Masao Ogura of Yamato Transport Company, which pioneered courier services in Japan; and Chihiro Kanagawa of Shin-Etsu Chemical Company, the authors found that these executives principally relied upon two distinct mental models for making decisions.

The first is based on something the authors call a proto-image of the firm (PIF), which is a strong, if sometimes abstract, image or vision of what the company stands for. Norio Ohga, CEO of Sony from 1982 to 1994, used a proto-image to move the company forward in an unwavering direction after he took over from the original entrepreneurial founders. The proto-image likened the company to the Chinese character san, which means to shine dazzlingly like the sun. It emphasized Sony’s uniqueness; at new product planning meetings, Mr. Ohga insisted that all Sony products have extra qualities that would make them worthy of the company’s logo.

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