In the context of the rapid rise and popularity of digitalization, enterprises are gradually embedded in a variable, uncertain, complex and vague business environment. How to adapt to the external environment and achieve continuous competitive advantage upgrades in the digital age has become a key issue for enterprises to achieve success. Silicon Valley enterprise management model provides a reference sample for this issue. Based on existing research literature and field research in Silicon Valley, "Silicon Valley Secrets" written by Steber and Olinger focuses on deciphering the mystery of the success of Silicon Valley enterprises, deeply explores the common advantages and successful experiences behind the innovation and entrepreneurship of Silicon Valley enterprises, explores effective management models for enterprises, and thus contributes insights to the acquisition and upgrading of enterprises to achieve sustainable competitive advantages.
Read through this book, the success of many Silicon Valley companies can be summarized as follows.
01 Six principles
State of Silicon Valley enterprises have always adhered to six basic principles, including dynamic capabilities, changing organizations, people-oriented, dual-organization, open organization and systematic approach to establishing connections with the surrounding environment. These principles are widely regarded as effective principles for managing organizations in a rapidly changing environment. There is no universally applicable success "formula" for how to use these six principles. Different companies may have different rankings of importance for these six principles.
02 Entrepreneurship
Entrepreneurship is considered the core of the successful model of Silicon Valley. This book traces and extends the entrepreneurship spirit. The entrepreneurial spirit in a narrow sense is innovation and entrepreneurship. Richard Cantillon first mentioned the word "entrepreneur" in the "Essence of Business" published in 1755. He noted that while any activity is risky, most economic actors will roughly know their expected returns before engaging in a job or trading. Entrepreneurs are more willing to try something adventurous and will get a “uncertain price” return when they convert goods or materials that “pay fixed prices” into brand new end products. A century after Etiron, French economist Sai added more to this view, describing entrepreneurs as people who "transfer economic resources from low-productivity areas to high-productivity and high-productivity areas."
At the beginning of the 20th century, economist Schumpeter further supplemented the entrepreneurship spirit. He pointed out that the function of entrepreneurs is to reform or innovate production models by developing a technology, or by using a broader range of untested technical possibilities, or by opening up a new source of material supply or new product sales channels, or by reorganizing an industry, etc. This function produces the “creative destruction” that economists focus on describing, which replaces old ways of doing business and old ideas about the types of businesses that can be operated.
From the continuous development of the above entrepreneurship spirit, it can be seen that entrepreneurship is usually not only composed of incremental innovation, but also gradual steps are also important. Therefore, in my opinion, entrepreneurs in the new era are people who create and utilize business opportunities, serving customers in new ways and creating new value.
03 Silicon Valley model
takes the spirit of innovation as the core. The Silicon Valley model attaches importance to the power of management innovation, deeply applies the entrepreneurial spirit to enterprise management, cultivates and absorbs outstanding talents, creates an organizational culture that adapts to environmental changes and management innovation, carries out guidance for entrepreneurial activities, and establishes dynamic and entrepreneurial enterprises.
This book, based on tracing the evolution of corporate organizations, regards the Silicon Valley model as based on what was called the flexible organizational model in early research. Based on the author's understanding of the case companies surveyed so far, based on the systematic approach of the company's organization, it is believed that an organization should be regarded as a system with many interdependent elements (Figure 1).
Figure 1 A visual company system organization (Image source: "Silicon Valley Secret")
Based on the above analysis framework, the Silicon Valley model can be regarded as a management system, where each element revolves around the central strategic intention (Figure 2). The entire management system is dynamic and embedded with dynamic capabilities.All elements work together, circulating around the central intention of growth and innovation, constantly adjusting and supplementing, so that the organization continues to move forward in the ever-changing trend.
Figure 2 Silicon Valley Model (Picture Source: "Silicon Valley Secret")
04 The difference between Silicon Valley Management Model and the traditional management model
0 The author compared the Silicon Valley model with the organizational bureaucracy (that is, the traditional management model) described by Mintzberg in his 1980 study review of organization design , and conducted further discussion (Table 1).
Table 1 The difference between Silicon Valley management model and traditional management model (Picture source: "Silicon Valley Secret")
05 The enlightenment of Silicon Valley model
Silicon Valley’s successful experience gives us important inspiration:
(1) We need to pay attention to the cultivation of entrepreneurial spirit. This is not the usual meaning of starting a new company, but the creation of new business opportunities and new customer value needs.
(2) It is necessary to pay attention to the dynamic capabilities, management changes, people-oriented, flexible organization, environmental friendliness, entrepreneurial culture, system capabilities and other elements of the enterprise
(3) The core is to pay attention to talents. Talents with core qualities are the cornerstone of the success of the enterprise.
(4) Entrepreneurship and corporate management should be integrated.
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