Everyone seems enamored of Silicon Valley. It has certainly spawned much new technology and created vast wealth. As a consequence, many executives visit Silicon Valley companies, read books about them and seek to copy the Valley’s approach to management. But as high-tech commentator Esther Dyson has perceptively noted, although Silicon Valley is good at generating new technologies quickly, it has been much less successful in building sustainable organizations or in using sound management practices. So, before you rush to copy the Silicon Valley approach to management, a word or two of caution seems in order.
Silicon Valley’s Approach to Management
What is Silicon Valley’s approach to management? In general, it encompasses four practices. First is the free-agency model of employment, featuring relatively little commitment on the part of companies to their people or vice versa. Individuals are expected to watch out for themselves (the term at Sun Microsystems is “career resilience”) and move on at a moment’s notice. Labor mobility and limited attachments are expected and accepted.
Second is the extensive use of outside contractors, even for hardware and software development. The Valley may be the home of the virtual or almost virtual company.
Third is the use of stock options as an important form of compensation. Stock options are used even by companies in relatively staid industries, such as the manufacture of tamper-evident bottle caps. If the... To read the complete article, login or sign-up using the form below.
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