Recently published research explains the methods used by Italian industries to give value to their past

Companies and culture are also nurtured by the history behind them. It is a difficult and delicate game, using the past to nourish the organisational and manufacturing present, yet it appears to have become an everyday occurrence in the Italian national industrial system. Reality, like history, is nevertheless much more differentiated than one might think. Investigating into the various methods of representing a company’s own past is therefore important better to understand the various corporate cultures that populate the Italian manufacturing landscape, to observe its progress and possible targets.

This is exactly what Angelo Riviezzo, Antonella Garofano and Maria Rosaria Napolitano have done with their “Il tempo è lo specchio dell’eternità.  Strategie e strumenti di heritage marketing nelle imprese longeve italiane” (Time is the mirror of eternity. Strategies and tools for heritage marketing in long-standing Italian companies) which was published a few days ago in “Il capitale culturale” (Cultural capital), the University of Macerata magazine.

The work investigates the effective degree of use by long-standing Italian companies of the multiple tools potentially available to add value to their history with a strategic effect. It then analyses the literature on the topic, which helps identify the various tools for heritage marketing and, subsequently, their actual dissemination is explored. Specifically, accurate information has been gathered and analysed regarding the activities carried out by 238 medium and large-sized companies registered with the National Register of Historic Italian Companies of Unioncamere. These include a long list of some of the best and most famous names in the finest Made in Italy production, such as Zegna, Auricchio, Fabbri, Carli, Caffarel, Lagostina, Guzzini. All the major tools for heritage marketing are then taken into consideration.

The results illustrate how the awareness of their past is widespread among Italian companies and how it permeates the current corporate culture within them. Yet at the same time, the researchers have revealed how telling one’s tale is still “craft-based” and “experimental” for each individual company.  Indeed, there is only a minority of companies who demonstrate they have understood the benefits of a convinced and multi-faceted activity to enhance the value of their history. In other words, not every company achieves the same degree of investigation and awareness of its own past. But it is not a matter of distracted corporate culture, but rather the expression of the multitude of experiences involved, of the large number of paths undertaken by every company to get to where it is today.

The work by Riviezzo, Garofano and Napolitano helps understand better the variety of doing business in Italy.

Il tempo è lo specchio dell’eternità. Strategie e strumenti di heritage marketing nelle imprese longeve italiane (Time is the mirror of eternity. Strategies and tools for heritage marketing in long-standing Italian companies)

Angelo Riviezzo, Antonella Garofano, Maria Rosaria Napolitano

«Il capitale culturale», XIII (2016), pp. 497-523

“We are the alternative to the City”. Beppe Sala, mayor of Milan, sets out the candidacy of the metropolis as the new head office for the EBA (the European Banking Authority) and for the EMA (the European Medicine Agency). And he also outlines its attractions, not just for international institutions but also for companies, investments, qualified activities for financial and hi-tech multinationals. The post Brexit situation has, it is true, created a variety of problems for all the countries of the EU, both in respect of political prospects and economic performance. But it also opens up opportunities, particularly for Milan, which can take a leap forward, on the European stage, as a competitive metropolis.

Mayor Sala, in fact, took a trip to London last week for a road show with investors and authorities, outlining the financial and social qualities of the city, “the place to be”, as it is described in the slogan by the international media during the fortunate Expo season. He reminded people that Milan has grown, over recent years, into a metropolis which knows how to build original forms of entrepreneurship, creativity, efficiency of services, research, innovation, training for human resources, and an excellent quality of life. And it is indeed now that it can, more and better than ever, serve as a major, highly qualified power-house for growth. In the heartland of industrial Europe. But also in respect of the whole of Italy, as a key economic driver. An interesting strategy. And a fascinating challenge. Which can be won. They are also talking about it at the Chigi Palace, at the Farnesina, in the corridors of the Confindustria and of the Assolombarda. There is a need for national management and rapid teamwork, where the national institutional and financial players, from Lombardy and Milan, from the Region to the Marino Palace, all work together. And also for an association such as the recently-founded “Brand Milano”, to bring together public corporations, associations of private companies, universities, and cultural institutions, with an ambitious programme of regional marketing, which offers sound competencies which are readily accessible. Beppe Sala, as an authoritative mayor, with past experience as a businessman (Pirelli, Telecom) but also as a successful director of major public events (the Expo), has all the requisites to make a good game of it. This is a “STEAM” city, as they often refer to it in the Assolombarda, underlining its excellent facilities with the initials for “science”, “technology”, “education” as well as “environment” and “arts” (all the arts and creativity cultures) and “manufacturing”. A synthesis that no other European capital can offer, in the construction of an alternative to London.

London, indeed, is going through a crisis, following the extremely serious result of the Brexit referendum. The Stock Exchange has become a market which is very neurotic, unstable and volatile. The pound sterling has collapsed. The property market, which had reached impressive heights, is beginning to show symptoms not only of a bursting of the speculative bubble, but also a real “emptying effect” in the skyscrapers and in the areas of financial and services offices: after Brexit, why would you stay in London? “Withdrawal from English property funds; after Standard Life, Aviva and also M&G freeze repayments to investors”, writes Il Sole24Ore (6th July).

In short, a difficult environment. “Anarchy in the UK”, wrote The Economist the day straight after the vote. And also “Post-Brexit turmoil” and “managing chaos”, in relation to “the economic fallout”.  Three weeks after the controversial English vote, in the London offices of several multinational corporations, discussions continue on how, from the point of view of the best interests of the companies involved, to manage the immediate future. To stay in Great Britain outside the EU and therefore beyond the advantages of the single market, or to find new headquarters, in Dublin or Frankfurt, in Luxembourg, or – and why not?  – in Milan?  This is the question that is being asked by Vodafone and Easy Jet, JP Morgan and Goldman Sachs, but also by major manufacturers, such as Johnson Matthey (chemicals) and Nissan (automotive). And in newspapers there are also articles about a “Milan temptation for start-ups: time to kick off the flight from London for the “incubators””, as writes Affari&Finanza in la Repubblica (4th July), noting that “the English capital is one of the most important world-wide hubs for young technology companies, primarily as a result of the ease with which they can find financing. But with the victory of the “leave” camp the situation has changed and the race by other capitals to take its place has already begun”.  “53% of engineers and IT specialists, the essential human capital for the competencies and intelligence for start-ups, have come to London from abroad”, calculates Il Sole24Ore (1st July). But after Brexit the English capital is at an extreme risk of losing its attractiveness. So where will people go? This is Milan’s chance.

The English Government, scared stiff of the negative effects of Brexit on the economy (wealth, jobs, innovation, tax receipts, the future) is trying to stem the possible flight of companies to other centres. “A plan to cut company taxation in the United Kingdom from 20% to 15% or even less”, has been announced by the Chancellor of the Exchequer George Osborne: an open-minded challenge of “fiscal dumping”, a highly care-free move to which it is hoped that Brussels and the major EU nations, from Germany to France, from Italy to Spain, will respond effectively. London is moving quickly, to try to escape from the set-back situation into which it has driven itself all on its own.  The multinationals, always sensitive to tax advantages, could be tempted. This is why the response from the EU to Brexit and the initiatives to attract capital investment and opportunities must be equally rapid, convincing and long-term.

This is where Milan must play its hand, as an opportunity for the city and for the country. In relation to the EU, EBA and EMA Agencies, moves are already afoot on the part of Frankfurt, Madrid, Amsterdam and Dublin. Cities which are also active in more financial spheres. Where, for example, will be based the new company formed by the merger between the London Stock Exchange (which is also the majority shareholder in the Italian Stock Exchange) and Deutsche Börse?  In Frankfurt, probably, which already hosts the headquarters of the ECB. But even Piazza Affari could postulate for the role of Eurozone arm of the LSE (London Stock Exchange) Group.

In order to take advantage of the current opportunities, in a Milan which can act as the point of reference for the entire system of the country and win out against other European capitals, what steps can be taken?  There are the questions of regulation, infrastructure, taxation, relations with Brussels, all of which are of national relevance (to be precise, subjects for the Presidency of the Council of Ministers, the ministry of Foreign Affairs and those of the Economy and of Development).  But Milan can throw into the ring its own specific elements of attractiveness. A plan for tax reductions, a “no tax area”, for Human Technopole, the hi-tech hub in the ex-Expo zone, for example (one of Sala’s excellent ideas during the election campaign). And all the other initiatives to bring to life precisely in that location research, innovation, international companies specialised in “life sciences” and in genomics (Bayer has declared on several occasions that it would be interested), universities and companies specialised in the management and the development of big data.

In the manufacturing sectors too, Milan can point to the advantages of its attractiveness. If Toyota and Nissan, in the same way as other car manufacturers based in Great Britain (1.6 million vehicles manufactured in 2015, 800,000 employees) intend to re-evaluate the various advantages for the allocation of new capital expenditure and plants, the Milan metropolis can do well as a focus point for a major industrial capacity in the automotive sector and in the components industry, embracing an area from Lombardy across to Piedmont, Emilia and part of the North-East: hi-tech manufacturers, services, research and innovation in Industry 4.0 sectors, training.  The Milan metropolis is right in the centre.

The latest Bank of Italy Survey places the focus on the degree of progress in the industrial sector and indicates possible areas of development

 Open to the world. Including to the one next to one’s own facility. And not just in terms of focus on social movements, for those in charge such as entrepreneurs and managers of what one’s company achieves. An awareness of what is happening “outside” should also translate into careful observation of how the economic system in which one is active is evolving. By using a guide to the right tools for this awareness. This is what is constituted by the Survey of industrial corporations and services which the Bank of Italy has just issued and which represents an excellent way of discovering the key features of what have been the results of the industrial system in 2015 and what are the forecasts for 2016.

Based on what has been collected and set out by the various regional offices of the Central Institution, in the course of the year industry and services demonstrated their resilience by achieving good results. Overall sales grew by around 4%, and sales volumes increased for around two thirds of companies (as against just over half in 2014). Certainly, sales prices maintained only modest progress and over half the companies reported no or negative changes in prices. Despite everything, however, expenditure on investments was boosted. And there is also greater confidence for progress in 2016. All this while even the construction company sector seems to have seen an interruption to the negative period initiated in 2008 (although the uncertainties for this year are still very evident).

What is most significant here, however, and what emerges from the summary pages written by the economists from the Bank of Italy, is the indication of the vitality of manufacturing industry and services. This is a sign of a change in the overall movements in the economy and probably of the effects of an economic and industrial policy which differs from that of the past, but also a sign of the desire to produce and progress which has not been suppressed by the adverse economic environment of recent years. It is a fact, for example, that in 2015 the number of hours worked increased. And this is also an indication of a corporate culture which is used to battling it out. And it is precisely from scenarios such as those envisaged by the Bank of Italy report that one can find the right ingredient better to understand how to take action, and how to appreciate more keenly the changes to which such action contributes. The just under twenty pages of the Survey (together with the attached statistical study which completes it) represent a good read, which is useful for a better understanding of entrepreneurial and managerial actions.

Indagine sulle imprese industriali e dei servizi (Survey of industrial corporations and services)

et.al.

Supplementi al Bollettino Statistico. (Supplements to the Statistical Bulletin) Indagini campionarie, Nuova serie, Anno XXVI, luglio 2016 (Sample Surveys, New series, Year XXVI, July 2016)

A small book from the Nobel Prize-winner Stiglitz analyses in depth the links between company actions, the economy, ethics and morals

Ethics and entrepreneurship can go hand in hand. Indeed, it is possible to go so far as to state that the spirit of entrepreneurship and the culture of a good company are intimately linked. And these are not just abstract theories. Even though, when one looks around at what is happening today, a close harmony between company management and the principles of high moral and ethical standards might seem almost inconceivable in certain environments. It is therefore a difficult task to manage in tandem with each other an efficient management system and an ethical approach to the effects of entrepreneurial actions.

Reading  “Un’economia per l’uomo” (An economy for mankind) by Joseph Stiglitz – the economist and 2001 Nobel Prize-winner -, is something which is not just useful in order to understand the relationships between such complex subject matters, but also constitutes a short but nevertheless fascinating trip through shrewd and in-depth economic thinking, well beyond the over-worn concepts of efficiency, effectiveness and accounting profits.

Stiglitz sets out his arguments by starting from a comparison with the encyclical of Pope John XXIII Pacem in terris and from the international debate about human rights in the context of globalisation and of the financial crisis.  The questions to which the text responds are those which are seen as fundamental today: whether, for example, the current economic system is in a position to guarantee mankind a condition of harmony between individuals and with nature, where exactly do we stand with the so-called environmental question, the level of global inequalities, the true nature of the distortions introduced by the increasing “financialisation” of the economy, the inadequacy of GDP as a measure of well-being, or failings in the market.  For every section, Stiglitz sets out clear ideas within short sentences. Just what is required in order to understand and to reflect on the matter.

It also contains important sections on companies and those who manage them. “An economic system where certain players (individuals or companies) prosper to an exceptional degree – writes Stiglitz -, with a correlation which is not so much with the effective contribution made to collective society but rather with their ability to derive “gain” from the situations around them, is not a fair economic system. This is true whether it results from deficiencies in the system of management of the companies involved (a legalised system of corporate fraud), or whether it derives from the efficient implementation of a policy of competition (the exploitation which results from attaining monopoly control). And this is even more valid where the gains of those who find themselves at the top of the system derive from the exploitation of those who find themselves

at the bottom of it”.  He then adds that “in our inter-connected society the actions of a single individual or company have consequences for all the others. If it is our duty to live in harmony, these external effects must be taken into consideration”. Meanwhile, as he ends the first part of the book, Stiglitz underlines the truth which many refuse to recognise:  “It is interesting – he writes -, that the well-being of those who are stakeholders in a company (for example, different types of shareholders) is not generally maximised by the pursuit of maximum profitability (or market value) on the part of the company itself”.

Stiglitz’s book contains fewer than fifty pages, and can be read in less than an hour, but should be remembered for very much longer.

Un’economia per l’uomo (An economy for mankind)

Joseph Stiglitz

Castelvecchi, 2016

Culture as innovation, hospitality, technology. And as a tale, starting with theatre. These are the motivations for the candidacy of Settimo Torinese as “capital of culture for 2018”, with a file that was officially presented to the Cultural Heritage Ministry on Thursday 30th June. A challenging candidacy, a challenge on the part of a city that “has no palace, no castles, no famous cathedrals, no Renaissance frescoes, no Savoy family residences”, but it can use as leverage its factories, research laboratories, migrant hospitality centres, public and private libraries, packed with visitors, and theatrical traditions. “Polytechnic culture”. And “industrial humanism” (we had already discussed this in our blog on 14th June).

Following Mantua this year and Pistoia for 2017, now comes Settimo Torinese’s proposal. Strong, original, provocative, “anomalous”, according to Elena Piastra, Vice Mayor of Settimo Torinese appointed to Culture, who is driving the initiative. Very useful, however things pan out, to discuss the relations between culture, industry, architecture, urban and social transformations, suburbs which, through culture itself, build a way out of marginalisation. Indeed, just as Settimo Torinese has done and continues to do.

“We were a former dormitory on the outskirts of Turin, and now we want to become a capital of Italian culture” its promoters explain. Indeed, the candidacy “plays on culture not as an inheritance from the past, but on the values of a suburb that welcomes migrants, creates innovation and research, investigates solutions for cultural integration and economic development”.

Here is a key word: innovation. In the widest sense of the word. Not just hi tech and “digital”. But also manufacturing innovation (factories, in fact). As well as social innovation. “Settimo Torinese was a town of dry cleaners with around 13 thousand inhabitants, who between the 1950s and the 1960s saw the arrival of 30 thousand people originating from Polesine and Southern Italy”, the Municipality would have it. And “today, history repeats

itself, with more migratory waves. Here in Settimo, you’ll find the Fenoglio Centre, the largest hub of Initial Hospitality for Asylum Seekers in Northern Italy. The similarity between the pictures taken during the 1950s, with emigrants from the Veneto and the South of Italy arriving with their boxes and carrying suitcases on their heads and their children on their hips, and those snapped today, with migrants getting off coaches, is extraordinary: the same boxes, children, suitcases, destination Settimo Torinese. “It is as if welcoming migrants were in the very DNA of Settimo Torinese”, the promoters state. Popular culture.

With such massive immigration, everything was set for the city to become a social melting pot. Instead, and indeed thanks to culture as an engine of social cohesion, the suburb began its very own redemption scheme. Theatre, literature, pictures. During the late 1970s, Settimo was home to the birth of the “Teatro Laboratorio Settimo” (Settimo Theatre Workshop) experience founded by Gabriele Vacis and where the talents of Laura Curino, Marco Paolini, Alessandro Baricco, Roberto Tarasco and many others developed. Culture quickly became an extraordinary tool for aggregation, integration, growth and development of the territory. Innovation, in fact. “For decades – reports Vacis – here we tried to practice a culture that was not merely ephemeral and based on events. But rather a culture as memory and innovation in industry. A culture as the creation of relations, community, society. A culture as beauty that is not just about inventing shapes, but interaction, inclusion, participation. All this has saved a suburb that was truly set to become an undesirable banlieue. Now Settimo can be lived in and considered the tip of the iceberg for many other suburbs who have and who continue to create culture”. Theatre that discusses work. And work that animates the large stage. As testified in fact by “Settimo – La fabbrica e il lavoro” (Settimo – The factory and work), a performance by the Piccolo Teatro di Milano, directed by Serena Sinigaglia, with the support of the Pirelli Foundation, resulting from the eye-witness accounts of workers, technicians and engineers from the Pirelli Industrial Pole and which proved successful amid critics and audiences during the 2012 season.

Culture also as sustainability and “green economy”. It is worth remembering – the promoters say – that in 2007 Woodrow Clarke, winner with Al Gore of the Nobel Peace prize, included Settimo Torinese as part of the 10 world centres (and the only Italian example) for the practice of energy saving and exploitation of renewable sources. “Green” land. “Green” companies. After the 1980s crash, recently the public-private partnership has led to “a new model of re-industrialisation with a modern twist, focusing on research, innovation and sustainability. Three major multinational brands such as Pirelli, Lavazza and L’Oreal have not only delocalised but have invested hundreds of millions of Euros in Settimo itself to renovate and gentrify their factories”. “Beautiful factory”, says Vice Mayor Elena Piastra. To return to a topic which is dear to improved corporate culture and to indicate a virtuous path amid architectural quality, quality of life, productivity and competitiveness of industrial plants, with a view to achieving environmental and social sustainability. The Pirelli Industrial Pole, “wired” with the research and service laboratories designed by Renzo Piano is an outstanding example. Indeed, Piano himself is among the main supporters of Settimo’s candidacy as “capital of culture”.

A handful of abandoned factories have been converted to create new, stimulating cultural places. La Siva, the chemical factory where Primo Levi – the master writer not just of the tragic fate of survivors of the Holocaust but also of the pride of workers and technicians during the economic boom – had worked becomes “a new cultural space of the city dedicated to Levi the amazing chemist who wrote “The Wrench” and “The Periodic Table”. Also the Archimede Library, housed in the former Paramatti paint factory, is one of the largest and most innovative facilities in Piedmont, with over 400,000 users each year (almost four times the national

average) and 140,000 loans (approximately three times the national average). A system connected to corporate libraries (the one at the Pirelli plant in Settimo first and foremost). Culture as reading, sociability, relations. A system that is worth being recognised and, why not, rewarded by becoming a “capital”.

(photo Carlo Furgeri Gilbert, Polo Tecnologico di Settimo Torinese, 2016)

A study carried out by Walden University explores the relationship between the business culture of banks, CSR and financial performance

Corporate Social Responsibility (CSR) is an issue that requires close attention.  CSR is an approach and series of behaviours that align the actions of a business with the world around it and is relevant to all production organisations. It can differ greatly depending on the type of business concerned and also applies to banks which are deemed – quite rightly  – businesses like any other.

Links between CSR and banks are nevertheless more complex than those between CSR and other types of organisation. This makes  “Corporate Social Responsibility and Financial Performance of Banks in the United States” by Waidi Alani Gbadamosi  (Walden University) an enlightening read. The paper presents a study looking at the relationship between corporate social responsibility and the  US banking system. In other words, it looks at how US banks, seen as businesses, behave and their CSR practices.

The work begins by examining the principles of CSR then moves on  to look at evidence of them

in the US banking system. The survey was carried out on a sample of 71 US banks  which provide publicly available ethical ratings, financial data, and stock market data.

The results were surprising in some respects. Contrary to expectations, Gbadamosi’s study showed no significant effect of social factors on accounting returns. The author explains that  shareholders across the banking system perceive social activities as risky because of this and demand higher returns as a result. The study also showed that governance, diversity, and employee relations were positively related to accounting returns while product and community factors were negatively related to profits.

The conclusion to emerge, therefore, is that banks must be extremely careful in how they approach CSR and aim to strike the right balance between their social responsibility practices and their financial performance.

Corporate Social Responsibility and Financial Performance of Banks in the United States Waidi Alani Gbadamosi

Walden University, ScholarWorks, May 2016

Theatre is popular culture, the “ideal place for communities to voice their stories,” as Andrée Ruth Shammah, the great “lady of theatre” loves to say. Keeping a theatre alive, bringing it to life, nurturing it, filling it with actors, audiences,  allowing it to represent our past, present and future, is not an easy task.

Factories are also popular culture: work, people, research, bonds and conflicts, a positive culture of making and selling, manufacturing and market, active economy and development. Then there’s the history. A factory’s many stories. Stories which can quite easily be turned into theatre (“Settimo, work and factory“, directed by Serena Sinigalia with the support of Pirelli Foundation, was one of Piccolo Teatro di Milano‘s most successful productions in 2012; moreover, ten of Italy’s biggest theatres were also involved, in 2015, in the “L’impresa va in scena” project (business takes the stage) organized by the Confindustria Culture Group, to much critical and public acclaim.

Memories, very clear ones, of such relations come back to mind at a time when theatrical people, the likes of Shammah for Teatro Parenti in Milan or Luca Barbareschi for Rome’s Eliseo, come together to narrate theatrical initiatives and seasons with industrial people like Pirelli, who wish to support theatre. Pirelli‘s name appears time and again throughout history beside those of founders of other theatres, such as Il Piccolo di Milano, and beside the names of those who have supported other initiatives which, again, have to do with the stage, such as La Scale, l’Orchestra Verde, and l’Orchestra da Camera Italiana.  Cultures of making and their manifestations. Embark on and perform. Interpret the times and how they’re changing. The world as action and representation. Amazing theatre, isn’t it?

Theatre and industry have many words in common. Take laboratory, for example. Or research. Manufacture, that world of scenery and costume, and the world of industry.  And there’s the word root – com – that lives like a life force of another word that sits well with both theatre and industry: community (the lesson of Adriano Olivetti, or of other leading impresarios attentive to social issues, like Pirelli, are worth a re-read). Come to think of it, they share a word root and very fertile morpheme with another that is key to the economy: competitiveness (mentioned several times on this blog). Andrée Shammah mentions several more: condivisione (sharing) and contagio (contaminate/infect). Infectious, the spirit with which theatre addresses its audience, the more valuable the more it participates. Infectious, the tendency to innovate and participate in factories too: without it, there would be no competitiveness.

Continuing with the game of similarities, we don’t have to look much further than the most recent project of one of Italy’s greatest actors: Luca Barbareschi. He is now the owner of Rome’s most famous and prestigious theatres, the Eliseo in Via Nazionale, across the street from the Bank of Italy and a stone’s throw from the Quirinale Palace. He invested a large sum of money in it, most of which was his own and some from supporters (including Pirelli), and set up a space in which to do theatre, music, meetings, literature, training, and exhibitions. Oh, and a good restaurant. A theatre that will be managed – they hope – like a successful company. Barbareschi’s role? As “entrprenactor”, to coin a fun neologism.

To emphasize the many coincidences, let’s not forget that on the site of the Teatro Parenti, currently being expanded, in Milan, there once stood a bolt factory. If the intention is to embrace Leonardo Sciascia’s point of view (there are no coincidences only incidences) and listen to Andrée Shammah’s suggestions (“there are spirits”  in places that make good theatre), that same spirit of industry, the spirit of enterprise, the spirit of “making beautiful things that the world will like” is also at play in the places where the Parenti theatre has long been growing into its current identity: a complex with more than one theatre that continues to grow, bringing a fascinating 1930s pool – la Caimi – back to life while living multiple lives amid shows, sport, training, music, literature, and communal life activities like helping and eating together (grand gala opening and concert last week). The re-launch of the Teatro Parenti and Caimi adventure are the handiwork of both public and private  (including Pirelli along with Anima, Intesa San Paolo, Nissim from the Bolton Group, etc.)  Synergies Synchronicities

This is the energy of Milan, a metropolis that has always embraced the contamination of public and private, institutions and society, business and culture.  Celebrating economic, social and cultural innovation. Finding a creative way for theatre and a swimming pool to come together. And to continue to leave the city tangible evidence of its business endeavour. For future generations.

A book that explores the dangers and opportunities of changes in the marketplace and how to respond to them

Innovation is difficult. Not many succeed in embracing what’s new, staying one step ahead, perhaps, of the others, and knowing how to act in the face of change. It is one of the keys to success for impresarios and managers that manage to remain a cut above the rest.  And it’s not just for corporate giants. Quite the opposite.

Innovation – or change in general – can throw even the most organised production systems into chaos. It is vital, therefore, to have the necessary tools to understand the opportunities change presents.  “Disruptive Innovation” by Clayton M. Christensen, recently published in Italian, is a way of gaining such insight.

Christensen is one of the world’s top experts on innovation, he teaches Business Administration at the Harvard Business School and is a member of the Boston Consulting Group; his familiarity with innovation, with businesses and their successes and failures goes back decades. Above all, the theory he mapped out has become a sort of milestone: when faced with innovation, large corporations are in danger of failing and being swept away by smaller, more agile enterprises. In other words, Christensen postulates that while large multinationals often fail as they struggle to deal with changing marketplaces and technology, small and medium enterprises able to listen to their consumers, able to anticipate trends by using their “competition antenna” to sense new and emerging needs and who embrace “groundbreaking” technological innovations with a vengeance, have a much greater chance of success.

To elucidate his thinking, he examines the innovation models used in a variety of sectors (from IT to pharmaceuticals, and from the automobile industry to steel-making). It emerges that the truly ground-breaking innovations are often not fully appreciated and welcomed by the majority of customers, which prompts market leaders not to invest in them. In so doing, they deny themselves the opportunity to open up new markets and acquire new clients for the products of the future. Queuing up to prove his theory are case studies of electronic businesses, earth-moving machinery, information technology  and electrically-powered vehicles.

One main conclusion can be drawn from this: succeeding in a changing marketplace is also about agility, about learning to fight for survival, day-in, day-out, almost certainly with dexterity and speed in knowing when to change. Such qualities can be developed by the simplest of organisations and are imbued in a business culture that is used to taking nothing for granted.

The innovator’s dilemma

Clayton M. Christensen

Franco Angeli, 2016

A thick volume of unexpected “spiritual exercises” for managers has just been published in Italy

 Managing a business can have a high spiritual side. Aside from the mechanisms of calculation and forecasting. Something different, which should be investigated, understood and experienced. Something different even from the entrepreneurial approach, which obeys rules that are different from managerial rules. Understanding the spirituality of managerial activity also serves to conduct one’s activity, and that of the business, towards horizons that envisage a more comprehensive success than that of mere profit. Towards a business culture that is more accomplished albeit more complex.

Grasping the spiritual essence of the manager, nevertheless, is no easy task. Reading “Esercizi spirituali per manager” (Spiritual exercises for managers) by Étienne Perrot is therefore a good way to start to explore a world that is apparently far removed from running a business but is, in actual fact, intimately linked to it.

Perrot – economist and theologian, priest and Jesuit – teaches Economics, Social Ethics and Business Ethics at Fribourg University and writes as if he were talking to any old manager, explaining and not pontificating, taking the reader’s hand and leading him/her along paths which have probably seldom been covered with clarity. The author draws his inspiration from the writings of Ignazio di Loyola, but often detaches himself from them and specifies that the book is specifically intended for those who work as executives within a company.  The language used is direct, right from the first phase: “Spirituality is not a management tool”. He then continues:  “As far as the figure of the manager is concerned, spirituality is not a means to avoid stress, to prevent the dangerous identification with the success of a given work team or to prevent excessive work-related stress (…)”. Yet there is plenty of spirituality in the business activities of the manager. Perrot explains:  “When one seeks the imprint of the spirit, where the idea of managerial spirituality stems from, within the multi-faceted nature of corporate situations and their restrictions, it proves to be the unification of the manager’s self not only with his natural, professional and social place, but also with his past and his future projects”. A Manager seen as an all-round person, therefore, who combines his/her work experience with his/her personal experience in one whole.  This vision explains the need for a spiritual interpretation – and not just a material one -, of business work, which drives Perrot, at the beginning of the book to specify that “the managerial spirit is not to be pursued in infrastructure, in organisation, in procedures or in economic indicators, and even less so in the thought patterns, in financial patterns or in accounting, but rather it should be sought in the relationship between the manager and his socio-economic environment”.

Based on this premise, the author – as mentioned earlier – takes the reader by the hand to lead him/her to complex concepts (such as alterity), accompanying them, with summary sentences to understand the connections between what is material and what is spiritual. Such as, for instance, when answering an implicit question about where the spirituality of the manager might be, which “(…) rather than being exposed in formulas, is experienced on the edge of events”.

The manager and company according to Perrot are not disconnected from reality, they fight against the times and the methods of the factory and of the office. Yet they manage to be detached from them. The author therefore suggests “spiritual exercises” in four steps: first of all the liberation “from ideology” i.e. from prejudices, from the “strict ideology that blocks the manager  within his own judgement”, then the ability to pay attention to individual people and to particular situations, then again to slow down and stop when necessary and lastly the one tied to the ability to start up again.

Written for everyone, Perrot’s exercises “appeal to the memory, the intelligence, the experience and the desires of the manager”.   Who is also affected by defeats as well as by victories (“(…) accepting to collapse ahead of time is a necessary condition in order to be able to move forward”), but who is proposed a vision of his/her work which is definitely important: “Like a work of art, the business, which at a glimpse would appear completed, at least in terms of planning and conforming to the schedule, is only a passing moment of an incomplete managerial project. (…) Like the art of management, the spiritual path of the manager never ends. It stops to take a breather, and it experiences, as if during excursions, like a fall caused by the obstacle which is real. Nevertheless, as in excursions, this collapse is then always overcome”.

Esercizi spirituali per manager (Spiritual exercises for managers)

Étienne Perrot

Cstelvecchi, 2016

An article just recently published in USA investigates the connections between corporate specificities and the ability to face market changes

The most efficient and fast business wins against its competitors on the market where speed (perhaps more than efficiency) has become the mantra. This indication comes from multiple business management manuals, almost permeating modern manufacturing culture. Before quality, before proper production activities, before attention to specific aspects such as those tied to social responsibility in entrepreneurial activities, in many environments it is being speedy that distinguishes a good entrepreneur.

The research conducted by Jennifer Heckler and Anne Powell (both from Southern Illinois University) is based on a different presumption. And it is interesting to read for this very reason. “IT and Organizational Agility: A Review of Major Findings” sees the concept of agility as the basic presumption for the success of a business, although interpreting it differently from usual. The authors explain that a particular approach to business management leads to considering agility as

the ability to adapt rapidly to change. This ability is rendered all the more effective by the use of means made available by IT. The more agile businesses are from this perspective, the more successful they are in their reference markets. But this type of business does not precede change: it simply adapts to it albeit with great ability and speed.

Heckler and Powell share the need to tackle global competition by being equipped with rapid and “adaptive” agility. But they also have more to add. “An organisation – they write -, cannot simply fill in a check list and think it is agile”. Recognising and using the fundamental values of business culture, the presence of key characteristic traits of each entrepreneur is, for both researchers from Illinois, the added bonus that allows a business that is simply quick to adapt to change to become a business capable of preventing change.

A business that is truly successful, therefore, is not just one that is capable of adapting with agility to circumstances, but most of all one that – based on its nature, on its history, on the experiences had in the factory – manages to liaise with the market efficiently. Also using IT in a different way. In other words, in addition to check lists, the model and the manufacturing culture true to every business counts.

The article by Heckler and Powell suggests for the reader a non-mechanistic vision of the procedures for adapting to the surrounding environment seen as an element of success of the business itself.

IT and Organizational Agility: A Review of Major Findings

Jennifer Heckler, Anne Powell

Association for Information Systems AIS Electronic Library (AISeL), Spring, 2016