With families dedicated to their businesses and businesses drawing their lifeblood for growth from their families, one thing is certain: the bond between a business and its leader can be as strong as the one between that leader’s family and the business they created. But things don’t always go as hoped. Being a family that created a business is not the same as being a good business family, and it’s important to understand why that is, particularly in the complex world in which we now live. Nowadays, the already delicate balance between the bond of a business family and the business itself can be thrown off even more easily than in the past.

“Examining relationships among family influence, family culture, flexible planning systems, innovativeness and firm performance”, a study conducted by three US universities (Northeastern University in Boston, University of Mississippi in Oxford, and the University of Louisville), has sought to shed some light on how a business and its family intertwine.

The stated goal of the three researchers, Justin B. Craig, Clay Dibrell and Robert Garrett, was to study the influences family business culture and business management have on each other. More specifically, the three sought to “draw on the resource-based view of the firm” to understand the influence that the family, family business culture and flexible planning systems as drivers of innovation have on firm performance.

To conduct the study, questionnaires were given to small and mid-sized family businesses. The key point to come out of the work (published in the Journal of Family Business Strategy this November) was that the existence of a good culture of enterprise within the family positively influences firm performance and, in particular, its flexibility in operations and its ability to innovate, but the success of a business comes out of an often fragile, unfathomable sort of chemistry, a combination of culture and background, of intuition and calculation, that is difficult to replicate and entirely unsuited to being captured by simple models.

Examining relationships among family influence, family culture, flexible planning systems, innovativeness and firm performance

Justin B. Craig, Clay Dibrell, Robert Garrett

Journal of Family Business Strategy, November 2013

For the first time, the Pirelli Foundation is displaying the works of Renato Guttuso, created by the artist for Pirelli beginning in the late 1950s.

The exhibit, entitled “Renato Guttuso: on the banks of the Nile”, includes 5 Indian Ink drawings and an oil on canvas painting, all inspired by the artist’s travels with Giovanni Pirelli along the banks of the Nile in 1959.

From Thebes to Memphis, from Luxor to Cairo, the illustrations depicted mythical lands populated by locals going about their daily routine, brought to life through the unmistakable strokes of Renato Guttuso.

The exhibit is open to the public (appointment required) Monday through Friday from 10:00am to 5:00pm. For bookings, call +39-0264423971 or write to info@fondazionepirelli.org.

A new drive for enterprise is being seen among young people according to the organisers of the “Festival of Collective Intelligence” (Festival dell’intelligenza collettiva), two days of meetings and debate that was organised by the CNA (Confederazione nazionale dell’artigianato) in Florence in early November focused, this year, on manufacturing and the “maker culture”.

The idea is not a new one. “Cultura#manifattura” (Culture#manufacturing) was the title for CulT Venezie, the European cultural exhibition that attracted more than 25,000 visitors (and a great many youth) for the three days of debate at the San Basilio Terminal, with particular emphasis being placed on the intersection between traditional Italian manufacturing know-how and the innovative technologies being used by today’s “makers”.

In times of crisis, when the traditional job opportunities become more scarce, both in large-scale manufacturing and in the service industry, one way out is that of the start-up, or entrepreneurship. According to statistics published by Movimprese (the statistics unit of Unioncamere), 100,000 new businesses were started from January to October 2013 by individuals younger than 35. That’s one-third of all start-ups during that same period. These were often technologically aggressive start-ups, active not only in retail sales (20%), the restaurant industry (5.6%) and construction (9.4%), but also in manufacturing and high-tech industries. Makers. “Digital natives” able to unite manufacturing and the web, bricks-and-mortar and digital, in new ways. It is a synthesis of the typically Italian brand of individualism and the tendency Italian’s have to keep their business tied to their roots, to strengthen social capital and mutually beneficial relationships, to bring together “individual” and “community”.

This neo-manufacturing “maker” culture is becoming increasingly popular. They have talking about it in the English-speaking world for a few years now with The Economist, for example, coining the phrase “additive manufacturing” (i.e. 3D printing, products made by adding layer upon layer of material to go from an idea right to the finished product). In Italy, this is manifesting itself in some unique ways, given Italy’s focus on dynamic small businesses and high-quality craftsmanship. Of course, it is a trend that is quite distinct from the idea that “small is beautiful” (an idea that had become an ideology of “microcapitalism”, of a brand of individualism that was not yet cooperative but no longer competitive and of family-oriented entrepreneurship), while also different from certain sociological interpretations whereby “makers” would replace the failing large-scale and mid-sized corporations.

More realistically, it is a phenomenon to be watched closely, facilitated, supported (both culturally and financially) and incentivised (through industry-centric legislation in the areas of lending, innovation, research and taxes). How exactly? A few interesting ideas came out of the CulT conferences in Venice. The story of Maurizio Costabeber and his DWS, a small firm in the province of Vicenza, tells of a 3D printer pumping out jewels with a filigree of such perfection that they cannot be copied. Or that of Riccardo Donadon, founder and chairman of H-Farm, who said, “In the world of the institutions, there is great ignorance concerning this phenomenon that we are taking part in, but we have to keep moving forward. Here, in the past, a manufacturing industry sprung up spontaneously. We knew how to make things. We always have known, and now we have to continue down that same path.”

Massimo Russo, editor of Wired Italia, a publication keenly aware of the primary aspects of innovation, reiterates, “Italy is at the centre of a great wave of innovation. With 3D printers, the manufacturing landscape is changing. With additive manufacturing, it’s no longer convenient to find labour elsewhere.” Custom products for markets in which a drive for originality is becoming increasingly common, as is the drive for flexibility without downtime or warehousing costs. A hybridisation of fast prototyping and actual manufacturing is possible given the right skills. “Hackers and makers need to come together,” Russo says. “And here in Italy, this hybrid individual has existed for ten centuries. They are the craftsmen, albeit digital ones.” Change is under way, and the future is bright.

Johannes Gutenberg was like Jobs. No, the precursor to Apple’s Steve Jobs and even to Bill Gates of Microsoft fame and to the myriad of other entrepreneurs in every industry who have managed to make the leap, find another gear and get there first. To win. All true adventurers with an idea in their heads and the stubborn drive to achieve it. Legends in their own right perhaps, but much more often absolutely down to earth; calculating, but enthusiastic; dreamers, but with a firm grip on reality. This makes the story of Johannes Gutenberg a bit like those of thousands of other businessmen, and this is the idea behind “Gutenberg the Geek”, a brief e-book by Jeff Jarvis first released in 2012 that tells of the adventure of inventing mechanical movable-type printing and, more importantly, tells the story of an entrepreneur who can be held up as a model for others. 

According to Jarvis, Gutenberg was the world’s first technology entrepreneur, the one who invested the printed book, which Jarvis equates to the Internet, i.e. a technology platform for the sharing of information. But what is truly interesting about this work is perhaps something else. As the author explains, “Centuries ago, Gutenberg had to grapple with all the challenges a start-up faces today, whether it be in the Silicon Valley or anywhere else in the world.” His book tells the story of this challenge in detail, from the origins of the idea to solving the problem of rapid printing and on to the search for capital and for partners, all without overlooking the aspects of business management. In fact, it reads a bit like an annual report, complete with revenues and expenses, a description of company structure and the operational decisions that characterised the job. In a book that takes less than an hour to read, Jarvis takes readers on an adventure with Gutenberg, the entrepreneur, as he tackles the problems that all entrepreneurs face: public distrust, the fear of anything new, and even the need to keep an invention secret for a certain period of time. He also discusses what brings an end to many businesses, even to this day: problems with cash flow and financial standing. 

Jarvis writes, “This is the story of a great man and a revolutionary inventor, one who, today, we might call the patron saint of Silicon Valley.” It is the story in which many entrepreneurs may see pieces of their own personal adventures. 

Gutenberg il Geek. History’s First Technology Entrepreneur and Silicon Valley’s Patron Saint

Jeff Jarvis

Sold by Amazon (2012)

No business is an island, detached from the social and national context in which it operates. Indeed, the very culture of enterprise that underlies the actions of a business is heavily influenced by this context. These would seem to be statements of which any business owner or manager should be well aware; however, it is important to fully understand their meaning and their implications, particularly with a view towards developing areas and emerging markets, those to which Italian and other European firms may be focusing more attention so as to take advantage of any opportunities there may be.

In the study “Industrialization and Economic Systems in Multinational Management” published in the Journal of Global and Scientific Issues in September, Abhishek Gupta (one of the heads of the National Institute of Renewable Energy in Punjab, India) provides an interesting analysis of these connections between “national culture” and the “institutional context” and “business culture”. In essence, the study looks at the connection between culture of enterprise and a nation’s culture and social institutions. According to the author, a company’s culture is heavily influenced by the national context in which it operates. Abhishek Gupta identifies a number of aspects that businesses – especially multinationals or other businesses that come from other contexts – need to take into consideration. The first and foremost of these are the country’s economic system, its level of industrialisation, and even the nation’s religion(s), its education system and its attitude towards globalisation.  The study then looks at how these aspects interact based on the stage of development the given society is in.

One of the conclusions is that, as Abhishek Gupta writes, “successful multinational managers are those who can properly assess the institutional context of the society they operate in and design work environments that fit the institutional context”. In other words, when a business sets foot in a different setting, those governing it must take a close look at the context surrounding them. This work by Abhishek Gupta explains why from an Indian point of view.

Industrialization and Economic Systems in Multinational Management 

Abhishek Gupta

Journal of Global & Scientific Issues, Vol. 1, Issue 3 (September 2013)

A look to the future

Looking to the future with optimism, aware that we get nowhere without the right skills. The final episode of our interview with Chairman Marco Tronchetti Provera.

Watch the video: A look to the future

Internationality and cultural integration

Milan, 22 November 2013. Internationality: the ability to adapt to and integrate cultures. This is the topic discussed by Chairman Marco Tronchetti Provera in the 4th episode of our interview with him

Watch the video: Internationality and cultural integration

Innovation and manifacturing renaissance

Milan, 21 November 2013. Third episode of the interview with Chairman Marco Tronchetti Provera. This time, we’re talking about innovation and growth.

Watch the video: Innovation and manifacturing renaissance

Investing in contemporary art

Milan, 20 November 2013. Why did Pirelli, a company with a keen focus on innovation, decide to invest in contemporary art?

The interview with Chairman Marco Tronchetti Provera continues. Second episode dedicated to the company’s commitment to HangarBicocca and to the integration of contemporary culture, research and industrial vision.

Watch the video: Investing in contemporary art

Interview with Chairman Marco Tronchetti Provera

Watch the video: Enterprise is culture (enterprise as a verb)

Milan, November 14. Today marks the start of a great many initiatives being organised throughout Italy to celebrate what has now become a tradition: Corporate Culture Week, now it its twelfth edition.

The calendar of activities designed for you by the Pirelli Foundation and HangarBicocca has been available online for a few days now. This weekend, for example, will feature guided tours, creative activities for children and exhibits open to the public.

But for the occasion, we have also thought to offer you something else: an exclusive interview of Chairman Marco Tronchetti Provera by Antonio Calabrò, the director of the Pirelli Foundation, to talk about culture and enterprise, innovation, growth and integration.Segments of this interview will be offered up at various times throughout Culture of Enterprise Week, and today the first segment is entitled: Enterprise is culture (enterprise as a verb).

Building bridges, not walls.  Re-launching the “culture of dialog” that is such an integral part of Italian – and, indeed, European – life. In fact, “dialog” was the operative word most heard last week during the meeting between Pope Francis and Italy’s president, Giorgio Napolitano, two men convinced of the need for open dialog not just between the major institutions (such as between Church and State), but also among individuals who, despite having different backgrounds, experiences and cultures, are aware of their common roots and feel a sense of responsibility for creating a better future for the generations to come. So dialogue, collaboration and – why not? – competition, reviving the origins of the word from the Latin “cum petere”, i.e. striving together towards a common goal, not as adversaries, but as individuals who grow together within a community. It’s a lesson in both civic and moral duty that should guide our daily conduct and our more ambitious projects.

Dialog is also invaluable to the culture of enterprise, something to be promoted during the conferences, meetings, exhibits and other events that, each year, animate “Culture of Enterprise Week”, which is being organized by Confindustria and MuseImprese throughout Italy from 14 to 24 November with the active involvement of businesses of all sizes. The underlying theme for the week is “Più cultura, più impresa” (more culture, more enterprise), which also very much reflects the strategic decision of the Pirelli Foundation whereby “enterprise is culture” – a “polytechnic” culture that encompasses innovation, as the very heart of the enterprise itself, in its broadest sense: in products and production systems; in labour relations and in the rules of governance; in technologies and new materials; in the lifelong training of people and in the language of its marketing and communication; in relations between the enterprise and its stakeholders and its local community, and with schools, universities, the scientific community, the creative community, and so on.

In other words, dialog as it applies to sustainable development, both environmentally and socially. From this point of view, industry is the vibrant core, the place where “building bridges” is commonplace, whether it be with employees, customers or suppliers, or with the market, with consumers, and with investors; with those who do the fundamental research so as to support it and, at the same time, to fuel the sort of applied research that leads to innovation. Industry as a weaver of relationships, as a cornerstone of civilisation that produces wealth and employment and that bonds the very fibres of our society.

Italy’s culture of enterprise is a rich one, built on a wealth of dialoguing and of relationships. Olivetti and Pirelli are longstanding examples of this, but they are far from the only ones. The best moments of Italian growth, during the happy times of the economic boom and in the dramatic times of social tension and even terrorism, have been marked by dialog between open, responsible business people, great directors of the trade unions, forward-looking politicians, and bankers with an educated eye focused on the cultural and scientific communities (such as Raffaele Mattioli at Banca Commerciale Italiana, to give just one of the many possible names).

Enterprise as a key agent in economic and societal growth, and culture as the axis of development. President Napolitano was right to reiterate the importance of Article 1 of the Italian Constitution (the central importance of employment) as well as of Article 9, whereby Italy is to promote the development of culture and of scientific and technological research, and enterprises and their associations work well when, amidst strategy documents, conferences and “culture weeks”, they insist on research and on the synthesis and interaction, not the duality, of the humanities and the sciences. Dialog. On the front page of La Stampa on 17 November, Giovanni Bignami recalled the core importance of research as exemplified in the teachings of a great scientist, William H. Press, from the authoritative American Association for the Advancement of Science, who, in quoting George Washington, the first president of the United States, wrote, “Knowledge is in every country the surest basis of public happiness.”  This is a lesson to be remembered, whether it be in politics, in the scientific and academic communities, in government and, of course, in business. In this synthesis of culture, development and social cohesion we Italians have a great heritage, one which is to be used to its fullest.

Succeeding in a crisis – actually, succeeding because there’s an ongoing crisis – may sound absurd, but, for some, it’s the way it is. It’s the practical realisation that, in spite of it all, many businesses – even in Italy – are able to ride the wave of a challenging economy and actually grow, make money and create wellbeing.

Therefore, when faced with such challenges, it is important to understand how those who have succeeded managed to do it and where those who failed went wrong, although the crux of the explanation is already fairly clear: what it takes to succeed is change and adaptability. 

Thus the importance of reading “Imprese mutanti. Identikit delle PMI che crescono a ritmo di cambiamento” (Changing enterprises. A profile of SMBs that grow with the pace of change), edited by the Confartigianato School of Politics and Economics (SPE). 

The work focuses on SMBs and begins with the observation that the global economic crisis that has afflicted Italy, too, since 2008 has altered the conditions and equilibrium that once enabled businesses to be born, to grow and to thrive. Today, those conditions no longer exist, but that doesn’t mean that we no longer grow or create wellbeing. 

The theory presented is that, now, the enterprises that have been able to interpret the new landscape are what are now being considered the “winning SMBs”, i.e. those that have changed their way of looking at the marketplace, of managing themselves, of conveying their image, and of facing as yet unexplored business problems. These small and medium enterprises have, in various ways, managed to change their organisation, to take advantage of market opportunities (such as the troubles of a competitor), and to rethink their method of operation. The work is the result of a study conducted by the School of Politics and Economics (SPE) at Confartigianato in Vicenza, so the case studies that support the theory all come from the province of Vicenza. Three companies served to exemplify all enterprises: Linea Sette snc, FASP Automazioni snc, and AMB Le Privilege srl.

It is from these three firms, as well as an in-depth study of the economy, that we get the figure of the “impresa mutante” (changing enterprise) as a contemporary model of the business that has “rolled up its sleeves” to combat the crisis, its competition, and the global recession by taking best advantages of the resources at its disposal. It is, most certainly, a study of a highly relevant issue: the nature of the entrepreneur who is able to succeed in spite of it all. 

Imprese mutanti. Identikit delle PMI che crescono a ritmo di cambiamento

Edited by the School of Politics and Economics (SPE)

Confartigianato – Franco Angeli, October 2013 

There are a variety of ways in which to be an entrepreneur. Entrepreneurs may dedicate themselves to a business or to a family that has multiple business and interests in a range of industries. In fact, the development of such “family offices” can even be seen as an entrepreneurial process at multiple levels and in a number of ways and with goals similar to those of a business. Indeed, a study of the family office can help to better understand how entrepreneurs think and how they behave. It is a fascinating journey to places both real and intangible that often leads to important adventures in business.

“Toward a Conceptual Model of the Role of  Entrepreneurship in the Family Office”, written by Juan Roure and Juan Luis Segurado (both from the University of Navarra), Dianne H. B. Welsh (from the University of North Carolina), and Kirby Rosplock (GenSpring Family Offices), is a sort of guidebook that can help us along this journey.

The study focuses on seeking to understand how families of entrepreneurs reinvent themselves in order to manage and govern a family office, which goes beyond their principal area of operations. What emerges is an entrepreneurial spirit applied not to a business, but to the family. The four authors start by making an important distinction, that the “family office” is not the same as the “family-owned firm”. It’s something much more complex, changing and fascinating. In order to better understand how these entities work, after an overview of the theory, the study looks into the behaviour of 32 enterprising families, of which 40 individuals were interviewed. The family offices studied are based both in the US and Europe and operate in a wide range of manufacturing segments, as well as in the food and beverage industry, in distribution, in finance and in construction.

The result is a definition of the model of entrepreneurship that these families represent – a working framework in which various elements overlap and integrate, such as the personal plans of each individual, the evolution of the reference markets, the availability of mobilisable resources, the sales and production outlooks, and the technologies available. Thus that impalpable mental structure which every entrepreneur applies to himself and to his business begins to take shape.

Toward a Conceptual Model of the Role of  Entrepreneurship in the Family Office 

Juan Roure, Juan Luis Segurado, Dianne H. B. Welsh, Kirby Rosplock

The Journal of Applied Management and Entrepreneurship, 2013, Vol. 18, No. 4

Goodbye, shareholders’ agreements. Hello, better ethics score. This is what happened for Pirelli. After breaking up the shareholders’ agreement at the end of October, Standard Ethics raised its outlook from “stable” to “positive” and made it known that the company’s ethics rating could improve further to “E+”. Transparency, efficiency and accountability call for rules and standards of operations that have a direct, positive correlation to business ethics and respect for the values that guide an open, effectively regulated market. Good culture of enterprise is also this, bringing the era of agreements between just a few shareholders so as to maintain the status quo and opening the way to better government based on merit and on market standards. Without these protective barriers, the opinions of the investors in a company are based on both its short-term and, above all, its long-term profitability, on its capacity for growth, and on its respect for a set of values concerning people, safety, quality and sustainability. These are abilities that need to be measured, openly, not protected behind systems of relationships, preferential agreements, privileges for the strongest allies, and the exchange of favours and mutual protections. Ethics as transparency, as greater responsibility, and as an awareness of needing to be judged and either rewarded or penalised.

For a long while, Italian capitalism has been a “capitalism of relationships”. The shareholders’ agreements that have been a peculiar feature of Italy’s economy under the direction of Mediobanca have, for too long, protected the major corporations from the risks of crises and from the invasive “public hand” that, from the major banks to the state-owned industries, acted in a manner far-removed from the rules of the open market. But at the same time, they have kept those hands tied, acting as a barrier against the inefficiencies and undue competition of an economy dependent upon “partitocracy”, thereby safeguarding what little was left of great private-sector enterprise. But they slowed the development of a true market economy in Italy, and now an era has come to an end. Of course, it will be up to the historians to pass judgment on Italy’s family-based capitalism (which often descended into a more pathological familism) and on the tangle of conservative powers and business relationships that, at times, crossed over into a sort of financial incest, not to mention on Enrico Cuccia’s Mediobanca, on the “salotto buono” (the clique of bankers, industrialists and politicians that dominated Italian economic life) and on the “grandi famiglie” (literally: great families). As we await the wisdom of hindsight, today what we know for certain is that that era has finally come to an end after a long, slow decline (which began with the crisis between Fiat and Mediobanca and with Cesare Romiti leaving at the helm of the auto manufacturer). Now, there is no shareholders’ agreement that holds water, whether it be at RCS, Generali, Mediobanca, or elsewhere.

We are at the dawning of a market economy, of business openness, of accountability, and we are working towards a true metamorphosis from the traditional family-based capitalism to one of enterprises open to new financial and industrial investors and to new relationships between the shareholders (including those of family origin) and company management. The “public company” is now beginning to be more modern and a clear indication of the way forward.

The financial markets have become open, too, rich with capital in search of a good home, and globalisation is opening the door to leaders willing to support good enterprise and who have solid plans for growth, for the conquest of new markets for products and services, and for improved profitability over time (and not just as short-term speculation). It is a world that has not now nor could ever have had anything to do with shareholder agreements.

The number of international investors showing interest in Italian businesses is on the rise (although, unfortunately, Italy is still lagging behind the rest of Europe in terms of attracting foreign investment). At Pirelli, 36% of its capital is in the hands of international institutional investors focused on long-term returns on their investment, up from 27% in 2011. The recent presentation to financial analysts in London of the business plan up to 2017, a plan that is based on “industry and technology”, on a “premium strategy” and on strengthening in more dynamic markets from the Far East and Russia to Latin America, has heightened the attention being paid to the company. A company that is innovative, open, responsible, efficient, transparent, and ready to be accountable to shareholders both old and new. These are values to be fostered, to be realised and to be conveyed to others. A choice for efficiency and for the culture of enterprise.