The traveling businessman is increasingly common. They are the very lifeblood of businesses determined to expand into international markets, something which is becoming a necessity nowadays, given the condition many domestic markets are in – Italy first and foremost. But being a globetrotter in business is no easy task. Nor is it easy to truly put into practice the concept of internationalisation that is being passed off as a sort of panacea for all ills.

Fortunately, a work by Francesca Prandstraller (a lecturer for the Department of Management & Technology at Università Bocconi in Milan) and Barbara Quacquarelli (a researcher of Business Organisation for the University of Milan-Bicocca) helps show us the way. Their effort is a balance of both theory and practice that features a series of highly significant case studies of companies such as Autogrill, Eni, Luxottica, Unicredit, Intesa Sanpaolo and Riso Scotti, all towards one end: to ponder the concept of internationalisation and the human resources needed to undertake such a process. As the authors explain, for businesses, getting past national, cultural and linguistic barriers requires an assessment of an organisation’s capabilities, strategy and vision, which is something that is not easy to put into practice, particularly because – as the authors conclude – internationalisation calls for managers that possess not only the technical skills, but also, and above all, the ability to adapt to different contexts and to best interpret them for the strategic goals of the business.

Risorse umane internazionali. Cultura, competenze, strategia

Francesca Prandstraller, Barbara Quacquarelli

Apogeo, September 2013

“Human capital is at the crux of our reasoning,” said Ignazio Visco, Governor of the Bank of Italy, a few days ago during an address at the 10th Book Forum entitled “Investire in conoscenza, cambiare il futuro” (Invest in knowledge. Change the future). For Visco, this forum was an opportunity to talk about the two-way links between education, growth and enterprise in Italy and to assess the status of knowledge and the economy as they stand today in Italy, showing, if not new, at least little explored paths forward for both the public and private sectors.

Visco’s analysis has been condensed nicely into a 15-page work to be read straight through from cover to cover. He begins with a famous quote by Benjamin Franklin: “An investment in knowledge pays the best interest.” Of course, this implies the ability to invest in knowledge – and so in education and all that goes with it – but it also (especially now) requires awareness of the need for high levels of knowledge to be a part of the very culture of enterprise.

As Visco explains, “For production, adequate human capital facilitates the adoption and development of new technologies, acting as a driver of innovation and so of economic growth and employment. Employee training, managerial skill and organisational capabilities are key resources in what is being called ‘knowledge-based capital’ as measured by the OECD, most recently related to 2009, along with other intangibles such as software, databases, research and development, patents and design. Such investment as a percentage of GDP varies greatly from one OECD country to another, ranging from 11% for the United States to just 2% for Greece. Italy is also among the lower ranks at just over 4%.”

It is on this reasoning that the Bank of Italy governor bases his analysis of the actual health of education in Italy and the connection this has with the status of the economy. Visco then looks more closely at the origins of Italy’s deficiencies and points to a series of steps to be taken to enable the country to close these gaps. These actions concern households, the level of focus and spending on education, and the better use of mechanisms (such as internships and training programmes) for inserting young people into the job market.

Investire nella conoscenza (Invest in knowledge)

Ignazio Visco

Bank of Italy, Governor’s Address at the 10th Book Forum, “Investire in conoscenza, cambiare il futuro” (Invest in knowledge. Change the future), 19 October 2013

Better to be a cook than a factory technician; better a hotel clerk than a machinery repairman. Maybe it’s because of shows like MasterChef, Ready Steady Cook (and its Italian-language edition, La prova del cuoco), or the Italian cooking show Cuochi e fiamme (literally: “Cooks and flames”), but the majority of Italian youth entering secondary school are showing a preference for cooking over manufacturing. A Condiretti study has shown that, for the 2013-2014 school year, a total of 46,600 students have enrolled in vocational secondary schools in the fields of gastronomy and hotel management, and 13,400 have enrolled in agricultural schools. At the same time, just 21,500 students have chosen to enrol in vocational schools specialised in manufacturing, maintenance or technical assistance. That’s more than two chefs to every factory worker.

This could be seen as good news. Young people are beginning to understand better the connection between their education and job prospects and are focusing on an industry in which Italian tradition is still going strong, i.e. cooking, good food, a strong agricultural industry and tourism, all of which require some good, strong professional skills. But looking at the numbers, we also see some disturbing details: the younger generations continue to be critical of – if not downright hostile towards – the world of manufacturing and industry, a world on which a large part of Italy’s GDP (roughly 17%) is based and which is being seen as a launching pad for the future in a time in which the EU is promoting the central importance of manufacturing as a cornerstone to growth (including plans and other measures to bring manufacturing to 20% of GDP by 2020, up from the current average of 15%), the US is focusing on its “manufacturing renaissance”, and the UK and France are investing to boost their own manufacturing industries – not to mention Germany, Europe’s leading nation in terms of manufacturing. Italy comes in second in this ranking for manufacturing thanks, above all, to all the mid-sized businesses that are exporting and innovating. But young people are still not particularly interested in this. Unfortunately.

The trend is not new. In a study conducted in 2009 by Nando Pagnoncelli and the IPSOS in conjunction with the book Orgoglio industriale (Industrial Pride, published in Italy by Mondadori), the focus groups concerning the opinion young people have of manufacturing showed that most of those surveyed said that they would prefer to work in a call centre than in a factory, or be a store clerk for Armani than be a secretary in the offices of a small-scale manufacturer. The following year, the same study, updated for Assolombarda, came to the same conclusion. Now, the Coldiretti data has again confirmed this trend in the hospitality industry, as well as in agriculture (based on recent data the importance of which is not to be underestimated), with a focus on managing this industry with the sort of technical skills that can bring innovation to an ancient farming culture. The boom in farmhouses and farm tourism, driven in part by organic farming (and the ability to sell produce online), and the renewed popularity of the Italian countryside is confirmation of this trend.

So it’s a complex phenomenon to be looked at carefully. Good food and a rebirth of the hotel industry blend well with the revitalisation of modern agriculture and, above all, with the growth of agriculture as a modern industry and the rebirth of the Italian food and beverage industry. This shift is also the focus of attention of agriculture and industrial policy both in Italy and the EU (with the protection of quality produce and trademarks being a key aspect) and necessarily has traits of good culture of enterprise – in the name of quality.

But manufacturing must not be ignored, even if it may appear to be no longer in fashion, because that is what represents the core of growth in Italy and the country’s positioning internationally. But it does need to be better developed, including in terms of culture and of investment in the central importance of manufacturing, including promoting a culture that speaks to entrepreneurship and the importance of making and of doing good, to the “culture of machines” and “industrial humanism”, to the factory and to modernity. If chefs are becoming all the rage on TV, then it’s up to manufacturing to tell a convincing story of itself whether it be on TV, the Internet or other mainstream media. One interesting initiative in that regard was the Rai Uno miniseries (an idea of Luca Barbareschi) dedicated to Adriano Olivetti and his dream of factories as communities of production and culture, and let’s hope that it’s not an isolated example. An Italy of factories and of quality craftsmanship, of good food and sustainable agriculture, still has much to say and must seek to be better understood and loved. Especially by our youth.

Children learn by playing. As adults, we can produce and innovate through play at work. Within reason, of course, but the idea that play can serve as a means of learning and producing is not new, although it has always been looked at with some suspicion. And yet, it is precisely that sort of mental gymnastics we do when we play that leads to innovative thinking and important leaps forward that would otherwise have been either impossible or significantly more complicated.

This is the idea underlying the latest work by Adam L. Penenberg, Play at Work: How Games Inspire Breakthrough Thinking, which looks into both the theory and practice of the role of play in the workplace. 

The book delves into how games can promote productivity and, in particular, lead to the sort of “breakthrough thinking” that can make the difference between one enterprise and another. The question the book seeks to answer is this: “But what if we could tap into all the energy, engagement, and brainpower that people are already expending and use it for more creative and valuable pursuits?” This is an important question, one which concerns pretty much every theory of business management and which, above all and depending on how one answers it, implies a change in the culture that the enterprise creates both within the organisation and outside of it. 

Penenberg’s answer is that an intelligent use of play in the workplace, and beyond, is gaining footholds in all industries, and businesses that are doing so are achieving unprecedented results. 

The work takes us on a journey through the theory and practice of play at work and includes authoritative examples from organisations such as Microsoft along side intriguing virtual unknowns such as Local Motors, an independent automaker based in Arizona that has used gaming to revolutionise its organisation and capacity for growth.

Play at Work: How Games Inspire Breakthrough Thinking

Adam L. Penenberg 

Portfolio Hardcover, 3 October 2013

Innovate. Research. Transform. Grow. These could be – and should be – some of the fundamental principles of any enterprise worthy of its name, but they aren’t easy to truly put into practice. That’s not always the fault of the business’ leadership, though. To do research and development (the ubiquitous “R&D”), it takes significant funding; it takes time, and it takes the right focus.

It’s also important to understand just what has happened to Italian businesses when it comes to R&D. We need to understand what could have been done better, and we need to try not to make the same mistakes again.

A paper by Leandro D’Aurizio and Marco Marinucci (both with the Bank of Italy’s Economic and Financial Statistics unit) can help us to understand what happened to R&D in Italy from 2008 to 2010. What we find is important, particularly because of the numbers that point to how things really are. In fact, the paper describes research and development strategies using the data from the annual survey of businesses (Invind) conducted by the Bank of Italy itself,

and the results can be summarised into five points that provide bitter confirmation of what we may have only read in the newspapers.

First, the size of the organisation plays a crucial role, with the small to mid-sized businesses having greater difficulty both investing in R&D and producing the various forms of innovation considered than larger firms are experiencing.

Second, enterprises that export show a greater propensity for both investing in R&D and filing patents. Third, a propensity for investing in R&D would appear to be tied, in part, to the approach to management. Fourth, businesses in southern Italy seem to have greater difficulty in investing in R&D and in innovating. Fifth, businesses mainly resort to self-financing, making only limited use of external sources of funding such as banks, venture capitalists or public funding, which appear to have a modest ability to impact on the decision to invest in R&D.

In short, the long road of R&D in Italy is evidently still long and winding.

L’innovazione delle imprese italiane tra il 2008 e il 2010 (Italian firms’ innovation strategies in 2008-2010) 

Leandro D’Aurizio, Marco Marinucci

Bank of Italy Research, Questioni di economia e finanza (Occasional papers), September 2013

On Friday, 18 October, during the Red Dot gala at the Konzerthaus in Berlin, the Pirelli Foundation exhibit “L’anima di gomma. Estetica e tecnica al passo con la moda” (“Heart of Rubber. Beauty and technique in step with fashion”), which was at the Triennale in Milan from 21 June to 24 July 2011, won a Communication Design Award in the 2013 edition of the Red Dot: Gran Prix, one of the most important international design awards.
Selected from among some 6,500 works from 50 nations, the exhibit first took the Red Dot: Best of the Best award, which is given to the best works in each category, before then also winning one of the Red Dot: Gran Prix 2013 awards, the most important of the competition.

“L’anima di gomma. Estetica e tecnica al passo con la moda” used sketches and multimedia installations told the story of Pirelli fashion and related marketing efforts from shortly after the company was founded way back at the end of the 19th century on up to modern times. Over a century of customs and manufacturing history in the quest for new applications of materials and processes, all illustrated in four exhibition rooms: one dedicated to footwear (and rubber soles and heels); one to clothing (raincoats and overcoats); one to the beach (bathing costumes and other water and beach products); and one to Pirelli PZero, the Pirelli project of industrial design applied to fashion. Rubber was the star of the show as it took the shape of a multimedia ball that led visitors through the exhibit and showed them the properties of a material that can be processed in various ways to become a tyre, an elastic thread, fabric and many other objects.

The use of this interactive, multimedia language invited visitors to interact and play with the various components of the exhibit, making it particularly in line with the theme of the 2013 edition of the Red Dot Design Awards, “Inspire the World“, which was one of the reasons that the judges gave the most important award to this Pirelli Foundation project.
Umberto Eco, and Italian writer, described the exhibit in these words: “In this wholly intangible exhibit, one made of images, history and interpretation, we see not the portrait of fashion, but a portrait of the image of fashion. And in that we see the novelty in this presentation. […] As we have already said, there are no objects, just representations, so as to shift our focus from the tangible aspect of fashion to the level of dreams. Indeed, fashion evokes and produces dreams, especially now.”
The Pirelli Foundation worked with following individuals and organisations in the realisation of “L’anima di gomma. Estetica e tecnica al passo con la moda”:

Multimedia and set design
Studio N!03
Architectural design
Federico Colletta, CO3 architetti associati
Art direction and graphic design
Leftloft
Fashion consulting
Francesca De Cherubini, Blade
Structures and setup
Allestimenti Benfenati S.p.A.
Video systems
Eletech
Lighting
iGuzzini,agenzia AMZ

Market is the keyword for growth and finding new spaces in areas of intensive development of public and private consumption, in order to define a benchmark of corporate restructuring with an eye to greater and above all better competitiveness and to map out values ranging from merit to be rewarded to responsibility to be respected, the sustainability of products and production processes to good relations with all the stakeholders involved in company activity in the territory. Market, as a physical and conceptual, legal and economic place, properly defined by clear rules, efficient controls and effective sanctions and driven by free parties who sell, exchange and construct a close-knit fabric of economic and also social and cultural relations. A market, in other words, as lynchpin of a new corporate culture for bringing alive innovation and competition. Innovation in the widest meaning of the term (products and production systems, materials, industrial relations, languages of communication and marketing, services, criteria of governance, etc.). Competition in the dual meaning of “cum petere” (joint involvement in a common purpose) and of entering the arena in order to proclaim a winner. Not parallel convergences but synergies towards balanced and, in fact, sustainable development.

The best Italian companies look to new forms of international markets and create programmes in order to be as “close to the markets” as possible. Large to medium-sized firms, small innovators to industrial areas and production chains have withstood the crisis by in fact staking on exports and on direct investments in countries with more intense growth (from central Europe which looks towards Russia to the USA where the value of industrial manufacturing has been rediscovered, from the Far East to Latin America, with special focus on Brazil and Mexico). They’ve made good use of a radical organisational and production transformation (aimed at innovation, in fact) at that very time during the early years of the new millennium, up to 2007, in which the dynamism of European domestic markets (including Italy) and international markets allowed good margins for investing in growth. They have transformed the crisis into opportunity (often however with a struggle in a tough and tense process) of reorganisation and transformation.

Now those companies (many of the seven thousand medium-sized family-owned yet management-run firms) can look with a somewhat greater degree of confidence towards the future, seeking to drive the admittedly slow growth of Italy as a corporation. They need the support of industrial policy (rewards for research and innovation) and fiscal policy (tax relief, starting from the “wedge”, for those who create permanent jobs). They can form the cornerstone for the strategic decision by the EU to reach, by 2020, a weight of manufacturing in relation to the GDP of more than 20% (only Germany at present has gone beyond the target).

This is a time of major change in Italy and “relational capitalism” has finally come to the end of the line. Soon historians will have to express peaceful critical opinions, neither ideological nor Manichaean, on a long and controversial period in the Italian economy, the one with the domination of Mediobanca, of the right connections and “trade union agreements” and the essential defence of the large private company against invasion by a “public hand” dominated by politics and nepotism. It is definitely a time of change in private industry (above all medium and large in size), considering organisation in fact according to market dynamics and strengthening good competitive cultures. Fewer holdings and more specific focus on the core business as well as streamlined organisations so that most of the business margin goes to developing typical business, products and services. Italian enterprises can in fact find in this process room for benefits: flexibility has always been one of their strengths, and they are well-suited to resilience and intelligent adaptation to change. In globalisation, which is not a “flat and identical world” but a variegated geography of similarities and diversity, our market-related corporate culture can be, even more now than in the past, a tool for solid growth and also a good example for other areas of the world.

The ethics culture of a company is revealed by the conduct of those working there, rather than in the documents and appearance of the same. This is a fascinating idea which conceals a different and complex approach to the issue of corporate culture and its ethical and behavioural aspects. 

This is a topic handled effectively by Andrew Leigh, who for some time has analysed management methods in relation to their ethical and cultural repercussions, in his newly published Ethical Leadership: Creating and Sustaining an Ethical Business Culture. The book, as the author himself says, aims at analysing the role of culture and ethics in organisations. In particular it seeks to make the connections between the two concepts accessible and transparent. 

Above all the approximately 200 pages which make up the book also mention the fact that managers of companies have to be enabled responsibly to demonstrate that their policies are ethically correct. For this reason, in the book, after setting out the theories and starting with the question of what “culture” is in actual fact, some important “work” stages are covered. There is talk therefore of systems and procedures, strategies communication and also of training and skills. Leigh then moves from a corporate horizon to a more global one, discussing the future of corporate ethics in a world where connections are increasingly tight and fast and in which the relationships between ethics and profit appear at times to be volatile and fragile. Everything finally closes with a sort of test in order to assess the actual degree of ethics in an organisation and its people. 

Leigh has written an “American” book which is however suitable reading also for European companies. A book which also contains ideas and provocations yet which questions concepts set in stone and discusses the actual substance of corporate ethics? 

Ethical Leadership: Creating and Sustaining an Ethical Business Culture

Andrew Leigh

Kogan Page, 2013

Family-run businesses still exist and it is likely that they will continue to exist for a considerable time. How did these firms come into being and, above all, how are they developing today, tackling social and economic turbulence which could not be predicted up to a few years ago? The subject is an important one in many respects, last but not least because some of the most important and representative family-run businesses trading today are in Italy. A better understanding of these special enterprises therefore means a better understanding also of the path taken by many of our companies in past decades. All in all it also aids in understanding some of the reasons behind our current economic situation. If then a survey of this kind is performed by comparing Italy with other countries then everything is even more interesting.

A similar survey has been carried out by Andrea Colli and Mats Larsson, the former from the Bocconi University in Milan and the latter from Uppsala University, in their Family business and business history: An example of comparative research, a study recently published in Business History which has two objectives: efficient use of the method of comparative economic analysis and the identification, by this method, of how family firms have evolved in Italy and Sweden. More important still is the result achieved by the two academics and which they themselves effectively explain in their work.

“A comparison between family firms in Italy and Sweden shows that the development of family business in these two countries exhibited extensive similarities during the early decades of the twentieth century. However after World War II the two countries became more diversified in terms of their industrial structure. While Swedish family firms became an important part of national big business, Italian family businesses developed into smaller and more flexible organisations”. However this is not enough as the two continue by explaining how in Sweden family-run businesses have succeeded in covering important roles in industries of high technological intensity; whereas in Italy “even if present among the largest in the country”, the same types of company are mostly found in areas other than high-tech ones and demonstrate an inferior organisational sophistication compared to similar firms in Sweden.

A question of corporate culture or of social and institutional context? Difficult to say for sure. One thing certain is that the work by Colli and Larsson aids in understanding how much has happened and what is still happening.

Family business and business history: An example of comparative research

Andrea Colli, Mats Larsson

Business History – Taylor and Francis, 23 September 2013

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“Pirelli Visiting Professorship In Italian Studies” established to promote the study of italian history and culture.

Pirelli and the prestigious Princeton University have established the Pirelli Visiting Professorship in Italian Studies, a five-year programme within the university’s Department of French and Italian.

Each school year, Princeton University will be inviting a prominent professor or other expert to conduct an on-campus course and to promote activities designed to enhance the Princeton learning experience and expand the reach of its interdisciplinary programmes. Princeton has assigned the 2014 visiting position to the journalist Gianni Riotta, who, assisted by professor Gaetana Marrone-Puglia, will focus on Italian history from post-war to the present day through the study of the Italian films that best depict the traits and dynamics of Italian politics, culture and customs.

The partnership between Pirelli and Princeton is to be launched in January by the university’s Department of French and Italian, and students will be called upon to analyse the period through the preparation of multimedia projects. For these projects, the Pirelli Foundation will be contributing the material and content of its Historical Archives, which exemplify aspects of working life in Italy, the urbanisation of Italian cities, and the modernisation of the country’s technology, culture and customs.

This partnership with Princeton in the fields of mass media and the humanities will enable Pirelli both to contribute to promoting Italian culture abroad and to have a better view of the trends and developments in new media, a field which is of increasing importance in business.