Areas of knowledge, those of manufacturing and machines, that overlap. The analytical knowledge of philosophy which seeks out original keys to interpretation in order to navigate the complexities of companies and markets going through constant change. Those of research and development laboratories, in which the bases for new products and new systems of production are experimented, as well as those of artistic creativity. In an Italy struggling to come out of a recession, still filled with the devastating social effects (loss of jobs, drop in income, fading of hopes, above all for the new generations), the strategy of a manufacturing renaissance (discussed in the blog on 8th January) in fact needs to bring together different skills, able to enrich the human capital and the social capital essential for sustainable growth in environmental and social terms.

As the sociologist Aldo Bonomi, who theorised “molecular capitalism” and the “infinite city” of intelligent manufacturing and services networks spread throughout the territory, rightfully noted, Italian production must become Italian reproduction in order to open up a fourth season, after those of the workshops, industrial buildings and industrial zones. For production chains the time must come when the territory is a source of value in its dimension of a common asset to be regenerated. No longer just a store of knowledge, traditions and resources to be taken within a purely quantitative growth model founded on territorial consumption and social dumping, but instead something which raises the problem of the social and cooperative nature of investments in the knowledge economy. Where, in order to reconstruct the bases of value, manufacturing needs to pollinate the culture of the factory with scientific and social knowledge borne by creatives, professionals and young digital natives. Who in turn, if they want to translate investments in training into income and corresponding jobs, cannot continue to cultivate the utopia of a virtual and de-industrialised capitalism (La sfida della crisi e le cinque metamorfosi, [“The challenge of the crisis and the five metamorphoses”], IlSole24Ore, 23 June).

Those raised by Bonomi are in fact themes dear to Pirelli corporate culture, discussed in depth several times on the pages of this blog and used as the bases for designs and products. A fusion of different competencies within the production system and dialogue from inside industry to the outside.

An example? The recent case of workplaces enlivened by debates on the general themes of philosophy and science, at the end of June, hosting in the auditorium of the Pirelli headquarters, in Bicocca, a section of the “Milanesiana”, directed by Elisabetta Sgarbi, dedicated to “Philosophy, Cinema and a Secret” (with participation, among many others, by Massimo Cacciari, Remo Bodei, Umberto Veronesi, Marco Bellocchio, Tzevan Todorov and Emanuele Severino). Or the experiences exchanged among artists working on the building of large installations at the HangarBicocca (Carsten Nicolai, Tomàs Saraceno, Micol Assael and Wilfredo Prieto) and the engineers and technicians from the Laboratori Pirelli (long and impassioned discussions on nanotechnologies and light, electricity and mechanical strain, applied to art or to the experimentation of new materials for rubber mixes). Theatre and music in the factory, in the new plant in Settimo Torinese, with the structure of the facilities and research laboratories designed by Renzo Piano, according to criteria of “industrial beauty”, in a natural setting, ecologically admirable. Or the factory which becomes the material for tales of work which give shape to books and plays (in a collaboration with publishers such as Mondadori and Laterza or with the Piccolo Teatro di Milano). Or the exhibitions at Fondazione Pirelli and the educational projects of Fondazione Pirelli and HangarBicocca with thousands of children from Milan schools, in order to strengthen and renew relations between industry and education, work and training. All this is a fusion of outlooks and competencies, questions of different cultures and answers rich in “cross contamination”.

Intense activity in view of a better quality of the metropolis as a place of innovative competencies and high-end products, as part of the knowledge economy and, in fact, of industry as a lynchpin of quality development. Another way of bringing to life corporate culture and the corporation as a place of culture, open to culture, producer of culture. This also means working towards a “manufacturing renaissance”. 

Innovation is possible, also and above all starting from the simple things. After all the apparently simplest innovations have often opened up the way to unpredictable approaches. There are no ready-made formulas in innovation, even in companies. What counts more is the experience as told by others, those who in some way have already innovated. 

This is why it is interesting to read 9 storie di ordinaria innovazione [“9 Stores of Ordinary Innovation”], edited by Giusi Carai and Alessio Neri for the digital publisher Asterisk and newly published.

It all began with the spoken accounts by 9 groups of innovators from Reggio Calabria who presented their business plan at “Barcamp di ‘U Web” organised by the association LiberaReggio LAB in the autumn of 2012.

The idea behind this is that young innovators represent the future of the economy and that the Web can be used as what in actual fact it should always be: an infrastructure that promotes growth.

A line-up therefore of business plans or businesses in embryo involved in architecture, social cohesion, correct and transparent information, adding of value to the territory, personal promotion, the fight against organised crime, commerce, publishing and communication and town and city centres. All examples of innovation which is not just theoretical but concrete, practical and actually achieved. 

An e-book to be read in one go, made up of examples linked by a question posed at the beginning of each story: what is innovation? A question to which the creators of one of the businesses narrated gave an intriguing answer, a provocation also to established firms, that innovation is a butterfly which dies soon after it is born. Yet billions of butterflies are born every day.

9 storie di ordinaria innovazione

Giusi Carai and Alessio Neri

Asterisk, 2013

When a new CEO arrives at a company, its management methods, approach to organisation and culture can change. However there is certainty that everything works in the best possible way and above all there is no mathematical formula which automatically connects a new CEO to a forward leap in corporate performance. Even if, as is customary in academic literature and expected by many firms, it is easy to think that the arrival of a new CEO, coming from different firms, is what makes the difference.

Ayse Karaevli and Edward J. Zajac (from the Otto Beisheim School of Management in Vallendar in Germany and the Northwestern University, Kellogg School of Management in Evanston, USA respectively), think that the magic that can be sparked between a new CEO and corporate results is not that obvious – on the contrary. They explain that the implicit or explicit assumption that outsider CEOs will give an advantage in achieving strategic change in companies is not always that true. It takes much more than a new CEO to change the fortunes of a firm.

In order to demonstrate that reality can be different from the theory of many boards of directors, the two researchers, in their When do Outsider CEOs Generate Strategic Change? The Enabling Role of Corporate Stability which has just been published in the Journal of Management Studies, have studied the changes which took place between 1972 and 2010 in a US airline and a chemicals company with a series of different CEOs.

The idea put to the test is that the arrival of an outsider CEO, albeit with many years’ experience, can do little when faced with a firm without organisation, without corporate spirit and without a certain continuity of management.

The results of the research appear to confirm this theory. The actual conditions which the CEO should succeed in modifying constitute according to the two authors the basis for change.

Download pdf

When do Outsider CEOs Generate Strategic Change? The Enabling Role of Corporate Stability 

Ayse Karaevli and Edward J. Zajac

Journal of Management Studies, June 2013.

“Legality is a fundamental principle of competition” and a “basic condition for the proper functioning of the market”. This was the assessment, published on 19 June in Il Sole24Ore, of Paola Severino, the former justice minister of the Monti government and a lawyer that has earned great respect in the realms of both law and business. These important words point to a profound, cultural shift that has been taking place in many segments of the economy for some time now and which is leaving its mark on a new culture of enterprise, one in which there is an ever stronger bond between legality and competitiveness, the desire to invest both domestically and internationally, pride in strong financial performance, and working together as a nation. So legality as a key to development and transparent, well-regulated markets as a dynamic means of selecting the best players and of driving “quality growth”.

Legality as a valuable asset in sustainable growth has been a topic of discussion at Assolombarda for some time now (and a priority issue within the Chairman’s Committee, both when it was led by Alberto Meomartini and now under the guidance of Gianfelice Rocca), connecting the concept with that of culture of enterprise and, above all, with corporate social responsibility, i.e. establishing a company identity and relations with all stakeholders that work towards strong performance, whether it be financial or otherwise, while remaining socially and environmentally sustainable. There has also recently been some discussion about better relations between businesses and the legal system, and so legality and competiveness, the quality of development and of civil life, in the hills of Florence at the Scuola Superiore della Magistratura (Advanced School for Magistrates) in Scandicci as part of the launch of the study programmes for newly appointed magistrates and as part of a meaningful dialogue promoted by the school’s president, Prof. Valerio Onida, between different worlds and with a view to improving the nation’s overall economic culture.

From what perspective are we to look at legality? From, for example, that of the perverse relationship between an excess of laws and regulations and how little they are actually followed (being “a right of the markets and of businesses full of regulations, but virtually free of principles”, as opined by law expert Guido Rossi). Or from that of the corruption business by the mafia and other organised crime found throughout Italy. Or even that of the unfair competition brought about by the “underground economy” and by the continued existence of broad areas of tax evasion. Then there’s the point of view of the limited efficiency and efficacy of the slow, complex legal system, which can no longer meet the needs of civil and criminal justice within a reasonable timeframe or in the form of clear, high-quality rulings. Not to mention that of the poor functioning of the justice system and the crisis on the well-regulated markets giving the advantage to the least scrupulous, most domineering and least lawful players. All of which can only be of detriment to the Italian economy.

An essential reference to the importance of a strategy that unites legality and competitiveness and the economic value of lawfulness can also be found in the annual report of the president of the Italian anti-trust authority, Giuseppe Pitruzzella.  Paola Severino said, “If this message is to be heard by the most sensitive and most reactive segments of the economy, and heard not only as an encouragement to act ethically, but as a means of establishing an actual virtuous circle towards business growth, we will be able to make significant inroads towards a model of fair competition.”  An organisation that follows the rules is stronger, more suited to competing on more advanced international markets, and more open to a broader array of stakeholders than we are seeing in many Italian settings. To this end, we should probably also further motivate the virtuous enterprises, including through a system of rewards, by introducing a “lawfulness rating” into the “Cresci Italia” (Grow Italy) decree to be used for relations between businesses, banks and government. As Severino explains, “The speed with which the anti-trust authority adopted the executive regulations and the Ministry of Justice, in turn, issued the implementing decree are signs of how important this entity is seen as being in increasing confidence in a healthy economy and in a market that encourages legality and fights the infiltration of organised crime, corruption and other forms of fiscal and corporate crime. Crimes that earn easy money by eating away at the healthy part of the industry and irreparably damaging the image of the nation and its best businesspeople.”

Institutions ready to set up a system of measuring legality and businesses aware of the importance of obtaining a good rating. Severino concludes, “The encouraging number of rating requests received by the authority over a short timespan shows that the mechanism is seen as being helpful by those who have understood that the most damaging thing to Italy’s economy is unfair competition, where it’s not the best that wins, but those who think they’re more clever than the rest, who look for shortcuts and who throw stumbling blocks in the paths of the more virtuous businesses.  Only widespread awareness of the scope and irreparability of this harm will be able to provide the defence we need against unlawfulness and bring out those who continue to believe, and to grow, in merit.” In other words, good market culture of enterprise. Legal.

It’s easy to say it will take innovation for businesses, and for the economy in general, to change their fate. But these words need to be followed by action. We need the capacity to innovate and, above all, to think outside the box. This is also true in business management, in creating, day by day, that manufacturing culture that has made countless Italian organisations great and that now, if not actually against the ropes, is at least starting to breathe heavy. Businesses do continue to innovate, but at times they don’t even realise it.

The how, when and why is what we need to try to understand. This is what Riccardo Luna, a journalist and avid Internet user, has sought to do in his enjoyable book, Cambiamo tutto! La rivoluzione degli innovatori (Let’s change everything! The innovators’ revolution). This recently published work gives us an idea how innovation is still taking place both in Italy and around the world, starting with the Internet and through to the actual production of goods and services.

It’s a page-turner of 150 pages packed with examples right up to current times. There’s Apple, of course, the rest of the Silicon Valley, Olivetti, and even a few businesses that are virtually unheard of – the dreams of people who have tried and succeeded, but also those missed opportunities that teach us where we went wrong.

This exploration of the innovator’s world starts with a prologue, then takes six leaps forward towards an epilogue that wraps it all up in the common sense of good old Italian industry. Along the way, we read of “startuppers”, “makers”, “dreamers” and “civic hackers”, of “biopunk” and “iSchools”, to describe the various aspects of innovation – who started, who made it, who had a dream, who works for society, science or education – before delivering a forward-looking message: Change, like innovation, is possible, even in business and even in Italy.

All it takes is to be grounded in the present while looking forward to the future. The entire work closes, as mentioned above, with the wise words of an Italian businessman: “This is what the future is. Making things, producing, inventing solutions to problems. And never giving up.”

Cambiamo tutto! La rivoluzione degli innovatori

Riccardo Luna

Laterza, 2013

It’s become a given: markets both foreign and domestic are commanded, in part, through a strong online presence. Of course, behind the Internet presence there always needs to be a serious product, an effective organisation and a real business. But being online, being able to dialogue with potential customers and new markets in real time and keeping an eye on the competition via the web are key factors for companies wanting to break free from their limited local markets. They are also factors that will also have a rapid impact on that company’s corporate culture and on the way it interacts with the outside world.

For this reason, a better understanding of how the Internet enters an organisation and, above all, how that organisation makes use of it is crucial to understanding how the organisation will evolve and what the future holds.

Charmaine Glavas and Shane Mathews (of Queensland University of Technology; Brisbane, Australia) have done just that by exploring the relationship between the characteristics of international entrepreneurship and the use of the Internet in international business processes.

The underlying assumption is that Internet capabilities truly are necessary in business. “However,” as explained in the study How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm, published in May issue of the International Business Review, “international entrepreneurship characteristics which are seen as a precursor to leveraging Internet capabilities are still vague.” To understand what this means and how it actually manifests itself, the authors looked at eight case studies of small and medium-sized enterprises in the tourism industry in order to compare their level of entrepreneurship and their ability to use the web in business processes. What emerged is a snapshot that can be of use in other industries and for other types of businesses, as well. As well as one surprise: the ability of an organisation to take on the risks of international markets and the degree of success it will have are not necessarily the conditions that lead to an effective use of the Internet. In other words, the Internet is necessary, but it’s not nearly enough on its own.

How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm

Charmaine Glavas & Shane Mathews

International Business Review, May 2013.

In today’s global economy, are European businesses are being governed in the same way as in the U.S.?  And, above all, are the rules of governance the same? These are important questions in better understanding the different corporate cultures found on either side of the Atlantic, cultures that appear, in many ways, to be far apart, but which could also now be coming closer together. So long as the rules and laws of governance allow it.

Whitney K. Taylor has taken a close look at the matter in his thesis submitted in partial fulfilment of the requirements for the degree of Master of Arts in European Union Studies in the Graduate College of the University of Illinois at Urbana-Champaign, which he obtained just a few weeks ago. Entitled “Dueling shares: comparative EU-US corporate governance practices”, the work looks at the cultural and corporate rules, attitudes and other mechanisms that are tied to the corporate governance of businesses in the U.S. and Europe and is particularly important because of the method that Taylor has used. He starts with empirical evidence taken from 24 case studies of actual organisations such as Danone, Dassault, Naturex and Total in Europe, and of IBM, Apple, Google, Exxon, Kellog in the U.S., while also referring to a wide range of literature on the topic.  Of these 24 organisations, he then uncovers any unwritten procedures and looks at the rules of conduct, the laws that apply, and how the organisations have evolved.

The current rules of governance are then seen in relation to the histories and societies that have characterised the U.S. and Europe. The goal of the study was to determine, in Taylor’s words, “whether divergences still exist, and why these divergences may persist”. Or in other words, “Will there come a day in which the rules of governance of EU and US companies can be the same?”

Dueling shares: comparative EU-US corporate governance practices

Whitney K. Taylor

Graduate College of the University of Illinois at Urbana-Champaign

An eventful June with “stories” and exhibits at which the Pirelli Foundation is presenting a number of documents from the Pirelli Historical Archives.

The exhibit “TECH STORIES. Politecnico di Milano 1863-2013” kicked off on 13 June and is an event rich with stories of architecture, design and engineering to celebrate the 150th anniversary of Politecnico di Milano, a university that is the embodiment of excellence in innovation, technology and education in Italy and throughout the world. The exhibit tells the stories of the most important people and events from the history of Politecnico, which educated some of the most prominent Italian architects, engineers and business people, including Giovanni Battista Pirelli, who was to go on to work in the rubber industry after graduating in 1869. “L’impresa della gomma” (The enterprise of rubber) is the title for the section dedicated to Pirelli, which features historical materials documenting some of the most important milestones from the history of this well-known Milan tyre manufacturer. Along side photos of the graduating class of 1869 and the hand-written letters of Professor Colombo to Giovanni Battista Pirelli, there is the photo of the first Milan factory in Via Ponte Seveso, catalogues from the period, and some of the most famous Pirelli advertisements by Bob Noorda, Alessandro Mendini and Armando Testa that are preserved in our Historical Archives. The exhibit will be running from 13 June to 10 December at the Museum of Science and Technology in Milan.

“Rinascita. Storie dell’italia che ce l’ha fatta” (Rebirth. Stories of an Italy that made it) tells another story, that of twenty years of Italian artistic and industrial production which made Italy the land of design, fashion and creativity. It is the story of the rise of original Italian products that were to become global status symbols, such as Pirelli’s Cinturato tyres, and which tell the story of the transformation of Italian industry and the Italian way of life. Stories of an Italy that made it.

Featured from our archives, there are a number of the company’s advertisements, photos of the Pirelli building (nicknamed the Pirellone for its great height), and issues of the historical Pirelli magazine, which was published from 1948 to 1972.

The exhibit will be running from 21 June to 2 November at Palazzo Mazzetti in Asti. 

“Polytechnic culture”: the ability to unite science and the humanities while constantly seeking new forms of harmony that can lead to both economic and social growth. It is also an attitude that is still best expressed, in Italy, in Milan and in the Lombardy region generally, first and foremost in the “culture of Politecnico”, the Milan university that is a synthesis of education and research, of academic and entrepreneurial innovation, so much so that it is among the world’s top 50 universities in the field of technology and engineering (source: the Times Higher Education ranking of top universities). Milestones represent decisions that have been made, and celebrating milestones keeps those decisions fresh in our minds and keeps us aware of our commitment to create our future. Celebrating the 150th anniversary of Politecnico di Milano, with all of the celebratory conferences, seminars, exhibits (such as the one currently under way at the Museum of Science and Technology), publications and other events, serves to tell the people of Milan, of Italy and of the rest of Europe both how and why, right here in Milan, such an excellent university came about and is still, after a century and a half, among the leading sources of knowledge and innovation in Europe.

History. From when it was founded with the crucial contribution of Giuseppe Colombo, a man of both science and industry (as one of the founding fathers of Edison with the construction of the first city power plant in Europe in 1883) to the studies of Enrico Forlanini and the first prototype of a helicopter (1877); from Europe’s first electronic calculator, which Luigi Dadda took to the U.S. in 1954, to the chemistry studies that helped Giulio Natta receive the Nobel Prize in 1963 (with the creation of Moplen, a revolutionary plastic that changed Italian habits and customs during the economic boom). Today, Politecnico is made up of a dense network of relationships with leading international centres of research and innovation, and out of the university’s labs come some of the best Italian high-tech start-ups.

When you think of Politecnico, you think of industry, such as the companies of the Schiapparellis and the Ucellis, or Edison, or even Pirelli, which was created in 1872 by Giovan Battista Pirelli, a Politecnico alumnus who studied throughout Europe with the help of the university. You also think of the architecture of Gio Ponti and Aldo Rossi, of Renzo Piano and Gae Aulenti, or the design work of Marco Zanuso and Vico Magistretti. You think of that special propensity to unite science, literature and the arts as seen in the work of Carlo Emilio Gadda and Fausto Melotti. It is a century and a half of history marked by countless names of engineers, entrepreneurs, scientists and other visionaries, all highly skilled at managing processes in which innovation is not only the discovery of new technologies, but is also, and above all, that typically Italian form of “incremental innovation” – an ingenious adaptation or modification of a machine that radically changes a production process, the addition of a chemical compound that makes a material stronger or lighter, or a new relationship between technology and the organisation of labour. The concept of “civiltà delle macchine” (machine civilization/civility) is no oxymoron. It is a poetic metaphor for the synthesis of man’s intelligence and the transformation of machinery, such that the machine can better obey our commands and be safer and more productive – more “civil”.

A culture of design and a culture of production, as is often said among business people, engineers, designers and other technological – or rather, “polytechnic” – circles. In an Italy that was approaching modernity, Politecnico di Milano was, 150 years ago, an incubator for robust industry. Today, as “post-modernism” has demonstrated its fragility and rushed imbalances (too much finance, too much distortion in the ephemeral culture – or, better, “sub-culture” – of superficiality), a place of education and research such as that of Politecnico can reiterate its relevance and its role in creating the future as we rediscover, “polytechnically”, the central role played by industry. It is an international role that is so typical of Milan and of Italy as a whole.

All challenges that organisations and individuals face each and every day require us to make a change in outlook, a qualitative shift or otherwise take things to the next level. It’s easy to say, but exceptionally difficult to do. And on our quest to do so, we all too often come across business gurus and other self-proclaimed experts who actually take us farther from our goal, rather than helping us to work better.

There are, however, always a few diamonds in the rough in the vast landscape of works seeking to help us “live and work better”. One such example is “Leading strategically. New thinking for entrepreneurs, organizations and personal life”, a recently published book of just over 140 pages written by Hassan Yemer, a management consultant who seeks to bring together strategies for business and strategies for life by starting with a single question: “What do I want to be, a leader or a follower?”

The result is a journey at breakneck pace through approaches to anticipating events without being overwhelmed by those events. It is a voyage of two parts: identifying a form of “strategic thinking” for modern times and analysing the conduct of organisations and their leaders before recommending a few corrections that can be made. It starts from the individual and then leads to the organisation.

Yemer’s is a work to be studied with care, to be assessed and to be verified, but it is also a stimulating, thought-provoking work and a sort of challenge – something to ponder. Take, for example, what Yemer writes on the first pages of his book: “Leadership does not depend solely on the desire to lead.” There must be more than just that. There is something extra that permeates true leaders and that, at the end of the day, also characterises the culture of enterprise that finds success in the marketplace. This is why he then asks the question, “What makes a good leader?”

Leading strategically. New thinking for entrepreneurs, organizations and personal life.

Hassan Yemer

XLibris Corporation, May 2013