Birkinshaw’s Four Dimensions

The 4 Dimensions of Birkinshaw is a Tool that helps you understand how Management Processes Works.

• Its name comes from the person who invented it: Julian Birkinshaw,

 

To do so, this Tool breaks down every Management process into 4 dimensions:

• How Activities are managed.
• How Decisions are managed.
• How Objectives are managed.
• How Motivation is managed.

 

It proposes that there are 2 ways of Managing each Dimension:

• A Traditional and an Alternative way.

 

1. Activities: How the day-to-day activities are carried out.

• Bureaucracy: If there are Procedures to comply with.
• Emergence: If things are prioritized by Urgency.

 

2. Decisions: How decisions are made.

• Hierarchy: Following a strict Hierarchical scheme.
• Collective: With common Forums where things are discussed.

 

3. Objectives: How Goals are Set.

• Alignment: When everybody follows the same Guideline.
• Obliquity: When Disruptive and diverse Goals are allowed.

 

4. Motivation: How Employees are Motivated.

• Extrinsic: With external Rewards such as Rises or Promotions.
• Intrinsic: Bring employees closer to what they Love.

 

Before sharing some examples with you, we will give you some Tips on How to use Birkinshaw’s Dimensions:

Employees should be part of the evaluation Process.

• Sometimes Managers are terrible at evaluating themselves.

 

The bigger the Company, the more Hierarchy and Bureaucracy there will be.

• Small companies are Flexible and Large companies have more Resources.

 

There is no Correct way to Manage.

• Different Companies and Situations require different types of Management.

 

Difficult times require more Flexibility.

• So that the company can take Unpopular and Important decisions faster.

 

Good times require more Rigidity in Management.

• To make it more difficult for the Company to waste money on absurd things.

Now, we’ll share some Useful examples with you:

We will try to imagine How, some of the most influential CEOs of our time Manage/ed their Companies.

• We know that this analysis won’t be as accurate as we’d like.

 

However, we will try to use them as an example of different successful ways of running Businesses.

 

Let’s begin:

 

Activities: Emergence.

• Why?: Although Tesla is already a Huge company, it is still being Defined.
  • They release new and different news every month.
    • About Manufacturing issues, new technologies, products, etc.

 

Decisions: Hierarchy.

• Why?: Elon Musk makes all the important decisions in Tesla.
  • Much of the success of Tesla is due to the authority of Elon Musk.
    • Can you name another Tesla employee?

 

Objectives: Obliquity.

• Why?: Tesla investigates very different fields, some of them with opposite objectives.
  • With such diversification, the Goals cannot always be aligned.
    • And even more so, when the Company is not yet perfectly defined.

 

Motivation: Intrinsic.

• Why?: Lot of people working for Tesla both “believe” in the Project, and Elon Musk.
  • Tesla and Elon Musk have a “messianic aura” that attracts Clients and Employees.
    • The company is not yet as stable as others, but the engineers want to work for Tesla.

 

Elon Musk’s Management Style

 

Activities: Bureaucracy – Emergence.

• Why?: Even though Apple is a giant company, it continues to innovate as a Start-Up.
  • They have Products that innovate little by little (MacBook, iMac, etc).
    • On the other hand, every few years, they hit the Market with unexpected technology.

 

Decisions: Hierarchy.

• Why?: Steve Jobs was known to be very tough and stubborn.
  • He ruled Apple with an iron fist.
    • He was right most of the time, and that didn’t help his character.

 

Objectives: Alignment.

• Why?: Jobs has always conceived Apple products as part of a whole.
  • He always wanted to create an Apple environment, and he succeeded..
    • What is good for one Product/Department is good for the entire Company.

 

Motivation: Intrinsic.

• Why?: Steve Jobs was convinced that Apple would change the World.
  • He regarded Apple as much more than a simple Company.
    • There are stories about Jobs convincing employees with transcendental goals.

 

Steve Jobs’ Management Style

 

Activities: Bureaucracy.

• Why?: Buffet Analyzes and waits until an Investment meets his requirements.
  • He methodically calculates how much a company is worth and what price is fair.
    • He doesn’t jump from one stock to another

 

Decisions: Collective.

• Why?: Buffet makes decisions together with Charlie Munger and Greg Abel.
  • He respects their perspectives and trust them.
    • They all have different knowledge and Skills.

 

Objectives: Alignment.

• Why?: All investments comply with Berkshire’s Value Investing philosophy.
  • They stick to the principle that has made them success: Invest in Good Companies.
    • That doesn’t mean that sometimes they commit mistakes.

 

Motivation: Extrinsic.

• Why?: Berkshire Hathaway doesn’t have the aura of Tesla or Apple.
  • However, Warren Buffet is an extremely admired influential figure.
    • We just suspect that people work in Berkshire for the money (extrinsic motivation).

 

Warren Buffet’s Management Style

 

Activities: Bureaucracy – Emergence.

• Why?: Bill Gates has always had to balance between innovation and improvement.
  • Improve existing products little by little without enraging his Clients…
    • … And introducing new disruptive technologies to be leaders in innovation.

 

Decisions: Collective.

• Why?: Although surely Gates has a strong character he seems a reasonable Leader.
  • Bill Gates has always highlighted Paul Allen’s figure; his friend and Microsoft co-founder.
    • It seems that his temperament improved over the years.

 

Objectives: Obliquity.

• Why?: Microsoft is a diverse company with opposed Goals in different Products.
  • What is good for one Department may not be good for another.
    • If a new Product is successful, maybe another department will disappear.

 

Motivation: Extrinsic.

• Why?: Microsoft is one of the most innovative companies ever, but it lacks an Aura.
  • While people regard Apple or Tesla almost as Religions…
    • … Microsoft has never intended to be more than a Technology Company.

 

Bill Gates’ Management Style

The 4 Dimensions of Birkinshaw is a Tool that helps you understand how Management Processes Works.

To do so, this Tool breaks down every Management process into 4 dimensions:

• Activities.
• Decisions.
• Objectives.
• Motivation.

 

It proposes that there are 2 ways Managing each Dimension:

• A Traditional and an Alternative way.

 

Tips on How to use Birkinshaw’s Dimensions effectively:

• Employees should be part of the evaluation Process.
• The bigger the Company, the more Hierarchy and Bureaucracy there will be.
• There is no Correct way to Manage.
• Difficult times require more Flexibility.
• Good times require more Rigidity in Management.