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Contact Senior Editor Julie Bort In the middle
The Silicon Valley Computer Society
Joint Venture: Silicon Valley Network
Synesis, Inc. Web site
National Engineering Search
Author AnnaLee Saxenian's home page
Greetings from Silicon Beach
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Copyright, 1995-2001 Network World, Inc. All rights reserved. |
"When a West Coast company is dealing with an East Coast company, it may feel like a foreign country. There are real and distinct cultures," says Jessica Lipnack, co-author of Virtual Teams: Reaching Across Space, Time, and Organizations with Technology and co-CEO of NetAge, a West Newton, Mass.-based software vendor and consultancy. "There are different presumptions about what is fair, what trust is."
For instance, what if a long-time employee quits a job at a large corporation to work for a prospective customer? Chances are, a Silicon Valley employer would consider the person a friend, but a New England firm would label him a traitor, Lipnack says.
Issues of trust are tiles in the larger mosaic of management styles. The coasts have vastly different characteristics when it comes to definitions of competitors, the acceptable treatment of employees and the sacredness of information. These differences are sure to clash whenever a person in one region needs to manage someone in another, says Fred Townsend, president of the Silicon Valley Computer Society and an engineer for Luxtron, a Santa Clara, Calif., manufacturer at which he manages bicoastal virtual teams.
Authors of Survival of the Smartest contend that Silicon Valley's management style makes the region's firms more successful than their New England counterparts. The book, based on an international survey of hardware vendors conducted by Stanford University in California and Augsburg University in Germany, identifies five areas of success that make up a so-called Organizational IQ. The components are:
As a whole, Silicon Valley firms scored better than companies in any other region of the world, says Johannes Ziegler, the book's co-author and founder of Synesis, a Palo Alto consulting firm that teaches Organizational IQ principles. West Coast vendors were more likely to score high in areas related to information sharing, such as external information awareness.
"On the East Coast, managers would know
market share - which is pretty public information - but not, say, unit costs. Managers in Silicon Valley were more likely to know that type of data," Ziegler says.
The research in Survival of the Smartest isn't the only to show that Silicon Valley has an edge. Some 55 Silicon Valley companies appear on the Network World 200 list, compared with 17 New England companies. That means Silicon Valley firms comprise 28% of the NW200 and New England firms just 9%.
In 1994, Harvard University Press published a groundbreaking book, Regional Advantage: Culture and Competition in Silicon Valley and Route 128. In it, author AnnaLee Saxenian argues that Silicon Valley's edge is an open, decentralized and cooperative corporate culture, while New England tends to rely on an autocratic, independent and self-sufficient style. "The differences run deeper than just attitudes and culture to the way firms or institutions are organized in the two places," Saxenian says.
"Collegiate" is how John McHugh, general manager of Hewlett-Packard's ProCurve Networking Business in Roseville, Calif., describes the West's corporate culture. HP is generally acknowledged as one of the founders of Silicon Valley and its decentralized management style.
West Coast companies tend to be less structured and are rarely driven from the top, McHugh says. But with East Coast firms, which generally have a more clearly defined hierarchy, "If you're run by one individual and you get off track, you're in trouble," he says.
Likewise, Lipnack attests to New England's staunch self-sufficiency. Four years ago, she helped form MassNEt, the New England incarnation of the Joint Venture Silicon Valley Network. But MassNEt never took off - it was impossible to get companies to work with firms outside their niche, she says.
Regional cooperation isn't completely unheard of in New England today, but there's plenty of room for improvement. Large companies have begun to consort on a curriculum
for local schools. "Sometimes we are so competitive that we miss opportunities to collaborate, but we're trying to address that," says Ken Moekler, director of worldwide staffing for EMC in Milford, Mass.
Meanwhile, Joint Venture lords over five initiatives and collaborates with four affiliated professional organizations.
In all fairness, New England has a double hurdle when it comes to collaboration. Not only does the region culturally resist the notion, but it's also more industrially diverse than Silicon Valley. While technology isn't the Valley's only industry, it is the dominant one. With everyone in the Valley speaking the same digital language, cooperating is that much easier.
Just a nanosecond
Yet New England has something Silicon Valley desperately needs: history. In more than 200 years of being an economic center, New England has learned a crucial lesson - when one opportunity runs out, another appears. So even though those in the East are every bit as determined to succeed as their West Coast counterparts, they don't seem as manic about it.
If self-sufficiency is New England's hubris, then entrepreneurial spirit is certainly the Valley's. Like the microchip that spawned the area's high-tech industry, the speed of business in Silicon Valley increases exponentially every year. For instance, the 50 fastest growing companies in 1998 grew at least 650% and averaged a five-year growth rate of 3,319%, according to Joint Venture's annual list.
Things are taken to an extreme in the Valley. "We tend to focus on a few things excessively," says Beau Vrolyk, senior vice president of the computer systems business unit for Silicon Graphics in Mountain View, Calif. People work 16 to 18 hours per day; Vrolyk says it's not uncommon for him to hold a mandatory meeting at 9:30 p.m.
Such an attitude is appalling to many New Englanders and downright abusive to employees in other areas of the country, such as the Midwest. The pace is also a hardship for those living it.
"There's a reason why the divorce rate is high in California. We tend to work people for 25 days straight and then wonder why they don't make good decisions," Vrolyk says. "Midwesterners who go home at 5:30 aren't goofing off, and they may be even more productive because they've gotten enough sleep."
Because of the work-till-you-drop culture, seemingly insignificant items can become disproportionately important in Silicon Valley, says Piyush Patel, senior vice president of engineering for Cabletron in Rochester, N.H., and former CEO of YAGO Systems in Sunnyvale, Calif. For example, when Cabletron purchased YAGO last year, it tried to halt YAGO's practice of providing free snacks for employees. Near mutiny ensued on the West Coast, and Cabletron bowed to the pressure.
"Cabletron recognized that we had to run our division independently, like the free snacks. It seemed like a small thing, but it became a religious issue," Patel laughs. "For us, free snacks make sense. You don't want your engineers to take a break and go out."
Perhaps one of the biggest by-products of the Valley's excessive growth is an out-of-control cost of living. Affordable housing in the San Francisco Bay area simply doesn't exist. As of the fourth quarter of 1998, the median cost of a home in San Francisco was $325,800, according to the National Association of Realtors. The pricey real estate pushes Valley workers into houses outside the Bay area, then makes them tackle tremendously long commutes.
"You see people doing 200-mile-a-day commutes. To tell people they have to be here at 8 a.m. or they'll be frowned upon is ridiculous," Luxtron's Townsend says. "I've got programmers who don't come in until noon and stay past midnight."
Flex time and telecommuting make management more difficult, so managers rely more heavily on e-mail and less on face-to-face meetings.
With a median home cost of $214,900 in Boston, New England housing is expensive, too. However, workers can find relatively affordable homes within a 30-minute commute. Options are even better in the suburbs, where companies such as EMC are located.
Why, then, with the labor shortage so intense, would Silicon Valley workers put up with such long hours and the high cost of living? For some, it's a sense that the Valley is the hot spot for an IT career. For others, it's the allure of cashing in on a successful start-up.
In the long run, both coasts could stand to learn from one another. The West teaches that sharing is good for everyone, and the East teaches that speed isn't the only factor in success.