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Thursday, August 11, 2005

Insight from HBR - Linux and Toyota

I usually read a lot about Consulting, about Management and Strategy in Business. But in the latest months, few articles managed to impress me.

Still, last night I had some wonderful experience with an article in Harvard Business Review that created a parallel between the Linux developers community and the Toyota cars manufacturer about the way they act to changes, the way they work with their suppliers and partners and the entire way-of-thinking around it.

The article is simply great. Too bad it is not free (good things don't always come for free), but I can give you some insight about it. For those of you interested, mail me at mihai.botea AT gmail.com and we can discuss more.

Otherwise, just thing for yourself about how Linux managed to become a great business by relaying only on freelancers passion and how Toyota manages not to halt production when a fire destroys one of their main suppliers factory. Keep in mind that Toyota works with parts stocks that last some hours, not days.

Here is an excerpt: "Toyota is remarkably similar to Linux in the way it blends key characteristics of both markets and hierarchies. Like markets, the Toyota and Linux communities can be self-organizing, but unlike markets, they don’t use cash or contracts at critical junctures. Like hierarchies, Toyota and Linux enjoy low transaction costs, but unlike hierarchies, their members may belong to many different organizations (or to none at all) and are not corseted by specific, predefined roles and responsibilities. And like hierarchies, members share a common purpose, but that purpose emanates from self-motivation rather than from the external incentives or sanctions that hierarchies generally impose. In these respects, Toyota and Linux represent the best of both worlds. An analysis of their common characteristics suggests how high-performance organizations remain productive and inventive even under grueling conditions. We believe those lessons can significantly improve the way work in most organizations gets done."

Posted by Mihai : 8/11/2005 05:15:00 pm