INTRODUCTION
When I first succeeded my father, for me entrepreneurship was making ideas work in a technical sense. Nowadays it is much more how we – my partner Nico van Putten and me – can deal in a constructive way with the qualities that this community offers. (Raoul Voeten, engineer/entrepreneur of Bradford, December 2005)
This chapter analyses the performance and survival of familial companies in the domain of a techno-venture. What is the common ground between Bill Gates, Michael Dell, Larry Ellison and Steve Jobs? Every one of them has created his own company from scratch. Furthermore, these founders have built an empire in the domain of information technology, telecom- munications and the grey matter of the brain. Why and how did these com- panies develop in such an impressive way, in a technological and especially economic perspective? How can we understand this success? First, behind such industrial mega performances emerge some remarkable persons – their founders. What are the determinants that stimulated them to create and develop their business? Apparently, they have the talent to organize and sustain the growth of their business. The way the community created by founders acts can be another explanation of such success. Is the com- munity effective because it adopted the spirit of the founder, or has the community developed its own dynamics and used the talents of the founder as a stepping-stone to implement its own effective working patterns? In other words: what is crucial in a successful entrepreneur in a high-tech venture? Is it the intuition and experience of the founder or is it the oppor- tunity-driven perception of the community? More specifically, regarding
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the engineer/entrepreneur, the frequently asked question arises whether he or she is a little autistic by nature or a team player at heart.
The exploration will be illustrated by the case of the Bradford company.
We have focused on the aerospace industry to illustrate a case of a start-up in a technological sector. Bradford’s evolution will be analysed from the moment of its founding. We could have studied other sectors such as the food industry, automotive industry or services. However, we have chosen the European aerospace sector because it connects the traditional indus- trial world with the knowledge society. A recent study from Harvard in this sector (Wasserman et al., 2001) shows that during the last 19 years some 532 high-tech companies have been founded. This is certainly a substantial amount of techno-start-ups that is worth investigating. Despite the large literature on leadership on the question, ‘Does leadership matter?’, Wasserman concludes that previous studies have diverged in their assess- ments of the impact of chief executive officers (CEOs) on company performance. Therefore Wasserman focuses on the reframed question:
‘When does leadership matter?’. The study shows that the influence of the CEO in the high-tech sector is more important in comparison with other sectors. This outcome is important for our study on cooperation as we want to investigate whether cooperation does matter in a high-tech venture and what is the influence of the entrepreneur.
An exploration of cooperation opens various methodological issues.
First, what is the most interesting focus of research? Will it be the individ- ual entrepreneur, or the community? Do we need to explore the conscious part of the mind, or the unconscious domain where we might find the intu- itive and emotional context of reason? Will there be issues of masculinity or femininity? Of course, we could start our analysis from the idea that is embodied in the tradition of René Descartes, Immanuel Kant and many others to view the entrepreneurial mind as prior to, and independent of, language. Given that the object of study is at the crossroads of many sci- ences we prefer an approach from the grounded theory of interactions between mindsets and physical states of individuals. However, the most original contribution in this chapter might be to look at a high-tech venture from the perspective of human sciences. Traditionally, the success or failure of a high-tech venture is first and foremost seen as an issue of technology.
Furthermore, the question could be: what is the right mix of ‘human’ and technology for sustaining the success of a high-tech venture?
In sum, we tell a story of the myth of the Bradford high-tech venture.
However, we are aware that our approach demands a good deal of patience from the reader as we want to use the ‘myth’ of Bradford as an example within a framework of analysis. First, the narrative approach is an analytical method as such. To understand Bradford as a case we further need to under-
stand the rather complex context of European aerospace policy. Moreover, by using psychological and sociological methods, the scientific framework focused on cooperation is hybrid by nature. And last, but not least, these methods and frameworks have not been used before, and therefore a series of relevant scientific methodological issues should also be explored.
High-tech Venture and Cooperation
The first association one might have about an engineer/entrepreneur who is involved in a techno-start-up is with an innovative product. For instance, some engineer has a brilliant idea and succeeds in designing a product and making it reproducible. Then, he (or she) realizes that other people are needed to produce and sell it. He has found investors that believe in the profitability of launching the product in a certain market. As a founder of a company he hires the first employee. This last step can be qualified as a critical incident (Flanagan, 1954). Of course, this marks the moment when statisticians will say that another company has succeeded in climbing the high entry barrier of a high-technology sector, and the European Commission would conclude that another network of knowledge creation has been added to a strategic sector, while economists could evaluate whether this milestone might affect one of the five competitive forces as used by Porter (1990).
However, those are not the reasons to label the hiring of personnel as a
‘critical incident’. The reason is hidden in the expectations of both entre- preneur and employee on what the labour relation is about. In most cases, the entrepreneur thinks that she/he is hiring ‘hands’ or ‘knowledge’ when hiring her/his first employee. This is the first pitfall. To a founder it might be obvious how to behave to obtain the results aimed for, while an employee is just offering his/her skills, without even being aware of the personal drive of the founder. This situation could result in a perpetual monologue of the entrepreneur or it could lead to some kind of dialogue between employer and employees, accompanied by some sort of negotiation process. Which of the outcomes will become reality is more dependent on how the entre- preneur is managing the expectation in the relation than on the focus on the technical dimension of the product or on the system of reproduction (AWVN, 2005). In terms of a negotiation process, the process of hiring per- sonnel can be seen as follows: initially, the entrepreneur will be focused on enlarging the capacity of content in know-how or show-how. When the entrepreneur is not aware of the need to distinguish between content (the product) and relation (the expectations of the employee), the chances are great that he/she will neglect the relational aspect. However, even in these conditions, with only a few employees the chance that a constructive
dialogue will eventually develop is quite high. As soon as the number of employees starts to grow, the direct influence of the entrepreneur on the individual manager or employee will diminish. Instead, his/her intentions and beliefs will be heard indirectly using the voices of hierarchy and the available systems of communication. In this stage, a more professional cor- porate culture is developed. In some companies with a long history, such as Siemens, Stora Enso or the Rabobank, the original ethos of the founder is still alive, while in other companies other cultural beliefs have developed.
Here, the relevant question is whether the founder/owner can manage to be a team player or develop such skills by nurturing them within the company.
This chapter explores the mechanisms through which the entrepreneur and his/her managers or employees interact. This means that we have to deal with personal traits, that is, the psychological dimension and the cul- tural settings, which are typical sociological dimensions. In order to specify a research question we have to focus further on what precisely is the inter- action between the person of the engineer/entrepreneur and his/her com- munity of practice. Here we shall exclude from the exploration the interaction based on economic motives, that is competition. What we shall look for are patterns of cooperation. But where does cooperation start? Is it already in the brain or the heart of the engineer/entrepreneur?
Is Cooperation a Necessary Condition for Success?
First, at the founders’ level the creation of a start-up can be explained as a means of survival (Drillon, 2005). This can be the result of an innate drive. If this is the case, then cooperation would start in the brain or the heart of the individual, an orientation that is dictated by the way in which the brain operates (see the subsection on the psycho-analytical approach).
A critical incident that is equally important in the survival of the company is hidden in the transfer of power from the founders who have created the firm to the successors who will take care of its further development. The selection of successors is crucial for the survival of the firm. In the high- tech sector, where the longer term is filled with uncertainty and risk, you must be able to imagine the future, be decisive in complex matters, and be radical in shifts, given the changing context of the company. This requires capabilities that are related to know-how (content) and also to the know- who (relation).
Second, between the different stakeholders, cooperation can be seen as a process that occurs when people meet. Here the interaction is leading. In order to explore this, we shall describe how a community of practice oper- ates regarding cooperation. How does cooperation contribute to success?
From the first step of the creation of a start-up the founder is surrounded
by people who are involved in the initial activities, the relevant network, the availability of human resources and the regional conditions of an eco- nomic, political or technological nature. The force of a team of founding fathers is well known. For example, Bill Gates formed a duo with Paul Allen, Bill Hewlett with David Packard. With their complementary com- petences such teams can be very productive. Thus people with comple- mentary competences can handle a larger spectrum of leadership than they would be able to do on their own. This complementarity develops from family relations or can grow between colleagues or former members of a team in a company. Of course, complementarity in a team is not simply a natural gift; the positive relations between founders can deteriorate and then become a source of conflicts.
The roots for cooperation are not limited to the immediate neighbour- hood of the engineer/entrepreneur. Stakeholders such as the employees, the customers or the suppliers are highly relevant in the social panorama of cooperation. From the perspective of cooperation we want to investigate further the question that Wasserman posed: ‘When does leadership matter?’. In order to do this we look at entrepreneurship in a high-tech venture from the psychological as well as the sociological viewpoint. The research question on cooperation can be formulated as follows: is (internal and external) cooperation between stakeholders a necessary condition for success in a techno-venture? To explore this question we use the narrative analysis of the myth, supported by methods of survival assessment from psychology and sociology. To apply this to practice, we conducted a series of interviews with the two directors of Bradford.
Relevant Relationships in Cooperation
As we noted in the introduction, this study applies some complex method- ological issues. While we do not know in advance what will be relevant or important for the analysis, we approach the history and growth of Bradford as a ‘modern myth of origin’. To understand the evolution of Bradford we try to tell this story from different perspectives, in order to obtain an enriched story and to start the scientific quest from grounded theory. A myth is expressed in the group itself as a point of reference and is explained in the setting of an oral tradition: the history has to be told.
Several characteristics can be distinguished in a myth. First, a myth tells about a ‘founding hero’: a remarkable person, often with masculine char- acteristics, who introduces rules and regulations for the people who are going to support him during the growth of the techno-venture. Second, it explains how a specific group developed and what its roots were. When the social structure is called a ‘myth’ it also makes clear how everybody should
behave: habits, ways of living together and a specific morale (moral) are explained. The myth shows and transmits a particular mirror of a techni- cal and political ‘lifestyle’. Finally, a myth seems to sustain the organiza- tion in a more powerful way when the founding hero is no longer part of the community that he founded. In a techno-venture the founder is often eliminated. The myth about Bradford will be told from the viewpoint of the founders and from the viewpoint of the working community. We try to be systematic in our analysis by making use of insights from different scientific domains. This also offers the option to combine such methods rooted in sociology and psycho-analysis in a triangular way, although only in an intuitive way, which brings us to the question of what relationships are at stake here.
In order to explore this research question, we shall focus on the relations that are needed to manage a successful techno-venture. First, there is the relation between the (un)conscious motivation of the engineer/entrepre- neur and the employees, which is of a psycho-analytical nature. The devel- opment of talent, high potential and competencies of employees in general is a necessary condition for further growth. In organizations where brains are more critical than hands, where information is more important than raw material, it is necessary to attract, control and keep talent. The orient- ations of managers and employees have become different from those in the classical industrial organization. The values no longer stem from authority and obedience (Ghoshal and Bartlett, 1997). Employees need autonomy and responsibility to offer the maximum of added value. As soon as a start- up has developed a certain volume in employment, the management is con- fronted with yet another challenge: how to cope with different generations:
the first team of pioneers, the first generation of regular employees, and the youngest generation. They all bring their own expectations, modes of edu- cation and the societal values of their generation. In other words, each gen- eration brings its own perspective of time, work space and life rhythm. As the time perspective of one generation will differ from another, this might introduce a certain distortion, as viewed from the perspective of another generation, which can be a source of mental stress.
Apart from such and other intercultural differences, the question arises how to stimulate cooperation across generations and professions. Here, a second relationship comes to mind – that between the people inside the company, who act as a community: the supervisors and employees. The rapid movements in global competition leave the start-up no room for moments of rest. In each stage of development the start-up has to refocus on the changing context of its market position to increase competitiveness.
This not only requires a collective shift for the community of practice as a whole, but also sets a burden on the individual capacity to adapt to
changing circumstances. A third relation now becomes relevant: that between the working communities and the business environment. A fourth relation emerges from the interaction between the community and other parts of human society. Here, the balance between work and private life becomes relevant. Differences in national cultures can also be at stake. In sum, we distinguish between four types of relations:
1. that between the (un)conscious motivation of the engineer/entrepre- neur and the expectations of the employees;
2. that between the people inside the company, who act as a community;
3. that between the working community and the business environment; and 4. that between the working community and other parts of human society.
The first relation is of a more psycho-analytical nature, while the next three tend to be characterized by a sociological signature. The four relations are represented in Figure 2.1.
Influences from evolutions in generations and revolutionary changes in the economic context put a tremendous mental pressure on managers and employees. To explore how such changes can be ‘decoded’ we make use of two different and complementary scientific disciplines: psycho-analysis and sociology. Psycho-analysis is interested in the individual. This discipline will go beyond what looks apparent and will investigate the unconscious mind of the individual. Sociology is interested in groups, in how a team or an organization behaves and what are the underlying patterns and interac- tions. The interpretation of the behaviour of individuals and groups will
Figure 2.1 The relevant relations in the development of a start-up to a community of practice
Changing conditions in organizational environment Entrepreneur/
founder
Initial team at start-up
Community of practice Orientations of generations (of managers and employees)
open up the possibility of analysing the implicit, the tacit, and the things that are hidden in and between minds. This means that we have to deal with a hybrid methodological approach. As far as we know, this dual approach is new in the assessment of entrepreneurship survival. We shall therefore combine a new method of psycho-analysis with a sociological analysis.
This will be explained in the next subsection.
Methodological Validity
The analysis in this chapter is primarily based on narrating a myth of entrepreneurship. The first methodological issue is whether a myth by nature is suitable for further analysis. Is it not the strength of a myth that one should draw one’s own conclusions from such a story and leave the myth as it is? Here we want to develop the methodology further in order to analyse how the intuitive and rational dimensions of entrepreneurship con- tribute to success. A criterion for judging the narrative on its merit might at best be based on face validity (Miles and Huberman, 1994). To support the description of the development of a myth we use the psycho-analytical and anthropological approach. Here, other scientific criteria can be applied. The two methods should show some internal validity: do the results make sense? Are they complementary in their conclusions? Do we have an authentic portrait of what we are looking at? In further research the criterion of reliability will also become relevant: is the process of study consistent over time and across researchers? Then the issue of external validity should reveal whether the results can be transferred to other con- texts. Another criterion that is relevant is the ecological validity: is the approach relevant for companies other than the case at hand? Apart from the methodological criteria there is a more profound layer in the discussion on methodology, which concerns the awareness that more is going on than just another analysis, albeit a hybrid one. This relates to the feeling expressed already by many authors that a new shift in paradigm is in process. Peter Drucker (1993) wishes for a paradigm change: the metaphor of the army rooted in the military–agricultural complex should give place to the musical metaphor of the symphony orchestra or the ‘jazz combo’ (p.
84). He sees the re-engineering of the team cooperating like a jazz combo, because ‘organizations will work more and more with other organizations in a bewildering variety of alliances and partnerships’ (p. 87). Power, command and control should change in the direction of social respon- sibility of organizations. The modality to implement this is by seeing the organization as a learning environment. For us, the Bradford case is an exploratory study in which we try to illustrate this methodological approach for further studies.