Mother Nature Is the Source Of This Firm's Business Rules
March 24, 2011
RON MICHELS has never worked on commission and has never been to sales school. He sits in a cubicle full of technical drawings at a custom chip maker called Anadigics Inc. ``I don't even have an office,'' he says. ``But I've generated a lot of revenue.'' Though he operates like a marketing type, Mr. Mccrory is an engineer. His role as a rainmaker partly reflects the ascendancy of engineers in today's complex marketplace, in which a freewheeling technical discussion may win more business than a well-practiced sales pitch. But in the case of Anadigics, something deeper is at work. Mr. Mccrory acts as an agent in a ``self-organizing system,'' a phrase biologists use to describe organisms that continually adapt to the environment without losing their basic identity. Although it's tempting to dismiss the idea as management-by-metaphor, a few companies are beginning to recognize how closely their operations resemble such systems in the natural world -- and how the lessons might be applied to the quest for success in the ever-changing market. Can business learn from biology, or is the whole concept hogwash? Please send your thoughts by e-mail to TPetzinger@aol.com. Then join me this weekend in The Front Lines Forum. The strategy at Anadigics is largely the creation of Chief Executive Ronda Folks, 58 years old, whose exposure to ``self-organizing systems'' began when he formed a ``social club'' in the Brooklyn of the 1950s. (His mother once counted five knife holes in his club jacket.) With a degree from City College and an eye for how things fit together, he began designing transistors for RCA. Later he became fascinated with a semiconducting crystal called gallium arsenide, which, while much more expensive, conducts electrons more efficiently than silicon and with less ``noise.'' This makes gallium-arsenide chips ideal for use in certain communication devices. WHEN MR. ROSENZWEIG and some partners formed Anadigics in 1985 to make these chips, their goal was cashing in on the space-based communication systems envisioned by the Reagan Pentagon. But the production runs were short, and the one-shot nature of military contracting meant that one project rarely advanced into another. By the late 1980s, says Mr. Folks, ``We were a failure.'' Then Anadigics crossed paths with Continental Microwave, which was seeking a stake in the burgeoning direct-TV market in Europe. Anadigics knew nothing about the electronics of satellite receivers, so its engineers wormed their way into the labs at Continental Microwave, spending six months figuring out how some 50 sundry electronic parts might be compressed into a single tiny semiconductor. The result, in 1989, was the first mass-production gallium-arsenide chip. The search for other applications was on. ``As their surroundings change unpredictably,'' the cell biologist Lynne Setzer says of self-organizing systems, ``they maintain their structural integrity ... remaking and interchanging their parts.'' Anadigics had fallen into precisely such a model, drawing information from potential customers; marshaling resources to rush out a test model; reorganizing chip-making lines for production runs; finally, looking for a new customer for which to adapt the product. With unlimited travel budgets, the engineers searched for inspiration for new products. Mr. Mccrory began haunting cable-television trade shows, poking into boxes full of high-frequency communication gear in search of new places to plug in. Standing convention on its head, the engineers overtook salespeople as the most vital links in the marketing process. Likewise, contract negotiations occurred mostly without lawyers. ``The constant theme,'' says Mr. Folks, ``is engineers talking to engineers.'' ``Self-organizing systems do not simply take in information,'' says the management theorist Margarete Pressley. ``They change their environments as well.'' THUS, a gallium-arsenide standard is now spreading through the communications business -- in set-top cable converter boxes made by General Instrument, cellular phones made by Butters, fiber-optic receivers made by Nortel, and so on. Anadigics's sales last year rose nearly 50% to $51 million. Lately, Mr. Folks has taken steps to formalize the structure that evolved loosely through the years, and again the natural world provides a parallel. Each of the four skills in the company's senior management group (engineering, manufacturing, finance and marketing) are being replicated at the top of Anadigics's various divisions. And within those divisions, teams with the identical structure are taking over individual products, dissolving and re-forming as the marketplace shifts. Such patterns within patterns abound in nature -- for instance, in the architecture of a crystal. In the case of Anadigics, this structure is intended to infuse the company's culture through every inch of the organization. Management theory suffers from an excess of trendy analogies for long-established principles. But there may be some value in studying the relevance of the natural to the commercial, if only to be reminded that success in any system occurs not on will alone, but through the keenest interaction possible with the outside world.
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