What are 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.

Four Dimensions of Management

 

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:

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:

Birkinshaw's 4 Dimensions examples

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:

Elon Musk - Birkinshaw's 4 Dimensions example

 

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

Steve Jobs - Birkinshaw's 4 Dimensions example

 

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

Warren Buffet - Birkinshaw's 4 Dimensions example

 

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

Bill Gates - Birkinshaw's 4 Dimensions example

 

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

Summarizing

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.

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