Michael Lissack
maintaining their core operations—a strategic multiplicity that hedges against disruption. By recognizing each role (creating it as a separate, stand-alone com- pany) and respecting the role (allowing the subsidiary to spin out and gain its own recognition, capital, and master plan) Thermo Electron was hon- oring the many roles of the employees and business units within it. In the process, a very strong set of incentives were created for both employees and the parent company. To employees, success meant the chance to do one’s own thing with the support of but not the constraints of the parent. To the parent, as subsidiaries grew and prospered, managerial attention could be allocated to the start-ups and to the weaker siblings. The strong would both take care of themselves and contribute to the well-being of the Thermo family. Wall Street has reacted well to this strategy and so have employees: Thermo has one of the lowest turnover rates in the high-tech field. This sounds like decentralization, you say. And it is. But it is decen- tralization only of the units that are able to be decentralized. The stronger your unit is in the Thermo system, the more likely it is to be spun out. By contrast, most corporate decentralization strategies and structures begin with a philosophic statement, “we should decentralize,” and so they do, everything. But decentralization works well for some and not at all for others. That corporate America has spent a fortune hiring back its own laid-off executives and middle managers as employees of “outsourcers” is a testament to the failure of a broad-brush approach to decentralizing. Thermo Electron said no to the broad brush and instead puts in the effort to identify the right time for each unit to be spun out and with how much autonomy. The underlying concept “decentralize” may be the same, but the application and focus are very different. Holon Not Synthesis When you think of a successful computer-related company, which ones come to mind? Intel and Microsoft, the Wintel duo, are a likely choice. But in the excitement over the Internet and low-cost PCs, few seem
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