Clive Meanwell

President and CEO

The Medicines Co.

Cambridge, Massachusetts

There are times when big makes sense. Newspapers tell us that megamergers are games played in ego-filled boardrooms by a few people. This explanation is overplayed and underthought. Mergers are not inherently "bad." Whether they work or not, however, generally hinges on the ability of the two management teams to wed their strengths and weaknesses, and to survive their bigness.

What a big company's size can offer in working with fast companies is something like a "docking station" for the product, energy, and passion of the smaller company. About a decade ago, Amgen, a biotech company of a few hundred people, shopped around Neupogen, a very promising drug. A short time before, Amgen had been burned when it hooked up with a behemoth on another product. So the company's top managers were sensitive about who they were going to partner with this time. They ran an auction - the best one I've seen run by any biotech company - in which they nailed every potential buyer to the wall on one issue: commitment. They didn't want to hand over their baby to "the big guys" who would then take it out of their hands to do their magic.

I was at Hoffmann-La Roche at the time. We won the Amgen bid for one reason only: We agreed to wreck every part of our internal operating processes, take them outside, and let Amgen rebuild those processes with us for this global product. The key was that our focal point was the product, not some idea that we were bigger and better and could do as we pleased with what we had bought.

Before founding the Medicines Co., a pharmaceutical investment and development firm, Clive Meanwell (clive.meanwell@themedco.co) was senior vice president of development and operations at Hoffman-La Roche.

Will They Work for Us?

Peter Senge

Chairman

Society for Organizational Learning

Cambridge, Massachusetts

The large, centrally controlled enterprise is a thing of the past. Most of these new big mergers look, smell, and feel like the old-world style. To some degree, they're being driven by the cheap price of capital. This might make a lot of them doable, but that doesn't mean they're sensible. Sure, a group of five people can put two companies together. But can a merged organization of 100,000 people actually work?

There's an inherent problem with size. When innovative small companies start succeeding, they can get big - and risk becoming un-innovative. But not all big companies are lumbering behemoths. So the question is, How do you create really innovative, nimble, fast, big companies?

A good example of big and nimble is Shell Oil. In the early 1990s, U.S. Shell went through a huge financial crisis. But it came out the other side with a commitment to some fundamental rethinking.

In 1994, Shell established a new governance system to shake things up. The company turned its exploration and production divisions - as well as its marketing, distribution, and sales departments into separate businesses. Then it even went so far as to turn all of its internal services - legal, accounting, IT - into separate businesses. Originally, these divisions had been like wards of the state. They had never had to fend for themselves. It was a brutal restructuring process - but it's been so successful that Shell is implementing the new structure worldwide. Here's the point: A crisis made Shell realize that how it was organized as a big company was completely inconsistent with what it cared about.

But let's take a look at the other side: Imagine that bigger is better. What would that big organization look like? Shell is one of the largest corporations in the world. But even as the oil company grows and evolves, it keeps looking more and more like a nimble network.

Peter Senge (psenge@mit.edu) is chairman of the Society for Organizational Learning, a consortium of corporations working together to advance methods and knowledge for building learning organizations. Senge is also the author of the best-seller, The Fifth Discipline: The Art and Practice of the Learning Organization (Doubleday/Currency, 1990).

George Gilder

President

Gilder Technology Group Inc.

Housatonic, Massachusetts

There is a key law to size: The smaller the space, the more the room. The secret of economic growth and creativity is big companies firing people. This releases people from the sealed cells of obsolete bureaucracy and casts them onto the entrepreneurial swells of a new- world economy.

But this trend embeds a paradox: Bigger is still better for the production of most commodities. The entrepreneurial centrifuge continues - impelled by the laws of the microcosm and of the telecosm. Liberation begins with the microcosm: Smaller transistors on slivers of silicon run exponentially faster and cheaper - moving power within companies from the CEO's office to a thousand workbenches.