Haas Legends

Strategic Thinker

An early pioneer in strategic management, Professor Emeritus Raymond Miles defined human resource management styles commonly taught today

By Michael Blanding

Professor Emeritus and Former Dean Raymond Miles was one of the early contributors to the idea of human resources as a strategic function.

Raymond Miles got a crash course in business management when he was just 22. Attending the University of North Texas (UNT), he paid for his BA in journalism by working nights for the Gulf, Colorado & Santa Fe Railroad. There, he says, he learned hard lessons about how managers should best supervise their employees— and how they shouldn’t. Those musings led to a lifetime of inquiry into strategic management, making Miles, Haas professor emeritus and former dean, an early pioneer in thinking about how companies could align their strategies with the goals they were trying to accomplish.

Most of Miles’ supervisors on the railroad seemed to trust coworkers at their own level or higher, but didn’t trust their subordinates or solicit their feedback. As a result, Miles says, everything he and his fellow line workers did was harder than it needed to be. “I saw machinists with a seventh-grade education who understood management better than the foremen did,” Miles says. His desire to explore that disconnect led him to earn an MBA at UNT (after marrying, training as an Air Force pilot, and serving in the military during peace time) and then a PhD at Stanford thanks to a scholarship. Eventually he landed in Berkeley, where he embarked upon a 50-year career in research that helped to crystalize the concept of strategic management.

The Emergence of Human Resources

When Miles first arrived at Berkeley as a new professor in the Organizational Behavior and Industrial Relations group in the fall of 1963, the concept of strategic management was in its infancy. To test his anecdotal experience from the railroad, he surveyed managers in different industries. As he suspected, he found a double standard. They managed subordinates with a goal of keeping them happy and improving morale but did not regard them as strategic resources that could improve the company. At the same time, these managers desired to be treated by their own bosses in a way that would help them reach their full potential and prove valuable to the company. His insights, published in a 1965 Harvard Business Review article, “Human Relations or Human Resources?” led managers to think differently about how to utilize people in their organizations.

“Ray was one of the early contributors to the idea of human resources as a strategic function,” says James Lincoln, the Haas Mitsubishi Chair in International Business and Finance Emeritus, who worked with Miles at Berkeley’s Institute of Industrial Relations. “Instead of thinking about employees as personnel, he put forth the notion that human assets are as important as the financial and physical assets of a company and need to be managed in a strategic way. Of course everyone thinks that now, but back then, it was new.”

“Ray was one of the early contributors to the idea of human resources as a strategic function. He put forth the notion that human assets are as important as the financial and physical assets of a company and need to be managed in a strategic way. Of course everyone thinks that now, but back then, it was new.”

—James Lincoln, Haas Professor Emeritus

Not content just to criticize poor management, however, Miles in the next decade studied how organizations could improve. He found a prime example in the textbook publishing industry, which was then rapidly adapting to new computer technology to boost performance. Not all the companies were doing it in the same way, however. Some were rapidly expanding into new fields, some were more efficiently improving their specialties, and others were effectively analyzing the market to do both.

A Fluid Strategy

Out of those observations, Miles developed his breakthrough 1978 book, Organizational Strategy, Structure, and Process, written with his former student Charles Snow, PhD 72. They argued there were three distinct types of successful companies, each with its own management style: prospectors, defenders, and analyzers. (And one unsuccessful type, reactors.) Once a company figured out which class it belonged to, it could design its management structure and processes accordingly. Furthermore, the authors wrote, companies could change over time in response to their environments.

The book helped resolve a debate at the time between business theorists who felt that every company was unique and therefore needed a unique strategy and those who felt there was a one-size-fits-all prescription for success. By delineating a menu of clearly defined options, Miles and Snow helped popularize the notion of strategy classification, in which the types of strategy companies could pursue were not infinite, nor were they limited to just one.

The book has become a classic in the management strategy field and is still regularly cited. “Of the several strategy classification systems introduced over the past 25 years,” wrote Penn State Professor Donald Hambrick in 2003, “the Miles and Snow typology has been the most enduring, the most scrutinized, and the most used.”

In later research, Miles continued to explore new concepts in the field of management strategy, creating the notion of “fit” that would help companies determine the best company strategy and how to create their structure and process accordingly. “He was at the forefront of thinking on this,” says Glenn Carroll, a former Haas professor who now teaches at Stanford. “That underlying idea of having the right strategy and structure for the market environment,” he adds, “is still front and center of what every business school teaches in MBA courses on strategy and organizational design.”

Miles’ gift, Lincoln says, lay in synthesizing ideas found in the theories of organizational strategy and making them accessible to practitioners. “A lot of what Ray has done—and the field has needed—is to pull these ideas out of the academic literature and bring in case studies and real-world examples so that management practitioners and students can understand what is going on,” Lincoln says.

Miles proved the validity of his management strategies as dean of Haas between 1983 and 1990. During his tenure, he helped secure funding for and oversaw the design of the current buildings where Haas is housed today. He helped grow the Cal Business Alumni Association (now known as the Berkeley- Haas Alumni Network) into an active, thriving community. And he doubled the number of endowed chairs at the school to 24, recruiting such luminaries as Nobel Laureate Oliver Williamson.

In later research, Miles and Snow expanded their notion of organizational strategy to look at network organizations and the design and management of global supply chains. In the last decade, he has turned his lens on innovation. His 2005 book, Collaborative Entrepreneurship, written with Snow and Grant Miles (his eldest son), examined how companies could form networks with other firms to create innovative products and services. In 2009, the authors expanded on the idea, identifying a management structure they called the innovation form or I-form, consisting of a networked community of firms, specifically suited to innovation in changing markets.

With more than five decades of research and management experience behind him, Miles, now 84, has come a long way since his accidental night school education on the railroad. In his ability to extrapolate larger lessons from the academic realm and real- world companies alike, Miles is the rare thinker who can operate on the levels of both theory and practice. And Berkeley-Haas is all the better for it.

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