Managing by Canoeing Around

Managing by Canoeing Around

CSOM professor sees lessons in legendary Hudson's Bay Co.

By Mark Sullivan
Staff Writer

From desks in London, officers of the Hudson's Bay Co. once administered a trade empire spanning one-twelfth of the world's land mass on two communiqués a year.
The water route to Hudson Bay was frozen nine months of the year, limiting the passage of ships carrying information between the company's offices in England and its outposts in the great Canadian interior.

Asst. Prof. Michael O'Leary (CSOM) on the Hudson's Bay Co. (founded 1670): "A lot of what they did was good knowledge management. They kept good records, and asked good questions of their managers." Photo by Lee Pellegrini .
So the fur-trading firm that between 1670 and 1870 would come to hold three-quarters of the territory of what is now Canada relied on the self-reliance of field operatives who had been formed by lengthy apprenticeships in the so-called "Company of Adventurers," and who, in many cases, had been recruited from among Orkney Islanders, accustomed to hard weather off the northern tip of Scotland.

"If Shackleton is the classic example of courageous leadership, these guys provide the classic example of managing a global organization," said Asst. Prof. Michael O'Leary (CSOM), whose scholarly writing on distributed work includes an article, "Managing by Canoeing Around: Lessons from the Hudson's Bay Company."

O'Leary is a specialist in organization studies whose research interest is in the corporate use of information technology, particularly by "virtual teams," widely dispersed but linked by e-mail, instant messaging and videoconferencing.

He has looked to the Hudson's Bay Co. for an example of a company that, by contrast, managed a far-flung business empire with an absolute minimum of communications resources, in the process pioneering a number of management approaches still in use today.

An excerpt from a 1679 letter of instruction from the London home office indicates the reliance the company placed on the good judgment of its distant representatives:

We know it is impossible at this distance to give such orders as shall answer every occurrence and be strictly observed in all points, so that when we have said all, we must leave much to your prudent conduct, having always in your eye the true interest and advantage of the Company, who have chosen and trusted you in the chief command they have to bestow.

For all the inherently adventurous aspects of the trade, the Hudson's Bay Co. was characterized by a bureaucratic and conservative approach, O'Leary said. The company published some of the first annual reports, created the precursor to the employee ID number, and recorded cyclical fluctuations of game populations in a database (albeit one kept in quill pen).

"Their institutional knowledge came from people and paper and pencil," he said. "A lot of what they did was good knowledge management. They kept good records, and asked good questions of their managers."

Indeed, the Hudson's Bay Co., which today remains Canada's largest retailer, compiled the world's largest corporate archive, now administered by the Province of Manitoba.

O'Leary, who co-authored a chapter, "Distributed Work over the Centuries: Trust and Control in the Hudson's Bay Company, 1670-1826," for the book Distributed Work, edited by Pamela Hinds and Sara Kiesler (MIT Press, 2002), plans to revisit the company's extensive archives dating to the early 1700s for future projects.

He said he is interested in comparing the historic management style of the Hudson's Bay Co. to those of other organizations with widely distributed operations, such as Wells Fargo, the US Forest and Postal services, the American Bible Society, or even the Jesuits. He envisions an article, and in the long run, a book.

O'Leary said he also plans an article examining at 50-year intervals how Hudson's Bay Co. CEOs spent their days.

"There were far fewer meetings, but a lot of letter-writing," he said. "The inbox seems to have been as high, and the travel schedules were just as aggressive.

The quintessential Hudson's Bay Co. officer was Sir George Simpson, resident CEO in Canada from the 1820s to the 1860s who was the company's first modern manager, he said.

"He traveled incessantly," O'Leary said of Simpson, depicted in one company painting riding the Fraser River rapids in top hat. "His headquarters were located wherever his canoe took him. He was as mobile by canoe as today's managers are by plane."

In an age of Palm Pilots and cellphones, a case study of the Hudson's Bay Co. over the centuries illustrates, "from canoe to computer, the timeless challenges of managing across distance," the b-school scholar said.

"Working across vast distances is not a new thing," O'Leary said. "We have a lot to learn by looking backward in time at managers 200 years ago who were facing the same problems we do today.

"They didn't have the Internet, but they still managed to succeed for 333 years and counting."


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