Times of Innovation and Change

All the organizations in an industry do have good managers and human resources but even then when there is a need for drastic change organizations fail to realize it and the success period of their life ends while the path to failure begins. At times when huge organizational changes are required due to external environment, the financial resources are not enough to cope up with the changes.

The external environmental factors make managers and leaders to act in a certain way, where they have to constantly develop a fit between all the soft and hard organizational resources for the incremental change and success of the organization. At the same time they must be ready to disturb that fit by them when there is a need of discontinuous change. This is the point where firms move towards failure. They are good for creating the ft but when it’s time to destroy that fit by them it becomes difficult for the organizations to do so.

Technological changes are both incremental and discontinuous and the organizations usually are able to gain incremental success for the organization with incremental technological changes while they face difficulty when combating with discontinuous changes. It is difficult for the organizations when they are facing discontinues technological changes because it not only sometimes requires them to leave the old technologies which are direct opponent to new technology but also requires them to make changes in the organizational structure and culture which is the hard part. The reason is that organizations have already invested in the old so much in terms of developing culture and organizational fit that at that time it seems difficult to part away from the old norms.

Organizational success depends upon the Size, Culture and organizational staff. All organizations are very flexible when they are small and growing. They feel the taste of success through evolutionary process where they are able to cope up with the incremental changes in the environment due to their size, culture and procedures. Since the competitive landscape remains the same during these incremental changes period hence the organizations have not worry about their competitive advantages and hence can reap the benefits. However as the organizations grow their own size becomes huge and due to which it leads to structural changes where formal procedures and hierarchies are introduced in the organization and that slows down the process of coping up with the change. This is the time when the managers have to look for the alignment of strategy for the changed internal factors and if done successfully, it leads to incremental growth for the organization. This is the S-Curve effect which comes in every organization’s life cycle.

Culture also plays both a positive and negative role in the organizational evolutionary and revolutionary growth process. Culture plays big roles in terms of age and success of the organization. As the organization grows in size there is a harmony which develops among the employees and these are unwritten rules and procedures understood by everyone the organization. They help in the short term success caused by evolutionary changes. However during the time of revolutionary change, these factors play a negative role sometimes. These are the times when organizations are unable to shift its focus while the market is shifting its focus.

The solution lies in think big act small. These are called the ambidextrous organizations, where they reap both the advantages of being overall big but being small at the same time. These organizations are able to focus on both the incremental and discontinuous innovations and changes and overcome the dilemmas related to size and culture. The organizations like HP develop independent departments which retain their own culture and size is not too big as well. To reap the benefits of bigger size the activities like marketing are centralized in such organizations while they work independently when it comes to operations. In order to remain small such organizations also form autonomous groups and hence are able to overcome the difficulties when it comes to coping with changes. It happens because the change may be related to one department or group and if it is autonomous it would be able to incorporate the changes without disturbing the other groups or departments of the organization.

These organizations work on the basis of two cultures. One is corporate culture, which is common among all the groups and is told by the headquarters while the other is the culture of the autonomous group which holds it together. The later comes under the former. Later can be changed by the group as required and hence they are able to change as demanded by the both evolutionary and revolutionary innovations and changes.

Ref:Ambidextrous organizations: Managing evolutionary and revolutionary change Tushman, Michael L; O Reilly, Charles A III California Management Review; Summer 1996; 38, 4; ABI/INFORM Global pg. 8

Manage Successful Change in the Long Run

The importance of enabling change-processes over time has been documented by Huy & Mintzberg (2003). Latham described how management in several steps could promote behavioral change within an organization (2003). He emphasized the importance of goalsetting. Some organizations use goalsetting as a way of driving a dramatic change lead by top management. However the article is focused on the leadership-perpective with the downside of not including long-term strategic and tsructural perspctives. Lathams findings can hardly be described as sufficent for effectice long-lasting change and an equlibrium of dynamic stability as advocated by Huy & Mintzberg (2003).

How can we achieve the goal of organic growth/change in any organization? Brown & Eisenhardt (1997) suggest that semi structured organizations (Where border areas of responsibility/goals are defined but how to achieve those is up to the person responsible) are the key for continuous and organic change. The structure has not to be very rigid or very lenient. It should be a flexible structure for organizing change. It is also important to create “Links in time” (Past, present and future (activities in external environment)) for the organization in order to have continuous change process. I believe that in order to have successful quantum leaps, the dramatic change is the key but it should be triggered by the organic and systematic change. A way of succeeding with such a task is to apply the findings from Burgelman & Grove(1983).

Now what do I mean by the lenient structure? I am not proposing a single structure for any organization because I believe that “same size never fits all”; however the lienent structure means that organizations hae to work on developing such a structre where there is not a lot of hierarchy involved and the open communication is easily possible. This can be done by designing the office space in such a way that where employees work in a large room and can communicate easily. Also in terms of responsibility, the responsibilities should be defined clearly through job descriptions, and the widely applicable rules and policies of the organization should be efined. Then it should left on the employees that how they achieve the goals defined in teir responsibilites. This will lead to an enviorment where employees will be able to point out the errors in the system and hence the process of organic change will start. This will trigger the process of proactive change in the organization which will have te concent of the employees at all levels and hence it will be eas for te organization to stear itself in a new direction. The employees will be supporting the new process instead of opposing it and hence the long term change process will be sustainable.

BUT, you should be aware of the external environment at te same time. When you creat links in time, it gives you a clear picture that what was the time frame in which the process of discontineous innovation was triggered. So if u are anticipating such an innovation then may be it’s the time to go for the dramatic change in order to remain competitive in the industry. However, apart from the technological and computer industries, usually the time period between discontinuous innovations is huge and hence the organization has to focus more on the organic and systematic change I order to trigger the dramatic change process.

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Burgelman, R. A.” Corporate Entrepreneurship and Strategic Management: Insights from a Process Study. Management Science”. Dec 1983, Vol 29, No 12. pp. 1349-1364

Brown, S...L & Eisenhardt, K.M (1997) “The Art of Continuous Change: Linking Complexity Theory and Time-Paced Evolution in Relentlessly Shifting Organizations”. Administrative Science Quarterly; Vol. 42, pp 1-34.

Latham, G.P. (2003) “Goal Setting: A five step approach to behaviour change; Organizational Dynamics”. Vol 32, No. 3, pp 309-318

Mcallaster, C.M. (2004) “The 5 P’s of Change: Leading Change by Effectively Utilizing Leverage Points within an Organization”. Organizational Dynamics, Vol 33, No. 3, pp 318-328

Nguyen Huy, Q & Mintzberg, H. (2003) “The Rhythm of Change”, MIT Sloan Management Review. Vol 44, No. 4, pp 79-84

Burgelman, R. A. & Grove. A. S. (2007) let chaos reign, then rein in chaos—repeatedly: managing strategic dynamics for corporate longevity, Strategic Management Journal, pp 965–979