seppo laukkanen: patterns of business transformation
Post on 14-Jul-2015
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Patterns of business transformation
Seppo Laukkanen
Lantern OY
Blueprint model
• Traditional change management approach: Organizations change when people stop doing what they used to do and start doing something different
• Focus on persuading people to do what don’t want to do and on institutionalizing the change.
• Underlying assumptions: Top down induced change, environment sufficiently predictable to foresee desired end state.
• Blind to knowledge based view of firm and organizational learning.
• Representative cases: Transformation of Ford in 40’s, Change of Goodyear in 70’s and Xerox’s catch up with copy machines in 80’s.
• But does it really work this way ? The findings from major business transformations in the US do not really support this view.
Crisis
Plan for a change
Re-orientation
Re-make routines &
systems
Unfreeze ----- Change Re-freeze
Blueprint model
• Traditional change management approach: Organizations change when people stop doing what they used to do and start doing something different
• Focus on persuading people to do what don’t want to do and on institutionalizing the change.
• Underlying assumptions: Top down induced change, environment sufficiently predictable to foresee desired end state.
• Blind to knowledge based view of firm and organizational learning.
• Representative cases: Transformation of Ford in 40’s, Change of Goodyear in 70’s and Xerox’s catch up with copy machines in 80’s.
• But does it really work this way ? The findings from major business transformations in the US do not really support this view.
Crisis
Plan for a change
Re-orientation
Re-make routines &
systems
Unfreeze ----- Change Re-freeze
Ambidextrous approach• Structural, sequential ambidexterity and contextual ambidexterity
• Two handedness: Capability to exploit and explore.
• Create one or several separate units to explore strategic themes.
• Builds on the notions that 1) you don’t know what you don’t know and 2) exploration and exploitation call for different routines, culture and leadership.
• The inherent tension between the established, efficient and predictable versus learning creating and exploring the unknown territories.
• Without leadership interference established efficiency driven habits overrule.
• Structural separation of exploration quite common and often effective => Leads into challenges in transferring and scaling up
• Requires vision from the leadership: 1) Support innovating unit, 2) Lead transformation and transitions
• 1) HP Printers & PC:s, IBM, Shell Semi conductor industry, Nokia in the 80’s and shift of millennium; 2)Sony, Canon, NEC andNissan
CLEAR POSITIVE CORRELATION WITH THE MID TERM PERFORMANCE OF FIRM
Exploit
SustainIncremental
Radical
Renew
Transform
Transfer
Disrupt
Explore
Acquisition / Restructuring
Acquire
Integrate: Enforce
acquierer’s routinesBuild scale or presence
Soft integration: Acquired routines
survive, new capabilities, learning motive
No integration: Create new business,
minimal synergy or scale benefit
Acquisitions aiming for learning do not have to be massive in scale
Pay attention to the integration approach. Consider both formal and informal aspects.
Representative cases: ABB, Telenor, Cisco, GE in health care
From Good to Great
• Direction known, seeking for ambitious but stable position as end state
• No crisis to begin with. Rather focusing on turning an average company to great ! This an improvement approach.
• First who, then what
• Start by facing the brutal facts about the current state of affairs.
• The hedgehog concept = Simple but effective formula = Blues kaava
• Do it really well and cohesively. Implementation includes numerous incremental improvements
• Break through
• Social configuration is the key to the change
• Learning and enacting model
• Competence, capability , engagement and sense of ownership focus
• Effective modern transformation leadership model for relatively stable environments
• Representative cases: Walgreen’s, Kimberly-Clark
Face brutal facts
Hedgehog concept
Cohesive and learning
deploymentFirst who
Break through
Improvisational transformation
Crisis or awakening
Streams of ImprovisingInnovation
Dispersed learning
Routines
Innovation routines
Improvisation includes continuous iterative planning on sub-unit and aggregate levels.
Interaction is critical. Representative cases
•GE capital
•Apple’s creative re-incarnation
•Enron
•Nissan under Carlos Ghosn
Improvisational approach resonates well with the the turbulent convergence environments
Learning
Unfreezing
Key aspects in defining the transformation approach
You can define the end state You cannot define the end state
Can you buy the
competences:
If yes, consider
acquisition
If you don’t buy competences
Blue print
approach if the whole
organization needs
to be transfor
med
StructuralAmbidextr
ous approach if multiple
modes needed
From Good to Great if the
environment is stable and you seek for stable
position
Improvisational approach if the environment is unpredictable and you need
continuing revolution
Contextual and Cyclical
Ambidexterity
Applied from Osvald M. Bjelland and Robert Chapman Wood
TIVIT – DRIVING THE ICT BASED GROWTH
www.tivit.fi
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