session 2 change & performance

Change – troublesome or opportunity?

All changes great and small:

Change and PerformanceFranziska Becker

FORCES OF CHANGE TODAY.WHERE FACED.

1. Knowledge Economy - educating & learning tomorrow ?

2. Virtual organizations - rise of SME sector ?

3. Merger & Acquisition - rise of corporates?

4. E- commerce – changing retail and services?

5. Digital convergence

6. Privatizations - price fluctuations ?

...changing the way we do business tomorrow

"in times likes these, change seems to be

the only constant we

got!" - Isaac Asimov -

"in times likes these, change seems to be

the only constant we

got!" - Isaac Asimov -

Does change enhances the organization's survival chances? (i.e. is change adaptive ?)

Does this depend on the type of change and if so: HOW?

The two sides of change - Strategic Agenda for today

Technical side Human side

1.Organizational Inertia and Momentum

2. Organizational

identities and the hazard of change

3.Organizational Transformation

Why may organizational change threaten the organization's survival? What are your experiences?

Your top 3. My top 3.

Uncertainty

Systematic Before mindset

Lack of communication

Big changes demands adaptivity

Before we dig into the articles…What is

organizational ecology?

Base of articles

The macro perspective on

change

Organizational Inertia &

Momentum

A Dynamic Model of Strategic Change

Kelly & Amburgey, 1991

What is (structural) inertia?

The hindrance of

change

Organizational change/ conscious

innovation

Definition

In consultancy: what would be your first step when facing a change attempt in the core features?Airline Deregulation Act 1978/ airline industry - how strong is the influence of single variables?

Inertia put into context – Case/ Group Discussion

Case Kodak – When change changes too fast

Core Values

1. Stated goals2. Forms of authority3. Core technology4. Marketing strategy

please consider those when working on the

Kodak case

Time for some quick environmental

change!Let s get some coffee!

Organizational identities and the hazard of change

Institutional and Corporate Change

Hannan et al., 2006

What is a non- technical account?

•Identity- based resistance to change in employment relations disrupts organizations and degrades performance (p. 757) (--> study focus/ objective)

•What are organizational identities then?

What are organizational identities?

•Identity refers to characteristics and behavior whose absence exposes organizations to negative evaluations and concequences.

Hypotheses. Results.

Our Discussion.

Hazard of failureHazard of IPOGrowth rate in market cap.Outsider executive

Changes in blueprints.

H1: changes in blueprints

(a)increase the hazard of failure

(b)Lower the hazard of IPO

(c)Depress the rate of growth in market

capitalization H2:

Appointment of an outsider as a chief

executive destabilizes organizations less than

changes in blueprints for employment relations

Overall:Origins matter

Core feature change implies an alternation of premises, values, and routines having been internalize by

employees

++

++--++

Main results/findings

1. Hazard of failure:p. 769

2. Hazard of IPO:p. 773

3. Depress growth rates of Market capitalization:p. 774

4. Change of CEO:

“(…) evidence that changing the organizational blueprint diminishes chances of early success.

Specifically, change increased the odds of failure and reduced growth in market capitalization”

According the the article:

Changes in the organizations core is dangerous because

• Reliability & accountability fall

• Raise questions about nature of the organization

• Missing opportunities during reorganization

• Degrades performance

• Destabilizes the organization

• Decreases creativity

• Increase the hazard of failure

Core feature change put into context – Case/ Group Discussion

Case: Fiat – Successfully Fighting Inertia

What does this case show us concerning ‘core feature change’?

What would be a vital change management approach?

TOWARDS A VITAL CHANGE MANAGEMENT APPROACH – HOW DID FIAT DO IT?

1. Can Do- Mentality2. New CEO3. Focus on patenting4. Talented young team

Bottom- up or top- down?

Member involvement?

Bottom- up or top- down?

Member involvement?

Legal and regulatory context

of ownership

Legal and regulatory context

of ownership

Membership- based organizations

Membership- based organizations

Bigger picture:Organizational transformation and its influencers

Communication and

other sense-making efforts

Processes

‘Meeting the challenge of disruptive change’ (Christensen & Overdorf, 2000)

Time

Start-up phase: mostly people

(CEO Blueprint)

Hard-to- change

interaction, communication, coordination etc.

to transform resources into

products of greater worth(Core features

evolving)

Standards by which employees

set prios

Resources Values Culture

Additional

insights

Core lessons learned ? – Final thought

How and what does it take for us to create an environment of reliability and accountability [inertia characteristics] in volatile [fast -CHANGing] times?

What would be a good approach to make change an opportunity rather than a threat?

Does change enhances the organization's survival chances?

Does this depend on the type of change and if so: HOW?It is not the question whether change is adaptive or enhances the survival chances.

Change is a given factor we will always face and need to work with when wanting to

maintain within the market.

Change thus much more implies opportunities to take the company into the next level and yes then IT DOES ENHANCE

SURVIVAL CHANCES

It is not the question whether change is adaptive or enhances the survival chances.

Change is a given factor we will always face and need to work with when wanting to

maintain within the market.

Change thus much more implies opportunities to take the company into the next level and yes then IT DOES ENHANCE

SURVIVAL CHANCES

How do we do this? Here an example:

…for contributing! Enjoy your night!