This article focuses on six types
of obstacles faced by corporations and how to overcome them during corporate transformation. According to the author, transformations
should be bold and rapid. Even one brake can stop the progress of transformation.
Per the author brakes that slow down renewal processes are; cautious management
culture, business as usual management process, initiative gridlock, recalcitrant
executives, disengaged employees and loss of focus during execution.
Cautious management culture:
Most executives try to reduce risk by implementing incremental change in
strategy. Established business units try
to trump new ideas introduced by new business units in a corporation. As parent corporations allocate most of their
funds to established business units, new business units have to work with
constrained resources. This makes it difficult for new business units to succeed. This culture can be overcome by:
- Targeting big ideas in order to get big results
- Providing continuous positive reinforcement of
ideas
- Creating a leadership team to implement new
ideas
- Encouraging team members to talk honestly about
the corporations weaknesses
For example, prior to year 2000 Apple
Inc. mostly focused on increasing its market share by developing its existing
product line and business units. New product development was almost
nonexistent. This brake was released in
2000’s when the company’s CEO changed. They targeted big ideas by creating new business
units that introduced products such as IPod, IPhone and I pad to the market.
Business as usual management
process: Most executive’s feel that they don’t have time for change, as
they are busy with day to day operations. To change their mindset corporations
need to run “The no- slack launch”
strategy, where new strategy is planned and implemented on a parallel track
with existing systems.
For example, Apple Inc. continued
the development of existing business units (their line of laptops, desktops and
PC operating systems) along with the development of new business units for products
such as IPod, IPhone and I pad.
Initiative gridlock:
Initiative gridlock occurs when corporations try to implement all initiatives
at the same time. To release this block, corporations should strictly limit changes
to less than three to four initiatives. Implementing more initiatives at the
same time increases workload and consumption of resources.
For example, Apple CEO Steve Jobs
always prioritized projects. He and his team envisioned all the new products.
However he prevented gridlock by developing new business units that produced and
introduced new products to the market one at a time.
Recalcitrant executives: Corporations
have some recalcitrant executives who can create problems while launching
change. Author has divided these executives into three types; which are quick
adopters, deniers, and commitment averse. Dealing with these executives early
on will increase the momentum of transformation.
Disengaged employees: Disengagement of employees in the organization
will slow down the transformation process. Engaging the employees in the new
transformation process and conducting essential training programs on change
management can release this type of a brake.
Loss of focus during execution:
Enthusiasm of transformation can
decrease with time. After few months executives might try to go back to their
old and familiar methods. To release this brake; keep employees and executives
focused by conducting weekly staff meetings, change management seminars and
training workshops.
Reference: Miles, R. H. (2010).
Accelerating Corporate Transformations (Don't Lose Your Nerve!). Harvard
Business Review, 88(1/2), 68-75.
Thus far in my studies of strategic management, I have read many theories as well as techniques that allow companies to be successful with their strategies. This was a great article because it shows how to make a transformation quickly. I feel that if you are going to change strategies, reorganize, or transform that your company is better served if it is done quickly. This article does a good job of outlining the possible characteristics that could prevent a quick transformation. To me, the most important characteristics to watch out for are cautious management culture and loss of focus during execution. Cautious management culture is important because this characteristic can keep a transformation from even getting started. Loss of focus during execution can derail the whole transformation.
ReplyDeleteYes, indeed cautious management culture is the first hurdle management has to overcome if they want to implement new strategies in their organization. The article explains six hurdles in a sequential order as they arise. Every hurdle is important to overcome as they are linked. Therefore only concentrating on cautious management and loss of focus during execution can stop the transformation process.
DeleteAuthors have given potpourri of basics that any executive should keep in mind while considering the organizational transformation. Knowing all stakeholders, transparency in communication, clearly defined scope and goals are very essential for any project to succeed. Reading this article gives the 101s of Project Management which can be directly applied to the transformational tasks undertaken by executives. Goes back to our discussion in class, major overhauls of the organization can be done effectively with number of small projects, if done right.
ReplyDeleteYes, I believe that a mix of these six types of obstacles faced by corporations can be applied to all the transformation tasks. If the project managers \ management communicate with their employees and train them to overcome these obstacles and keep them focused then organization overhauls can become less painful to implement.
DeleteThis article gives a great sense of how a corporate transformation should be achieved. I believe that sometimes a new strategy or an overhaul can be seen by management as a daunting task. While it is a daunting task, it must managed as the article states "business as usual management". This brings a great point because at times, corporations can overfocus on the new strategy that they may overlook the units that are currently working for them. Also I agree with the way it talks about executives who at times can be resistent to change. In my opinion it is important that from the beginning of the project, all management should get together and voice their personal opinions, so that they can all be on the same page from the beginning. Great read and it really hints on key points on transformation.
ReplyDeleteChanges are not easy for any organization. Especially, Tone on the top is one important factor. So I agree with the cautious management culture is the brake to slow down renewal process. Revolution needs time, particular plan and bold courage in a timely manner. Initiatives should be implemented within the organization. Executives will take the lead in this process, but really need everlasting enthusiasm. Good management never lost the strategy of cooperation and coordination. All employees and management are not separated in the new transformation process. No great corporations succeed casually. Apple Inc. is a good example.
ReplyDelete