Disruptive innovation, entrepreneurship and organizational transformation
Disruptive innovation, entrepreneurship and organizational transformation
Disruptive innovation, entrepreneurship and organizational transformation
How can organizations overcome deep-seated resistance to change and transform successfully? The answer lies in understanding the profound impact of mental models – the lenses through which we perceive the world and ourselves. This phenomenon is vividly illustrated by the mysterious disappearance of the Norwegian colony in Greenland.
(more…)What do the failures of Kodak or Nokia, the disengagement of employees in large organizations and the success of entrepreneurship have in common? Much more than one might think. In all three cases, it is a question of adherence to reality, and the future of management has a lot to do with this question.
Why do organizations find it difficult to change when facing a disruption? The question is not new but it continues to puzzle researchers and managers alike. Part of the answer lies in the observation that over time, what an organization knows migrates: its capability initially lies in its resources (especially human), then it evolves to processes and finally to values. It is at this last stage that change is the most difficult.
Everything is going faster! Change is accelerating! At least that’s what we hear all the time. What if this platitude reflected a misunderstanding of the nature of disruptions and how they develop? And what if, therefore, it led to the wrong answers by incumbents and startups? Let’s analyze the nature of disruptions and our relationship to time.
It is a story repeated many times: “Our transformation strategy is perfectly clear. But we have a big execution problem” as the member of the executive committee of a large multinational was telling me a few weeks ago. He added: “Now, disruptions are coming from everywhere, we spend millions on transformation plans, we put ‘digital’ and ‘startup’ everywhere, and nothing – nothing! – happens.” Implicitly, of course, and soon very explicitly, the explanation fuses: it is down below that people are incapable! Managers ‘down below’ are not ‘aligned’, so goes the explanation. They do not know how to execute. Or worse: they are resisting change. We must identify the culprits, the traitors! The plan must be executed!
We live in an age which idealizes managers, yet never have these managers felt so powerless. Whatever their level in the hierarchy, they are confronted with increasing pressure in terms of control, reporting, senseless procedures, all resulting in a loss of autonomy which is immensely frustrating. As one of them was telling me recently “I have a superb company car, a personal assistant, a huge office in a very nice location in a great city, I am paid handsomely, feeling like Zeus on the tope of the Olympus, and yet when I want to buy a copier I need to ask the head office, and it’s not getting better. I am losing autonomy as time passes. All I’m doing more and more is filling Excel sheets.”
Memo to the CEO:
You tell me that you want your business to be more innovative. That it is necessary to free the energies of your collaborators, to transform your organization into an enterprise 2.0 or 3.0, to adopt a startup spirit, and what not. You seem to be enjoying the stories of Google, 3M, Apple of course, just like you liked to hear childhood’s tales. Again and again. Fascinating and moving. You say innovation is a strategic pillar. It is in the foreword of your annual report, illustrated with nice pictures with children. For children are the future. You organize creativity seminars, you set up ideas boxes, you also set up an innovation cell, hosted in a loft with designer furniture, and of course you open a Lab. You assure me that innovation is a priority. At least that’s what your managers are telling me. But this is not true.
One of the important factors of organization decline is the type of managers it recruits and promotes. Among them is what I call the ‘Creosote manager’, the one who kills life all around him to flourish. Creosote people populate just about every organization that I encounter and that have so much trouble innovating. Would there not then be a causal link?
(more…)What explains the decline of once successful, even highly innovative companies such as Kodak, Nokia and so many others? The question is still relevant, and to find an answer we can be inspired by the work of historian Arnold Toynbee, who attributes the declines to an erosion of creative capacity. How does that happen?
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