The Covid-19 crisis completely disrupted the strategy of all organizations, reducing plans to nothing. Like any disruption, it corresponded to a process in development whose consequences unfolded, and continue to unfold, progressively on all levels: sanitary, social, economic, but also political and geo-political. It was followed two years later by another disruption, the invasion of Ukraine, which had a similar effect. For organizations, such disruptions impose a complete revision not only of their strategy, but of the way it is defined and of the fundamental beliefs on which the process is based, and in particular on how decisions are made in an organization. It requires a rethink of strategy, management and leadership.(more…)
In the quest for innovation, the encouragement of risk-taking by employees is often ineffective because of entrenched, counterproductive mental models. One example is a successful manufacturing company whose commitment to quality has morphed into a stifling perfectionism that impedes progress. While the organization advocates risk-taking for transformation, it struggles to create change. This article explores the core of this challenge-the ingrained mental models that foster resistance-and advocates a balanced approach that reconciles innovation and stability.(more…)
How does great innovation truly happen? This question often kicks off discussions on innovation, with many expecting the classic tale of a visionary entrepreneur sparking a revolution. However, this idealized notion of a sudden “big bang” innovation can be problematic, leading to either a sense of resignation or a rush into monumental projects that often yield little. In reality, even disruptive innovation typically progresses incrementally, building upon past efforts and grounded in existing conditions.(more…)
Why is an organization so difficult to transform? The issue continues to challenge the senior management of many large organizations. In large part, the difficulty comes from the fact that what makes an organization unique, that it is a social artifact (a collectively shared artificial object), is not recognized. Viewing an organization from this angle, rather than as a machine or a node of contracts, opens up an interesting avenue and provides the missing key to transformation.
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.
In 1934, a visionary General De Gaulle explained how the massive use of tanks in time of war could give a decisive advantage. The tanks were known since the First World War, but they were only used as reinforcement of the infantry. De Gaulle proposed to revise this conception completely and place it at the center of the military effort. He was not listened to except by the German general Guderian who put this idea into practice successfully a few years later … against France.
The same is true for the transformation of organizations: the importance of integrating entrepreneurs has long been recognized and organizations have made efforts in this direction, but only in order to become more entrepreneurial. It is this conception that must be revisited: entrepreneurs should not just come to reinforce the existing management, but contribute to transform it by their principles of action. Let’s see how.
GE has just dismissed its CEO, Jeffrey Immelt, who has been in office for sixteen years. Despite considerable work in transforming the business, an ambitious innovation drive, and a big push on some hot topics such as the Internet of Things and sustainable “eco” development, which together seemed to represent the ideal transformation strategy, the results have been disappointing, and the company is now in the hands of activist investors who may soon be dismantling it. If GE has done what looks on paper like the ideal transformation program, and yet fails in the end, what lessons can we draw from its story for innovation and management in times of disruption in general?
The transformation of a business is a very complex operation, but it is even more difficult when it involves a change of business model. Let’s look at why, with a simple example, that of Microsoft Office for its transition from a model of license sale to a model of selling subscriptions.
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!