Designing for Strategic Change v Traditional paradigms for strategic organizational change v New paradigms for understanding strategic change: Competing on the edge

Managing Change In Organizations: The Traditional View v What is organizational change? oTypes of change oProcess of change v Why is change difficult? v How is change produced? oThe process of change oThe models of change oThe actors of change v What are the strategies to sustain change?

Organizational Innovation & Change o Definition : the restructuring of organizational resources and capabilities to increase its ability to create value o Types of Organizational Change oHuman resources oFunctional resources (e.g., production technology) oNew product innovation capabilities oOrganizational & Administrative capabilities

Why is Change Difficult? Sources of Inertia and Resistance Individual Sources F Habit F Self interest F Need for security F Fear of the unknown F Selective information processing Organizational Sources F Structural inertia F Measurement systems F Career structures F Limited focus of change F Group inertia F Threat to expertise F Threat to established power relations F Threat to established resource allocations

The Process of Change: Critical stages v Initiating Change Awareness of the need for change Development of a change plan v Implementing Change Taking initial action Sustaining change

How is Change Produced? The Process of Change q Diagnose how change should be introduced u Internal consistency of practices u External consistency with organizational strategy q Identify and foster idea champions q Create the perceived need for change u Developing the data to show why it is needed u Linking the need to competitive strategy u Developing external stimulus q Establish an organizational philosophy and get top-management support q Introduce change with immediate impact q Allow experimentation q Develop plans to overcome resistance to change

How is Change Sustained? Overcoming Resistance to Change v Alignment with needs and goals of users v Communication and education v Participation and involvement v Facilitation and support v Negotiation v Manipulation and cooptation v Forcing and Coercion

Competing on the Edge: A new paradigm? v Development of a semi-coherent strategic direction emerging from a firm’s organization Unpredictable Uncontrolled Inefficient Proactive Continuous Diverse

Competing on the edge Game TheoryCore Competence Five Forces Assumptions Goal Performance Drivers Strategy Success Stable industry structure Defensible position Industry structure Pick industry & position Profit Firm as bundle of competencies Sustainable advantage Unique firm competencies Create a vision build and exploit comp. Long-term dominance Industry as dynamic oligopoly Temporary advantage Right moves Make the right competitive moves Short-term win Industry in rapid unpredictable change Continuous flow of advantages Ability to change Gain the edge, time pace, shape semicoherent strategy Continual reinvention Different Models of Strategy

The new management perspective Key performance driver is the ability to change—to adapt, anticipate, and perhaps even set the pace of change. Time—time pacing, rhythm, past and future, time metrics—not just speed, is central. Organization drives strategy—too much is happening too fast for a “strategy first” approach. Rather, organizations on the “edge of chaos” create complicated, unpredictable and adaptive behavior. Small changes can have big impact.

The Building Blocks of the New Paradigm Playing the improvisational edge Capturing cross-business Synergies Coadaptation Gaining advantages of the past Regeneration Natural selection Genetic algorithms Winning tomorrow Today Experimentation Options Learning Setting the pace Time Pacing Transition Rhythm Edge of Chaos Edge of Time Time Pacing