An Organisation Needs To Periodically Shake Itself Up

An organisation needs to periodically shake itself up, regardless of the competitive landscape. Some signs that indicate a shake-up is required include

- formal and informal structures are similar

- 'silo' formations dominate

- strategies, routines, processes, systems et al become barriers

- communications and collaboration across units is minimal

- innovativeness has declined

- persistent failure to spot new developments and opportunities

- resources are concentrated in a few powerful groups

- groups doing critical work are under-resourced, etc

Some suggested ways to change before you have to change revolve around structure, recognition and processes.

- structure (how is your business organised? ie by function, geography, customer type, product, etc)

- recognition (what is emphasized in performance reviews and compensation? ie incentives for individuals/teams/organisations are transparent; open vs confidential appraisals; short-term performance vs. long-term development; revenue vs. value-added; sales vs. profit, etc

- processes (how do you carry out your work? ie decision rights (who decides what, reporting lines, etc); distribution (centralized or decentralized); location (which processes sit next to each other); focus (customer or product)

organisational development change management

Organisations which are aware of the need to be ahead of the next wave of innovation ask themselves, - What will give rise to the new areas of innovation" For a wave of innovation to happen, there is a significant array of relatively new and emerging technologies and a recognised genuine need in the market that is leading to a market expansion.

"...The first industrial revolution began with the steam engine and new machines increased the labour productivity of cotton-spinning and production of steel. This was followed by further industrial shifts with the engineering that evolved out of advances in the understanding of, for instance, electro-magnetism. This was followed by a focus on mass production of the automobile and electrification of cities, which lasted until the 1940s. The rise of semiconductors and electronics provided some of the enabling technologies and helped create new business opportunities throughout the 1950s and 1960s. In the case of the information and communications technology (ICT) wave of innovation, it is easy to identify the technologies that were driving the growth of capacity in the industry. Innovations in computer processing power, network bandwidth and data storage......this last wave of industrial activity was largely based on semiconductors, fibre optics, networks and software......if the last wave of innovation, ICT, was driven by market needs such as reducing transaction costs, we believe that there is significant evidence that the next wave of innovation will be driven by the twin needs simultaneously to improve productivity whilst lightening our environmental load on the planet..."

Karlson Hargroves, 2005

The world is littered with examples of firms that lose their edge and grow into giant bureaucracies/silos that stifle innovation, etc, and there is internal warfare between different silos, eg Sony, Sun and Xerox. Even Microsoft has battled with this. Firms and departments/divisions/units, etc that have become successful, usually with the development of one product, have a very powerful incentive to defend it and their power base, even if technology is changing around them.


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