Cracking the code of change

Ron Josef Y. Magarzo

Cracking the code of change is an article written by Michael Beer and Nitin
Nohria. The authors begin with the notion that change within a company is
unavoidable and that they may either change or die. The authors also point out
that change is difficult to pull off and that their change initiatives have a brutal
failure percentage of 70%. According to the authors, the reason behind these
failures is the tendency to lose focus and become mesmerized by all the advice
available about why companies should change. The authors then introduce two
theories which will guide as through the process of cracking the code of change.
These theories are Theory O and Theory E. Theory E is the change based on
economic value while Theory O is based on organizational capability.Theory E is
the hard approach to change which involves heavy usage of economic
incentives while Theory O is the soft approach to change which involves
developing corporate culture and human capability. Both theories differ in goals,
leadership, focus, process, reward system, and use of consultants.
After reading the article, I learned two things. One, change within a
company is inevitable and we must address this change if we don’t want our
company to suffer in terms of productivity and effectiveness. Two, there are
two theories that can be used to address the change and these are Theory O
and Theory E. If I were to choose which theory should be used in addressing
change within a company, I would say both are important. Both theories are
important in addressing change within a company and it depends on the person
which theory he or she will incorporate in his or her company. Theory E has its
own advantages and disadvantages as well as with Theory O. If you want to
create economic shareholder value and have a formal structure and system,
then Theory E will be more suitable for you. If you want to improve the people
and the organization, then Theory O will be more suitable for you. After reading
the article, I feel more educated and that my body of knowledge has further
widen. Out of all the reflections I’ve written and out of all the articles I’ve read,
Cracking the code of Change by Michael Beer and Nitin Nohria is by far my most
favorite.