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Organizational Design and Change

PGPM 2013-15

Building Change Capable Organizations

Section A Group 2 21 March 2014

Idea in Brief
Traditional approach Globalization, Technology, Transparency Uncertainty

Change capability

ENDURING (implicitly static) Competitive Advantage

SUSTAINABLE Competitive Advantage

Ability to read an act on signals

Close touch with market and other environmental demands Maximize the Surface area of the organization
STRUCTURES Ability to read Ability to act Increase centrality of customers Front /Back structures Fluid, decentralized, flat, bypassing slow moving Network structures decision hierarchies, Shared leadership


Sophisticated POS Systems Advanced Data Mining Technologies

Algorithms Work on Click through rate

Purchase patterns Customize stores

The Ability to Experiment

Virtual environments - to generate, test, and replicate a larger number of innovative ideas faster, at lower cost, and with less risk Broaden Scope - business models, strategies, and routines also become obsolete Tolerance for failure

Retailing + Mall development in Russia

The Ability to manage complex interconnected systems

Outsourcing, offshoring, value nets, value ecosystems, peer production Dynamic ecosystem of Codependent companies i/o transactional, distant relationship with suppliers/ customers/ competitors foster interaction with minimal barriers providing transparency and rating systems

AStephen Elop, Nokias CEO, wrote in a memo to his staff , Our competitors arent taking our market share with devices; they are taking our market share with an entire ecosystem.

The Ability to Mobilize

Decentralized, fluid, and even competing organizational structures i/o of a rigid hierarchy Replace permanent silos and functions with modular units that freely communicate and recombine according to the situation at hand cross functional teams Constructive conflict and dissent, freedom culture Selection of employees and rewards performance bonuses, successful change implementation, Skill and expertise based rewards

8 teams per store Bonuses based on store profitability for past 4 weeks

Core behavior & skills - judgment, communication, impact, curiosity, innovation, courage, passion, honesty, and selflessness

Strategic Change Center of Excellence

Consider: Who has their eye on the organizations strategic change needs? Who oversees that the level of change expertise needed is being developed and used in the best way?
Internal change consultants Quality, process improvement, LEAN and Six Sigma, IT, HR, and project management Organizing, networking, and training them for the best and highest use Consultants also provide high level change education and coaching for executives, change sponsors, and leaders Help identify the organization s past practices and patterns that inhibit its ability to succeed in change Strategic Change Officer

Assess Change fitness

The Metrics? Different from more typical methods of tracking the progress of a particular change initiative Track complex variables, such as the effectiveness of teams and workgroups: the pace of change they are experiencing, whether or not they are developing needed skills in sufficient numbers, the effectiveness of work processes and so forth Also assessing employees engagement, emotional energy levels and commitment to innovation Realistic assessments of the broader corporate culture


Book Beyond Change Management: Building Organizational Change Capability Dean Anderson, Linda Ackerman Anderson Papers/Journals Adaptability: The New Competitive Advantage, HBR July-August 2011 Designing organizations that are built to change, MIT Sloan Management Review Designing Change Capable organisations by Edward LawlerIII, California Management Review 2006 Cracking the code of Change Management, HBR AGILITY and RESILIENCE in the Face of Continuous Change, Report by American Management Association (AMA) The change-capable Organization, By Walter G. Gossage, Yaarit Silverstone and Andrew Leach

Your success in life isnt based on your ability to simply change. It is based on your ability to change faster than y our com petition, customers and business. Mark Sanborn