Seppo Laukkanen: Patterns of business transformation

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TIVIT Results and Business Forum 12 April 2011 Seppo Laukkanen, Lantern Oy

Transcript of Seppo Laukkanen: Patterns of business transformation

  • 1. Patterns of business transformationSeppo Laukkanen Lantern OY

2. Blueprint model Traditional change management approach: Organizations change when peoplestop doing what they used to do and start doing something different Focus on persuading people to do what dont want to do and on institutionalizingthe change. Underlying assumptions: Top down induced change, environment sufficientlypredictable to foresee desired end state. Blind to knowledge based view of firm and organizational learning. Representative cases: Transformation of Ford in 40s, Change of Goodyear in 70sand Xeroxs catch up with copy machines in 80s. But does it really work this way ? The findings from major businesstransformations in the US do not really support this view. Re-makePlan for aRe-routines & change orientationCrisis systems Unfreeze ----- ChangeRe-freeze 3. Blueprint model Traditional change management approach: Organizations change when peoplestop doing what they used to do and start doing something different Focus on persuading people to do what dont want to do and on institutionalizingthe change. Underlying assumptions: Top down induced change, environment sufficientlypredictable to foresee desired end state. Blind to knowledge based view of firm and organizational learning. Representative cases: Transformation of Ford in 40s, Change of Goodyear in 70sand Xeroxs catch up with copy machines in 80s. But does it really work this way ? The findings from major businesstransformations in the US do not really support this view. Re-makePlan for aRe-routines & change orientationCrisis systems Unfreeze ----- ChangeRe-freeze 4. Ambidextrous approach Structural, sequential ambidexterity and contextual ambidexterity Two handedness: Capability to exploit and explore. Create one or several separate units to explore strategic themes. Builds on the notions that 1) you dont know what you dont know and 2) exploration and exploitation call for differentroutines, culture and leadership. The inherent tension between the established, efficient and predictable versus learning creating and exploring the unknownterritories. Without leadership interference established efficiency driven habits overrule. Structural separation of exploration quite common and often effective => Leads into challenges in transferring and scalingup Requires vision from the leadership: 1) Support innovating unit, 2) Lead transformation and transitions 1) HP Printers & PC:s, IBM, Shell Semi conductor industry, Nokia in the 80s and shift of millennium; 2)Sony, Canon, NEC andNissanCLEAR POSITIVE CORRELATION WITH THE MID TERM PERFORMANCE OF FIRM TransferRen ew ExploitRadicalTransformExploreIncrem Disrupt Sustain ental 5. Acquisition / RestructuringIntegrate: Enforce acquierers routinesBuild scale or presence Soft integration:Acquire Acquired routines survive, new capabilities,learning motiveNo integration:Create new business, minimal synergy or scale benefitAcquisitions aiming for learning do not have to be massive in scalePay attention to the integration approach. Consider both formal and informal aspects.Representative cases: ABB, Telenor, Cisco, GE in health care 6. From Good to Great Direction known, seeking for ambitious but stable position as end state No crisis to begin with. Rather focusing on turning an average company to great ! This an improvementapproach. First who, then what Start by facing the brutal facts about the current state of affairs. The hedgehog concept = Simple but effective formula = Blues kaava Do it really well and cohesively. Implementation includes numerous incremental improvements Break through Social configuration is the key to the change Learning and enacting model Competence, capability , engagement and sense of ownership focus Effective modern transformation leadership model for relatively stable environments Representative cases: Walgreens, Kimberly-Clark Cohesive and Face brutalHedgehogBreak First who learningfactsconcept deploymentthrough 7. Improvisational transformation Streams of Routines Crisis orImprovising LearningawakeningInnovation Dispersed learningInnovation routinesUnfreezingImprovisation includes continuous iterative planning on sub-unit and aggregate levels.Interaction is critical. Representative casesGE capitalApples creative re-incarnationEnronNissan under Carlos GhosnImprovisational approach resonates well with the the turbulent convergence environments 8. Key aspects in defining the transformation approachYou can define the end state You cannot define the end stateIf you dont buycompetences Improvisationalapproach if theCan youBlueenvironment isbuy the From Good to print unpredictable competenStructural Great if theapproach and you needces: Ambidextrenvironment is if the continuing ousstable and youwhole revolutionIf yes, approachseek for stableorganizati considerif multiple positionon needsContextual andacquisition modes to be Cyclical needed transfor AmbidexteritymedApplied from Osvald M. Bjelland and Robert Chapman Wood 9. TIVIT DRIVING THE ICT BASED GROWTHwww.tivit.fi