Meeting the challenge of disruptive change
One of the hallmarks of a great manager is the ability to identfy the right person for the right job and
to train employees to succeed at the jobs they’re given.
In trying to transform an enterprise, managers can destroy the very capabilites that sustain it. Before
rushing into the breach, managers must understand precisely what types of change the existng
organisaton is capable and incapable of handling.
Where capabilities reside
There are three factors that afect what an organizaton can and cannot do:
1. Recourses
1.1 Tangible: people, equipment, technologies and cash
1.2 Less tangible: product designs, informaton, and relatonship with suppliers, distributons
and customers.
2 Processes
2.1 The paterns of interacton, coordinaton, communicaton and decision making
3 Values
3.1 The standards by which employees set priorites that enable them to judge whether an
order is atractve or unatractve, whether a customer is more important or less
important, whether an idea for a new product is atractve or marginal, and so on
The larger and more complex a company becomes, the more important it is for senior managers to
train employees throughout the organizaton to make independent decisions about priorites that are
consistent with the strategic directon and the business model of the company.
As a company grows it gets harder for that company to enter new emerging markets.
The migration of capabilities
In the start-up stages of an organizaton most is atributable to resources. Over tme the locus of the
organizaton’s capabilites shifs towards its processes and values. As people address recurrent tasks,
processes become defned. And as the business model takes shape and it becomes clear which types
of business need to be accorded highest priority, values coalesce.
When a company’s processes and values are being formed in its early and middle years, the founder
typically has a profound impact.
As successful mature, employees gradually come to assume that the processes and priorites they’ve
used so successfully so ofen are the right way to do their work. With this culture is a powerful
management tool.
When the organizaton’s capabilites reside primarily in its people, changing capabilites to address
the new problems is relatvely simple. But when the capabilites have come to reside in processes
and values, and especially when they have become embedded in culture, change can be
extraordinarily difcult.
One of the hallmarks of a great manager is the ability to identfy the right person for the right job and
to train employees to succeed at the jobs they’re given.
In trying to transform an enterprise, managers can destroy the very capabilites that sustain it. Before
rushing into the breach, managers must understand precisely what types of change the existng
organisaton is capable and incapable of handling.
Where capabilities reside
There are three factors that afect what an organizaton can and cannot do:
1. Recourses
1.1 Tangible: people, equipment, technologies and cash
1.2 Less tangible: product designs, informaton, and relatonship with suppliers, distributons
and customers.
2 Processes
2.1 The paterns of interacton, coordinaton, communicaton and decision making
3 Values
3.1 The standards by which employees set priorites that enable them to judge whether an
order is atractve or unatractve, whether a customer is more important or less
important, whether an idea for a new product is atractve or marginal, and so on
The larger and more complex a company becomes, the more important it is for senior managers to
train employees throughout the organizaton to make independent decisions about priorites that are
consistent with the strategic directon and the business model of the company.
As a company grows it gets harder for that company to enter new emerging markets.
The migration of capabilities
In the start-up stages of an organizaton most is atributable to resources. Over tme the locus of the
organizaton’s capabilites shifs towards its processes and values. As people address recurrent tasks,
processes become defned. And as the business model takes shape and it becomes clear which types
of business need to be accorded highest priority, values coalesce.
When a company’s processes and values are being formed in its early and middle years, the founder
typically has a profound impact.
As successful mature, employees gradually come to assume that the processes and priorites they’ve
used so successfully so ofen are the right way to do their work. With this culture is a powerful
management tool.
When the organizaton’s capabilites reside primarily in its people, changing capabilites to address
the new problems is relatvely simple. But when the capabilites have come to reside in processes
and values, and especially when they have become embedded in culture, change can be
extraordinarily difcult.
