Corporate Case Study

Corporate Case

Corporate Case - As a manager, you will always be challenged to improve performances, whether business results are good or not.

How are you planning to face this challenge with your organization (or department)? On a personal level, you probably have a serious talent for improvement: how else have you accomplished the leadership position you are in? Success is not something you were born with, it is the result of your personal capacity to learn.

We are positive you are ready for your next success, but is your organization ready? And how would you know?

Nowadays, companies are operating in a highly transparent environment due to globalization, internet and (social) media. Businesses cannot neglect to translate the ever changing environment into their strategies and internal organization.

Continuous change is the new world order. Organizations which master to adapt continuously are today’s winners.

The results of an organization are more than ever determined by the ability of the organization to quickly internalize and respond to an ever-changing environment.

In other words, the organisation’s success is dependent on the strength of its learning capacity. Based on Absorptive Capacity by Lane et al 2006 and the realities of the 21st century, we learn that an organization has to master three pillars:

  1. Anticipating on the environment
  2. Utilizing internal experience
  3. Creating new opportunities

 To what extent an organization is succeeding in anticipating on the environment, utilizing internal experience and creating new opportunities is strongly dependent on the social interactions, decisions and actions in the organization.

Therefore, the organization can only be successful when these characteristics are part of the dominant behavioural patterns (the institutional culture or in other words, the organisation’s unwritten rules).

 Anticipating on the environment

Operating successfully in an ever changing environment requires an organization that has the capacity to translate external changes into internal adaptations.

The organization needs to transcend day-to-day short-term pressure and develop concrete answers that anticipate new realities in the environment it is interacting with.

Does your organization give its people the possibility to come up with innovative ideas? Do they get time for this? Does your organization actually internalise, appreciate and reward ideas that will make your team/department/organization run smarter?

The era where super talented geniuses used to be locked in a room fitted with basketball hoops, supplied with coloured bucky balls and fed with large quantities of coffee so that they can generate creative ideas for the entire organization is starting to break down.

Creativity and innovation must be made part of the organizational culture. Probably you have some (good) formal routes for innovation in place but we want to point out that at the end of the day, it is the employee’s perception that determines whether it is worthwhile to present a mind boggling idea or not.

 

The case of Xerox

Some time back when people at Xerox became aware that their patent on copy technology was almost expiring, the necessity for product diversification was huge.

They knew very well that Japanese competitors would conquer a large part of their market share based on lower prices. To navigate through this situation, they launched Palo Alto, a Research and Development Center with a mission to develop new products for Xerox.

The center was successful in inventing new technologies. However, Xerox was not the one benefiting from it. The reason being, an institutional culture in which the researchers convinced of the quality of the work they delivered  felt too good about themselves to present their brilliant ideas to their own management and the company’s commercial department.

This had far reaching consequences. Below is part of the list of technology initially developed by Xerox employees but commercialised by competitors:

  1. Portable computing: Grid Systems
  2. Laser printers: Apple, HP
  3. Drawing tablets: Koala
  4. Mouse and icon-based computing: Apple
  5. Graphic computing and computer animation: Pixar

(Source: Pfeffer, 1992)

 

So even though Xerox’ management was aware of the necessity to anticipate on the changing environment (triggered by the expiring date of their patent), the unwritten rules in their own organization were advancing their competitors.

 

Utilising internal experience

This characteristic is about assimilating valuable external knowledge with internal knowledge. If an organization wants to survive in an ever changing environment, everybody regardless of status or hierarchy should be able to bring in his or her relevantknowledge when the organization needs a certain solution to develop an idea.

Part of an effective institutional culture is that every time the most intelligent decision is made, anyone who can give a relevant contribution better not be hampered in doing so.

Experience and knowledge needs to flow through the organization: vertically (between hierarchical layers) and horizontally (between departments). The organisation’s unwritten rules can hamper or accelerate the process of combining innovative ideas with existing knowledge in the organization.

Not so long ago Anna Kinuthia, a delta 5 researcher and trainer facilitated a session with team leaders working in one of the biggest dairy factories in Europe.

At a certain point, she introduced a short game. During the debriefing, it appeared that five out of the 15 people had already done that particular exercise in another setting.

The interesting thing was that although a significant part of the participants had the experience and know how to bring the game to a good end, their experience was not used. Why not?

Whether or not experience and knowledge available in the organization is actually utilized is very much dependent on the institutional culture: on the unwritten rules. Do we recognize for our own organizations that at times existing experience is not used? (In case your answer is ‘No’, you might want to consider getting that confirmed by the people lower in your organization).

In the case of that particular training, the people didn’t speak out because in that organisation, one of the unwritten rules was ‘Don’t be the best boy of the class’. So basically, nobody dared to speak out that they knew the answer to the assignment that was given to them.

 Creating new opportunities

We have seen that good ideas alone will not give us profit. Therefore, the characteristic ‘creating new opportunities’ is about the organisation’s capacity to effectively assimilate knowledge to create commercial outputs or actual payoffs.

When a new idea seems to be good, is your organisation able to internalise it fast enough? Often, it just takes too long before an organisation is able to internalise an idea (time to routine) and make it accessible on the market (time to market).

We heard from employees of one of the leading telecommunications companies in East-Africa that expensive projects at times fail because it takes forever to internally organise things.

It is not that the employees are not skilled or knowledgeable in terms of project management, but internalising an idea just takes long because of unwritten rules like: We are too busy, let the other department take the initiative’ or ‘If it’s not in my KPI’s I will not spend time on it’.

 What do we learn from this?

If your organization is operating in an ever-changing environment and you think its ability to learn fast is essential for its survival, then you probably don’t want to underestimate the impact of unwritten rules. Identification of the unwritten rules in your organisation will give you insight in the strength of your organisation’s capacity to learn (the 3 pillars).

 

Email: info@delta5.co.ke

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