Platt Perspective on Business and Technology

Reexamining business school fundamentals – change management in a rapidly changing context

Posted in reexamining the fundamentals, strategy and planning by Timothy Platt on August 3, 2010

In a fundamental sense, the entire series I have been assembling here on reexamining the fundamentals has been about change, and a complex of changes that are already beginning to make themselves felt, and for employees and those in job search and for businesses, for suppliers and customers and for those who focus on legal systems and for all frameworks that businesses operate in and across entire marketplaces. But this posting is going to focus on a very specific type of change – change mandated not by choice or according to pre-planned and more convenient schedules but change that is thrust upon a business. Stating that, I have to admit the change I have been writing about in this series and this second, more business-specific conception of change have a lot in common with the primary difference being one of scale.

People generally think of change management as taking place within an organization as it seeks to step back from approaching disaster and out of the already problematical. The postings that I have been writing in this series have addressed the issues of rapid evolutionary and even revolutionary change in entire marketplaces and economies. And that is where the individual business enters in as a meaningful level of consideration. Businesses that cannot change and keep up with the changes in their environment, and both for potential problems and for potential opportunities face the need for that more traditional sort of change management if they are to remain competitive and survive, let alone thrive.

As I write this I find myself remembering a turn of the century passage I read many years ago (end of 19th and beginning of 20th in this case) about horses. The writer lived in New York City and as such had to traverse its streets, still heavily trafficked by horse drawn wagons, and he did a study examining city records as to the numbers of horses and wagons in use and how those numbers had been steadily increasing. And he concluded that at the rate things were developing, by 1950 (I think I have the year right), every street in the entire city would be many feet deep in manure, curb to curb and in fact building front to building front. Of course the horse drawn wagon was long gone from those streets well before that year and only tourist-oriented horse drawn carriages that mostly operate within Central Park and a few other select areas still remain. I relate this as a cautionary note to any predictive discussion, as anyone who seeks to find a valid linear projection forward in time, or even an anticipatable nonlinear projection can find themselves remembering manure.

But the topic here is change management, and at the risk of sounding quaint within a fairly short span of time, I will address that here, and how some of the changes in business context that are coming will change what constitutes valid change management and even just within the single organization.

Given the unexpected directions that technology can take with new and breakthrough products and services, there is one general point I can suggest with at least some confidence as a predictor for future success.

The business that has a type and level of flexibility to quickly and cost-effectively move into new value chain opportunities and that can rapidly develop new sources of value through them will thrive.

Similarly, the company that strategically plans and executes as a stand-alone and one-against-all venture will find itself being outcompeted as the value chains it competes with assemble core strengths that no one business could match and still keep their efforts and expenditures in focus.

By this criteria, I would predict that long term a company like Apple, recently listed as having higher marketplace valuation than Microsoft will have difficulty retaining that position in the marketplace. They have traditionally taken an approach of having to control everything, and this has definitely not always been to their benefit. So their early desktop computers were much more user-friendly, with easy to learn and even intuitive user interfaces, but Microsoft with its DOS command line and ugly screens still prevailed, and came to dominate the software market. In this I point out by way of analogy that where Henry Ford did not invent the car, he did invent the modern assembly line for building them and in ways that made them affordable to the general public. Bill Gates and his partners, similarly, did not invent the operating system or software, but they realized that computer hardware could do nothing without them, so focusing on that one area could lead to greater efficiency in dominating and coming to define the modern desktop computer. Microsoft did not try to be all things to all people. Apple did, and I do not see that changing. And in the future they will not just be competing against agile and creative single companies, but rather with networks of companies organized to compete with and take market share from them.

By the same criteria, I would predict a company like Li & Fung to thrive as they are organized with a strategic focus on developing collaborative shared value and with rapid refocusing of resources to meet rapidly developing and evolving opportunities. They are literally redefining the modern supply chain in doing this.

As a final thought this posting has focused on both a developing context where change management might become needed, and a direction that effective change management would have to lead a business.

The next and last posting in this series, at least for now is going to attempt to tie together a range of points made and suggested through the immediately preceding 12 and this.

Tagged with:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: