David A Garvin | PubMed Health

PubMed2006

Meeting the challenge of corporate entrepreneurship.

To be competitive, companies must grow innovative new businesses. Corporate entrepreneurship, however, isn't easy. New ventures face innumerable barriers and seldom mesh smoothly with well-established systems, processes, and cultures. Nonetheless, success requires a balance of old and new organizational traits-and unless companies keep those opposing forces in equilibrium, their new businesses will flounder. The authors describe the challenges companies face when they pursue new businesses, as well as the usual problematic responses to those challenges. Such companies, they say, must perform three balancing acts: Develop strategy by trial and error, which includes narrowing potential choices, learning from small samples, using prototypes to test business models, tracking progress through nonfinancial measures, and knowing how and when to pull the plug on a new venture. Find the best combination of old and new operational processes by staffing new ventures with "mature turks", changing veterans' thinking, knowing which capabilities to develop and which to acquire, and having old and new businesses share responsibility for operating decisions. Strike the right balance of integration and autonomy by assigning both corporate and operating sponsors to new ventures, establishing criteria for handoffs to existing divisions, and using creative organizational structures. The authors provide a detailed look at IBM's Emerging Business Opportunity system, which manages all these balancing acts simultaneously.

Commerce↗

PubMed2005

Change through persuasion.

Faced with the need for a massive change, most managers respond predictably. They revamp the organization's strategy, shift around staff, and root out inefficiencies. They then wait patiently for performance to improve--only to be bitterly disappointed because they've failed to adequately prepare employees for the change. In this article, the authors contend that to make change stick, leaders must conduct an effective persuasion campaign-one that begins weeks or months before the turn-around plan is set in concrete. Like a political campaign, a persuasion campaign is largely one of differentiation from the past. Turnaround leaders must convince people that the organization is truly on its deathbed-or, at the very least, that radical changes are required if the organization is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) And they must demonstrate through word and deed that they are the right leaders with the right plan. Accomplishing all this calls for a four-part communications strategy. Prior to announcing a turnaround plan, leaders need to set the stage for employees' acceptance of it. At the time of delivery, they must present a framework through which employees can interpret information and messages about the plan. As time passes, they must manage the mood so that employees' emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold and that there's no backsliding. Using the example of the dramatic turn-around at Boston's Beth Israel Deaconess Medical Center, the authors elucidate the inner workings of a successful change effort.

Boston↗