Page 116 - Managing Change in Organizations

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Radical or transformational change
any given situation. And yet, as we have seen, you can mobilize large-scale endeav-
our in pursuit of continuous improvement if you get the balance of control and
autonomy right. Part of the answer may be revealed in Hampden-Turner (1996).
He argues that value creation involves a configuration of values. Products
have two sorts of values, unit value or market price and integral value, the value
of the product to other products present or future. Here we see the GE idea of
leverage. Put another way, any change idea which is scaleable cannot be overly
ambitious – probably an overstatement but the essential point is that scaleable
changes create an accelerator effect, thus cascading enhanced value around the
organization. Thus, again, the GE work-out was scaleable in its own right but it,
in turn, became a platform to accelerate change in the subsequent change man-
agement programme. And the accelerator effect includes learning, explicitly in
the GE case and elsewhere (see below).
Rieley (2001) writes about these issues using cybernetic theory as his source of
language and thinking. But the essence of his argument is equivalent to that of
Argyris’ view of simple versus double-loop thinking. Faced by evidence of a gap
between desired and actual effectiveness, organizations too often seek to deal
with symptom rather than underlying cause and thereby often make matters
worse. He calls this ‘gaming the system’. Thus a company faced by high pro-
curement costs incentivizes purchasing staff to reduce costs. This leads to pres-
sure on suppliers, which in turn leads to quality and delivery issues, which mean
that total cost is increased, not reduced.
Of course this is the very problem which management techniques such as the
balanced scorecard are intended to reveal (see Chapter 7) but in essence Rieley
argues that managers can be locked into a ‘mind-set’ which equates reorganizing
to deal with immediate symptoms as the way forward. Repeated reorganization
increases complexity and reduces alignment. This lack of alignment reduces
effectiveness and sustainability. More importantly:
The addiction to change will decrease the ability to see and understand the
long-term vision for the organization.
And this is rather like Miller’s concept of the Icarus Paradox. Built into earlier suc-
cess can be an unwillingness to focus on new causes of lack of current success, lead-

ing to a tendency to incremental rather than fundamental change. He proposes the
use of a vision deployment matrix as an analytical tool to help people focus on the
impact of change. This requires managers in an organization to articulate vision,
mental models (beliefs and assumptions aligned to the vision), systemic structures
(consistent with the mental models and vision), patterns (of behaviour) and events
(indicative of the vision having been achieved) alongside definitions of current real-
ity, desired reality, gaps, action steps and measures of progress. As a pro forma this
may well be helpful. But for us the key point is that openness and alignment are
argued as means toward fundamental change – and therefore ambitious change?
McGrath and MacMillan (2000) write about the need for an ‘entrepreneurial
mindset’ for dealing with uncertainty. For them:
Uncertainty was seen as essential to the capture of profits from creating new
combinations of productive resources, because profit came from perceiving an
opportunity not obvious to others and then investing to capitalise on it.

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