Page 117 - Managing Change in Organizations

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Chapter 6 ■ Theories of change: strategic management models
They go on to observe that this generally involves the Schumpeterian idea of ‘cre-
ative destruction’ as new business models replace old ones. The strategists’ task,
they claim, was that of ‘melding the best of what the older models have to tell us
with the ability to rapidly sense, act and mobilize, even under highly uncertain
conditions’.
Any methodology for doing so will clearly help us with analysing the degree
of ambition inherent in a given strategic change programme. What tools do they
propose?
1 They identify ‘deftness in the “project” team’ as a key indicator for success –
looking at the level of interpersonal confidence, confidence of the team in the
capability of others, information flows (i.e. the extent to which people have
the information they need, when they need it) and the quality of feedback.
2 Emerging competence – in terms of budgets, deadlines, costs, standards, service
objectives, client satisfaction, etc.
3 The potential for ‘distinctive value’ being delivered by the project.
4 The potential for ‘distinctive operational efficiency’ being delivered.
5 Reworking their terminology we would insert leverage – the extent to which
the ‘project’ will enable leverage of existing resources or capabilities.
6 Emergence of durable competitive advantage (a combination of two of their
indices).
7 While they do not present such an index, in effect they argue for, and there-
fore I include, the disproportionate allocation of resources and/or talent.
Clearly the last point is a dilemma but, just as clearly, the more ambitious the
‘project’ the more you could justify the disproportionate allocation of resource
and talent. Some of the above (in particular 3, 4, 5 and 6) appear strongly influ-
enced by the thinking underpinning GE’s market leadership rule, and these
authors tell us that one of them spent four years working with the GE work-out
programme.
Martin (1995) distinguishes between processes of continuous improvement
(such as kaizen or total quality management (TQM)) and what he variously calls

value stream reinvention or ‘enterprise engineering’. He argues that the latter
strives for 10 times, not 10 per cent, improvement. As one example, he refers to a
bank which had taken 17 days to process a mortgage request which it reduced to
two days while it moved from handling 33,000 to 200,000 loan requests each year
– and reduced error rates. But there are many examples of how technology appli-
cation combined with other changes has led to ‘breakthrough changes’ in organ-
izations as diverse as Ford, GE, Canon, Wal-Mart, CitiCorp, IBM, DuPont and
many others.
Ultimately, Martin concludes that breakthrough change can best be achieved
where organizations adopt the concept of the ‘learning laboratory’. He does not
really define this formally but the essence of his concept is that of an enterprise
in which there is ‘total integration’ of four knowledge sets:
1 Knowledge from TQM, kaizen and other problem-solving activities.
2 Knowledge from pilots, research, experiments and innovation.

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