Resist pressure from shareholders and others who seek short-term gains. Instead, build compacts with employees, communities, investors, and other stakeholders that will create long-term shareholder value, benefitting all parties.
The bottom-up "Spaghetti Organization" for pioneering innovation at Oticon was successful growing the top line for almost two decades, but gradually became too fragmented and costly as the company increased in size. The failure of a high cost revolutionary new product launch, together with the appointment of a new president triggered a redesign of the innovation process towards technological innovation in competence domains producing modules that could be assembled into new products designed by brand specific product teams. However, the new innovation process led to frustration and confusion. Learning objectives: Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).
The management team introduced a "cultural revolution" to support the new innovation process, followed by an innovation workflow involving project portfolio planning and road mapping, as well as involvement of marketing and production. Learning objectives: Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).
The new innovation process has been accepted and begun to produce results, but is not yet entirely satisfactory. Learning objectives: Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).
The A-case begins with Tony Hayward's appointment as CEO of BP. Hayward was immediately faced with the challenge of convincing the board that he could streamline BP's cost structure, while at the same time addressing the other main issue facing the company, its safety record. One of the board's subcommittees, the safety, ethics and environment assurance committee (SEEAC), had the mandate to identify and mitigate significant non-financial risks and ensure the company achieved its goal of "no accidents, no harm to people, and no damage to the environment." Learning objectives: Strategic positioning in terms of risk and costs; setting strategic priorities; comparison competitors; managing the expectations of the board.
Having spent the past five years working with the boards of some of the world's leading organizations, the authors reached a conclusion: boards need to become much more diverse -- not just demographically, but also in terms of the backgrounds, competencies and interests of their members. However, they warn that putting fresh faces onto boards provides no guarantee that benefits will ensue: diversity can also lead to gridlock. The fact is, people often feel threatened or annoyed by colleagues who are very different from themselves and have difficulty accepting, much less appreciating, those colleagues. In this article they describe the costs and benefits of diversity and provide seven recommendations for effectively diversifying boards - or senior teams -- in any industry.
This is an MIT Sloan Management Review article. Many corporate boards adopt a one-size-fits-all approach to governance. Instead, they should consider that their primary role must shift depending on various conditions, both internal and external. Boards have four main functions--auditing, supervising, coaching, and steering--each with a different perspective and behavior. The roles reflect two main differences in board culture. The first type of board concerns itself mainly with shareholder interests or shareholder plus other stakeholder interests. The focus is on externalities. The second type of board either monitors executives' activities or gets actively involved in the conduct of the organization. Here the focus is on handling ineffective management. The basic role types are not mutually exclusive; instead they reflect different board cultures that result from different emphases on decision making and resource allocation. During any time period, a board must determine what its dominant role should be, given the current conditions.
Despite the best efforts of senior executives, major change initiatives often fail. Those failures have at least one common root: Executives and employees see change differently. For senior managers, change means opportunity--both for the business and for themselves. But for many employees, change is seen as disruptive and intrusive. To close this gap, says Paul Strebel, managers must reconsider their employees' "personal compacts"--the mutual obligations and commitments that exist between employees and the company. Personal compacts in all companies have three dimensions: formal, psychological, and social. Employees determine their responsibilities, their level of commitment to their work, and the company's values by asking questions along these dimensions. How a company answers them is the key to successful change.