Winter 1997, Vol. 38, No. 2

 

That we live in a time of great and rapid change is a dreadful cliché. Here at SMR we yawn as we delete the umpteenth introduction that begins: "Globalization, the rising use of information technology, and the dizzying pace of change have forever changed the competitive landscape. . . ." Perhaps because of the approaching millenium, the rhetoric has heated up, and recently we've heard otherwise reliable people claim that we'll experience more change in the next 20 years than we have in the previous 500. I wouldn't go that far, but the cliché does point to a serious, complicated concern. The MIT Sloan School's group "Inventing the Organizations of the 21st Century" is addressing that concern. Four papers in this issue are linked, directly or not, with that initiative.

Wanda Orlikowski and Debra Hofman suggest that, in managing IT-enabled change, we should take as a model the Trukese navigator who "begins with an objective rather than a plan . . . and responds to conditions as they arise in an ad hoc fashion." The traditional change model - unfreeze, change, refreeze - presupposes that change happens only during a specified period, whereas now it is our constant companion. Their paper looks closely at a software firm that anticipated change, responded to emergent change, and introduced opportunity-based change during a process revamp.

Thomas Malone writes about organizational structure, empowerment, and the tendency of information technologies (IT) to push decision making (and thus power) lower in the organization. The "cyber-cowboy" — who makes decisions independently, but bases judgments on information available throughout the firm — may be the organizational hero of the next decade.

Erik Brynjolfsson is best known, so far, for his work on the "productivity paradox" (the question of why IT investments do not appear to correlate with increased productivity). Here he teams up with Amy Austin Renshaw and Marshall Van Alstyne to propose the matrix of change, a model for managing systemic change in a coordinated fashion. The article, which builds on the house of quality model, includes a detailed case description. This model seems more practical than most; I can picture readers absorbing the article, then picking up a pencil and trying it out on their own projects.

The best-known reengineering gurus seemed shockingly indifferent to the people their consulting assignments affected early on. Surely many reengineering failures can be traced to that indifference. Lynne Markus and Robert Benjamin apply organizational development insights to large-scale change management and in doing so bring a psychological perspective (and a measure of decency, I'm tempted to say) back into the discussion. Their bottom-line message: serious change won't stick unless all the players believe that their effort — not the magical power of information technology — is the key to success. (We've granted these last authors honorary MIT status; Markus did her graduate work here, and Benjamin was affiliated for years with the Center for Information Systems Research.)

So the MIT change management team tackled operations, business structure, and human resource issues. Bala Chakravarthy from the University of Michigan takes on corporate strategy and concludes that familiar competitive strategy frameworks are not designed to deal with extreme turbulence. Being a first mover is a good idea; so is growing a customer base; so is fostering core competencies. Ultimately, though, success is determined by forces outside a firm's control, and sometimes you simply have to "go with the flow."

Japanese leaders have responded to the collapse of the bubble economy with a lot of soul searching about their business structures (much as U.S. leaders did when those same Japanese threatened U.S. dominance of world trade). According to Japanese businessman Hiroyuki Tezuka, industrial policies and the keiretsu system foster fierce competition that (paradoxically to Americans) does not create any losers. Firms that would be forced out of business in the United States are kept alive in Japan; employees who would lose their jobs here do not in Japan. This system is not sustainable in low-growth periods, according to Tezuka. Japan now needs risk takers, but risk taking is anathema to most Japanese businesspeople. Changing business structures — without losing what's good in the old system — won't be easy.

Can international supply chains and lean production coexist? Does "just in time" mean anything if you're producing parts in Mexico for assembly in Indonesia? Maybe, maybe not, according to David Levy; he analyzes the areas of difficulty when these two approaches collide and proposes some interesting solutions.

The early stages of product development are most fraught with difficulty, according to Anil Khurana and Stephen Rosenthal . They studied sixteen firms' development processes and concluded that success depends on two issues: degree of formality (how explicitly various issues are addressed) and level of activity integration.

— Sarah Cliffe

 

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