MIT Sloan Management Review

Corporate Strategy, Leadership and Organizational Studies

 

Creating a Market-Driven Organization

By George S. Day

October 15, 1999

Why a company can lose touch with its market and how to reorient it through a successful change program.

As companies aspire to become market-driven, they exhort employees to get closer to customers, stay ahead of competitors, and make decisions based on their markets. Yet, even the best-intentioned senior managers find it difficult to translate those aspirations into action. Failed or flawed change programs have many symptoms, most of which are traceable to a lack of commitment to the deep-seated changes needed. The organization hasn’t fully grasped what it means to be market-driven — or why it matters — and lacks a clear path to that end.1 Further problems occur if the change program is unsuited to the task of orienting the business to its present and prospective markets.

While the underlying principles and prescription of generic change programs offer valuable guidance, the organization must sensitively tailor the design of a change program to become market-driven to the particular challenges of understanding, attracting, and keeping valuable customers. My purpose in this article is to establish the six conditions that ensure change process success. I use the experiences of four different change programs — Fidelity Investments, Sears Roebuck, Eurotunnel, and Owens Corning — and post-audits of some failed change initiatives to validate the change model and explain the necessary conditions for a durable shift to a market orientation.

What Triggers the Change Process?

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