Core Values and Organizational Change (Theory and Practice)

                                                                         


Adapting market environment is becoming more and more important for business survival in this turbulent climate.  Unfortunately, organizations very often face a lot of challenges when adjustingtheir operations in order to cope with the competitive environment.  Most of these challenges are emotional, rather than technical issues.  In reality, new strategic or operation plans can be very logical and business sound on paper, human factors can still tear these plans apart. Therefore, change processes are very complex and dynamic activities with unpredictable outcomes.

A book titled Core Values and Organizational Change Theory and Practice provides very compelling arguments and systemic methods to tackle the human issues during change processes. The book starts from highly academic arguments about the philosophies of business management: modernism, status quo thinking and postmodernism.  These three philosophies have a fundamental impact on how a management may approach the change processes as shown below:

What every body is saying

                                                                           

Interpersonal communication is one of the most important aspects in human resource (HR) study for a very obvious reason, because HR practitioners need to communicate with vast amounts of people from different backgrounds, interests andambitions. Thus, possessing a set of effective interpersonal communication skills is an invaluable asset to any HR practitioners.    

As most people know, interpersonal communication consists of verbal and nonverbal components. Verbal communication basically means talking in words. On the other hand, nonverbal communication involves  facial expressions, gestures, touching, physical movement, posture, body adornment and even the tone, timbre, and volume of an individual’s voice.  Nonverbal communication comprises of approximately 60- 65% percent of all interpersonal communication.  Sadly, not even one subject in my 5 years of study in HR management teaches nonverbal communication. All the subjects are focused on written and verbal communication training. Therefore, I am often fascinated by TV shows about body languages like “The Mentalist” and “Lie To Me”. I always wonder how true these shows really are. Can a person read everything about other people’s thought barely based on body language? Can they really detect liars based on this science?

Blue Ocean Strategy

                                                                         

Companies have long engaged in head-to-head competition in search of sustainable, profitable growth. They have long fought for competitive advantage, battled over market share, and struggled for differentiation. These often lead to intense price wars, slow growth and low profitability.

So, can we break this rather pessimistic ending? In the academic world, the answer is yes.  Many business theorists offer mental frameworks to reinvent businesses. However, most of them are still at an experimental stage and they offer very little practical use.

Fortunately, a book titled “Blue Ocean Strategy” provides practical tools and methods for business practitioners to reinvent their businesses. These tools and methods are based on more than 15 years of research on more than 20 companies across different industries in Europe, Asia and America. The focus of these tools and methods are:  searching, formulating, evaluating and executing blue ocean strategies. Details are given in a mind map at the end of this post.

Buy*In

                                                                       

Have you ever had an experience such as this? You believe in a good idea. You know it could make a crucial difference for you, your organization, and your community. You present it and hoping to garner some enthusiastic support. Instead, you get confounding questions, inane comments, and verbal bullets. Before you know what’s hitting you, you idea is dead and shot down. Personally, I have lots of such experiences, from presenting a business pitch in a room full of venture capitalists to guessing to add a new position for a department. People can always come up with questions which I can neverprepare myself for. This would put me in a vulnerable position, because I cannot provide perfect answers for those unexpected questions.  Before I know it, more and more people start to jump in and question the idea. At the end, my idea is dead.

In a book titled “Buy*In” offers a systematic method to handle these tough questions when you presents your new ideas or proposals. This book is written by John P. Kotter (a professor inleadership and change management at Harvard Business School) and Lorne A. Whitehead (a leader of education innovation at the University of British Columbia). They put years of real life experiences  in corporations and combine  complicated theories to create the method. Don’t worry though. The goal of this book is to provide practical tools for business practitioners, and not to pose an academic argument. Therefore, this book is written in very plain and simple English. They also use a lot of storytelling methods to demonstrate how their method works in real life settings. 

The Hobbit and Team Dynamic

                                                                       

Many entrepreneurs constantly face human resource (HR) problems. One predominant HR issue for start-up companies is having to manage their founding teams effectively. Start-up companies are inhered with 3 major difficulties in dealing with team issues:

1.       Under-Resourced. Most start-up companies lack finances to compensate member’s effort and their opportunity cost.

2.        High Level of Uncertainty. Start-up companies generally ignore detailed business planning processes. Most founders have rough business ideas, and just work with them. Therefore, start-up companies often change their demand on skill sets and capabilities rapidly to cope with unseen situations.     

3.       Loose Organizational Culture and Values. Founders often ignore the need strengthen their organizational culture and values, because they are too tied down by the day to day workload. 

Creative Destruction

The first Standard and Poor’s (S&P) index was created in 1920 in USA. 90 major companies were on the original list for a span of 65 years. In 1998, the S&P list was expanded to 500 companies and their average life spans were around 10 years. In 2000s, some studies suggested that the average life span of top companieswould be shortened to 5 years. This shocking trend is mostly caused by the effect of intensified creative destruction.

In a journal article titled Creative Destruction, it  describes interactions between companies and markets in the creative destruction process and implications for management to take advantage of the process. This summary is shown in a mind map at the end of this post.  

Creative destruction theory  explains how the economy evolves in a capitalist environment. This particular theory focuses on innovation aspects of economic development. The key concept of creative destruction is that innovative breakthrough can only be achieved by destroying some of the current economic system and status quo. This simply means that innovation can only created by changing the rules of game. As this happens in a rapid pace in the past 20 years, many companies which cannot catch up and adopt with the new rules, they have to leave the game.  Nowadays, if companies do not have the  ability to embrace creative destruction in their strategies and operations, they will  not survive very long in the game.

Apple Case Study 2006

Apple Computer 2006, Case study

I believe many of us are using Apple’s products these days. Personally, I have an iPod touch and iPod Nano, and currently I am thinking of getting a MacBook. To be honest, I did not really like Apple’s products till 6 years ago when they released the iPod Nano. I remember my very first computer  being an Apple PC. It was around 20 years ago and I was so disappointed with the PC. I threw the Apple PC a year later and brought an IBM PC. Why? Simply because I could not play most of the games on the Apple PC and exchange files with my other friends who used IBM PCs. The worst of all, I paid premium price for the Apple PC. It was like spending a lot of money to buy a digital prison for myself. Therefore, my impression of Apple’s products was very poor. I would use “the producer of premium rubbish” to describe Apple in the past.

So, how did  Apple turn-around from producing “premium rubbish” to “premium wonder”? A Harvard Business School case study  titled “Apple Computer, 2006” written by David B. Yoffie and Micheal Slind describes the amazing transformation of Apple. This case study offers a very good insight as to why entrepreneurs should learn and progress from both their successes and failures.

Freakonomics and Super-Freakonomics

                                                      

I came across the book titled  Freakonomics in 2005. A good friend of mine, Bryan recommended the book to me. He told me that the book was about applying economics theories and principles in real life situations. He also said that the content was quite entertaining. I was puzzled by the comment. How can economics be entertaining? I have been studying economic for years since high school. I could never relate economics with entertainment. To be honest, I did not think that economics could be applied in real life as well. They were just theories which only worked out in the ideal world. However, after I have read Freakonomics and its sequels Super-Freakonomics, later published  in 2010, I have to admit that I was wrong.

The authors Steven D. Levitt and Stephen J. Dubner used microeconomics concepts and principles to explore some controversial events and social phenomenon we witness in real life . Such as, why do drug dealers still live with their moms? What makes a perfect parent?  How is a street prostitute like a department-store Santa? Why should suicide bombers buy life insurance? The depths of these case studies were almostacademic standards, and surprisingly, they were all very realistic and interesting.

As the authors stated, the proposition  of writing Frackonomics and Super-Freakonomics was to start a conversation with the general public, not to come up a theory to predict the future and solve problems as many people would expect from economists. However, four key themes were delivered through these unusual case studies. 1) People were always response to incentives.  2) The definition of incentives was dictated by the given environment. 3) Objective statistical analysis could clarify situations and identify possible solutions. 4) Unintended consequences were inherited in every decision.

Getting Past No: Negotiating In Difficult Situation (6/6)

What if, despite all your efforts to build your opponent a golden bridge, he still refuses to come to an agreement? Your natural reaction would be to abandon the problem solving approach, and shift the nature of the negotiation into a power game.  In a power game, you switch from listening and acknowledging to threatening. From reframing your opponent’s position to insisting on your own.  And from building a golden bridge to force him down from his position.  The worst part in  playing  a power game is that you escalate  not only your means, but also your ends. When you invest more of your resources in the battle, you naturally want more from your opponent to compensate for your time and effort. Thus, your goal shift from mutual satisfaction to victory, or from win-win to win-lose.  This is when people say “Screw it! I have had enough of his nonsense. If he is so childish about this, I will teach him a hard lesson!”      

The power game is supposed to work as follows: You threaten or try to coerce your opponent and then he backs down. However, unless you have a decisive power advantage, he usually resists and fights back. He gets angry and hostile, reversing your attempts to disarm him. He sticks to his position even more, frustrating your efforts to change the game. He becomes increasingly resistant to reaching agreement, not only because you may be asking for more but because agreement would now mean accepting defect. This demonstrates the typical power paradox: “The harder you make it for him to say no, the harder you make it for him to say yes.”  

Getting Past No: Negotiating In Difficult Situation (5/6)

The philosophy of “BUILD THEM A GOLDEN BRIDGE” is from one of the Sun Tzu strategy, “Don’t push your enemy to the corner, and build them a golden bridge to retreat across.” Why? Even though you have evaluated the situation objectively (step one), created positive environment to negotiate (step two), and engaged your opponent in problem solving negotiations (step three), you still have to bring he/she to a concrete agreement. Too often, this is where negotiations fall apart, because they underestimate the influence of human factors when they are forming terms and conditions in agreements.    

A classic case study from a spectacular failure of a world’s biggest media merger can demonstrate the devastated power of human influence in negotiating simple details. In 1958, CBS was fighting a hostile takeover bid by media tycoon Ted Turner. Neutharth, president of Gannett, had long had his eye on CBS and had cultivated a cordial relationship with CBS president Tom Wyman. After several exploration meetings the two men reached agreement on most of the fundamental issues. They decided that because of his age and greater experience, Neuharth would become chairman and CEO, while Wyman would become president and chief operating officer. It all went very smoothly, until when executives from both companies began to prepare details. Neuharth described this turning point in his memoir.