- Design Principles for Adaptive Businesses
- Organization of the Book
- Basis of the Ideas
This chapter is from the book
This chapter is from the book
This chapter is from the book
Organization of the Book
In the rest of Part I, “Why Change?,” I build the case for transforming the modern enterprise by addressing its key limitations and the impact they have on performance.
Chapter 2, “Shadows of the Past,” first summarizes a fascinating piece of historical research that tracks how and why companies have changed over the last two-hundred-odd years. In response to periodic “epochal” shifts, companies have modified how work is performed, how their organizations are structured, and even their corporate ethos. Distributed computer networks are driving the present epochal change by fragmenting work across time and space, engendering extreme product customization, and blurring industrial boundaries. In this environment, companies will fall into the execution trap if they believe that reliance on traditional “good management”—plan well and execute brilliantly—alone will help them succeed.
Chapter 3, “Visions from the Present,” advances the case for corporate transformation. In order to succeed in a world of corporate networks, companies must develop three capabilities to augment their traditional plan-and-execute skills. They must be able to sense changes in their environments, respond to these seamlessly, and learn from their experiences and apply the lessons in other situations. Senior executives should take responsibility for guiding this transformation, because research shows that financial markets are penalizing companies and executives for perceived failures more severely than ever before.
Part II, “Design Principles for Adaptive Capabilities,” lays out the four Design Principles that can transform a company.
Chapter 4, “Transform Everyday Work,” introduces the first Design Principle: Embed sense-and-respond capabilities within normal plan-and-execute processes. Without embedding, a company cannot be adaptive; at best, it can be great at managing crises. Embedding requires changing work practices, just as becoming truly quality-focused requires making quality the responsibility of individual employees.
Chapter 5, “Succeed in a Dog-Eat-Dog World,” explains the second Design Principle: Adopt strategies that promote collaborative action among network partners. The fragmentation of work will require companies to create win-win partnerships with their partners, because no company can succeed while its network is ailing. Research shows that executives recognize the need for collaboration, but this does not always lead to action. Understanding why companies act against their best interests can help executives change such behavior.
Chapter 6, “Ensure That Work Teaches,” discusses the third Design Principle: Value and nurture organizational learning. The failure to learn keeps companies from intelligent and effortless adaptation. It impedes both the effective use of the prior Principles and the interpretation of environmental signals to take action. Executives must understand how they can manage culture, systems, and organizational structure to improve their companies’ ability to learn.
Chapter 7, “Make Technology Matter,” provides focused guidance on the fourth Design Principle: Deploy technologies that enable intelligent adjustment to major environmental shifts. It asserts that companies must invest in technologies that provide visibility, support analysis, facilitate collaboration, or enable mobility. Technologies that do not build these capabilities may be essential for security or legal reasons, but they will not provide competitive advantage. This discussion focuses on technology strategy (what, why) and not technical details (how).
Part III, “Going Adaptive,” discusses the challenging task of transforming a company into an Adaptive Business by systematically implementing the four Design Principles.
Chapter 8, “Create the Organization,” addresses the organizational changes companies must make. Managing internal and external networks must become a focal point for key decisions. People who are superb at designing, creating, and managing human networks will undertake this task and increasingly become highly prized by their employers. A Chief Network Officer, who may or may not be formally designated as such, should lead them.
Chapter 9, “Introduce Change Holographically,” deals with the general management challenge of initiating the transformation and maintaining momentum. Companies must adopt what I call holographic change management. This approach advocates the implementation of all four Design Principles in one business area and subsequent replication in other areas. It also advises against implementing one Design Principle at a time across the entire company.
The Epilogue brings closure by describing two perspectives on an Adaptive Business. One comes from a junior manager who works at the company, while the other comes from this person’s CEO.
Given my focus on corporate transformation, many of the issues I discuss fall within the bailiwicks of top managers. Starting with Chapter 2, I make specific recommendations for them. However, becoming adaptive is not a spectator sport for middle managers and other professionals; indeed, Hewlett-Packard’s efforts have been led by such people. Most chapters, therefore, end with a sidebar titled “So You Are Not the CEO...,” which addresses the critical roles these professionals must play.