Wednesday 12 September 2012

How do leading firms manage change? They’re strategic.


H
ow do leading firms manage change? They’re strategic says Professor Robert Macintosh of Glasgow University. If two words sums up the Professor’s idea, its got to be crucial insights. Or plainly expressed, firms with strategists that reason productively diagnose the right problem. There is no question that managers need help to understand issues from multiple perspectives. Especially if emphasis is made on the need to diagnose the right problem. For instance, on the introduction of the Dyson as a bag-less vacuum cleaner which changed the nature of that industry. Many of the incumbent firms began to struggle to compete, losing both market share and money. It was clear that the problem was being defined differently by different groups within well-know vacuum cleaner firms. Those in marketing and product development felt sure that consumers wanted a more powerful machine because the power rating of the motor implied greater suction and greater suction meant higher cleaning efficiency.  The design engineers didn’t see the problem in the same way at all.


“they [the marketing people] keep asking for more power.  We’re building cleaners with bigger and bigger motors but that just means that the machines get more expensive and heavier.  Worse still, my team is now designing systems to dissipate some of the suction produced because if it was all directed at the carpet the machine would suck so hard you wouldn’t be able to push it along.”
                        
                                                                                         Senior Design Engineer



For the engineers, the problem was one of improving product reliability and reducing the costs of production by standardizing components and streamlining assembly processes.  The senior management of the firm were however, thinking at a different level of abstraction and were concerned about the cost base of their operations.  This led to a decision to close UK-based factories and move production to eastern Europe where wage costs were lower.  Each group had framed the problem in its own terms.  Everyone saw the same symptoms, lower revenues and declining market share, but each group diagnosed different causal mechanisms and therefore arrived at divergent conclusions on how best to move forward. Could all this change if managers are equipped with tools that enable them think critically. Perhaps, an  enquiry-action learning approach could help enhance performance. But first, firms have to set out a course today, and dynamically prepare on how they might set out to explore these tomorrow.

(Snippet from the book “Managing Change: Enquiry and Action by Robert Macintosh and Nic Beech”, Cambridge University Press).