Another great example of how organizational inertia can hold back progress. In addition to setting up a market of ideas, you need to take some of the politics out of decision making. Power needs to be more decentralized, and fewer managerial rungs in the ladder to climb.
It would be great if we could completely reframe what it is to advance to mean taking on bigger, more challenging and innovative projects. Creating a pull for innovative projects will be much better than mandates - a push approach.
It is really almost as though firms need to operate with two parallel organization - one focused on scaling and optimizing the core business, the other innovating and experimenting with new ventures and growth opportunities. There seems to be an inherent tension between the two, and some kind of buffer needs to be put in place to prevent interference.
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I suppose that is where an "ambidextrous" approach to organisational design comes into play. I am very inspired by the following HBR on this subject. https://hbr.org/2004/04/the-ambidextrous-organization. Happy reading!
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1) Often times, the policies and procedures created to build an operation become rigid, codified such that they are hardened and protected institutionalized barriers to change. In effect, the very structure of the organization that led you to your current successful location in whatever industry you play in is what is keeping you from becoming competitive by fusing the status quo (or freezing, as Lewin would suggest, that which needs to be unfrozen).
2) Most change efforst fail the resource allocation tests. That is, almost all the time, employees are asked to continue doing and what they are doing, and rewarding for the status quo while new initiatives or practices are simultaneously not reward. Pfeffer would suggest that this all falls into resource dependency theory, and March & Simon clearly said about a half century ago, you get what you pay for.
If companies and leaders of them want to foster innovation, the culture of of the operation must embrace and reward the chaos that change brings, and divert the funding models such that change is rewarded, the status quo crutches are kicked to the curb, burned, and old practice no longer rewarded.
Here in lies a particular snag. Do/can rewards actually breed change? I showed the following video to my students this past semester, and it got them thinking - do rewards really incentivize behaviors that breed innovative change?
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