1. Page 1 of 4 © Copyright Adapting to Change
Walter.deruyter@unitingagedcare.org.au ph 0417419238
Adapting to Change
18-3-12 revised 11-5-12
Précis What is error but uncontrolled variation? Mature governance and emerging
governance systems control variation which in practice is often out of sync and
uncompetitive within a variable and fluid market. Introducing a model of controlled
variation allows mature or developing governance systems to be adaptive and
competitive in response to variable and fluid markets. The link between controlled
variation and market opportunity is based on how you manage your organizational
knowledge.
Creating a greater value from organizational knowledge requires a conversion process so
as to make that property “fungible” (ability to transfer its value). Eg For many we
experience time from sunset to sundown, to make that time work for us we require a
“clock” so we can work in unison to an agreed direction which derives value from time.
The following elements of practice bring value to organizational knowledge, as is the
clock which brings value to a concept called time!
Approaching Change:- Organisations or people in them often don’t change unless it is
thrust upon them. A bit like the saying…if it ain't broke, don't fix it (spoken) also if it's
not broke, don't fix it is a mistake to try to improve something that works e.g. He hasn't
made a lot of changes to the team since taking over as head coach, figuring if it ain't
broke, don't fix it.1
As a consequence the “coach” has a narrative on the game that works for that team in that
location. This is the reason why structures are they way they are. It doesn’t answer the
question why organisations do have variation within their organisational structure. The
answer may be…intuitively over time through trial and error it works for that group in
another location based upon the variation and intersection between the supply and
demand of elements that are readily available in one area but not another.
A common observation when someone comes to a position of authority, where based
upon their success they ask the question; why aren’t you doing what I did to become
successful? Rather than asking the question; why are you doing it this way and what you
do to measure your success, which is in line with the Vision and Mission of the
Organisation?
 The former tends to be a short term view where the organisation runs the risk of
reducing variation to an absolute minimum. Not unlike one size fits all.
 The latter a longer term view creates a sustainable legacy as the organisation
recognises variation as an adaptive element of collective effort, responding to
1
Cambridge Dictionary of American Idioms Copyright © Cambridge University Press 2003. Reproduced
with permission http://idioms.thefreedictionary.com/if+it+ain't+broke,+don't+fix+it

2. Page 2 of 4 © Copyright Adapting to Change
Walter.deruyter@unitingagedcare.org.au ph 0417419238
local markets. Variation from operative norms is not necessarily a weakness as
long as this variation and knowledge behind it is controlled.
A Model of Change:- The following slides schematically outlines a framework for
encouraging controlled variation. The following quote of an algorithmic statement of the
hypothetico-deductive method:[6] as paraphrased by Walter de Ruyter (WdR), helps to
explain why variation can be a strength in a rapidly changing environment or market.
1. Gather data (observations about something that is unknown, unexplained, or new)
2. Hypothesize an explanation for those observations. (Making sense of something
on the periphery of what is known WdR)
3. Deduce a consequence of that explanation (a prediction). (Not unlike a person
describing gut feeling / intuition. WdR)
4. Formulate an experiment to see if the predicted consequence is observed.
(surveys, measure before and after, etc… WdR
5. Wait for corroboration. If there is corroboration, go to step 3. If not, the
hypothesis is falsified. Go to step 2. (Often its is a process of trial and error WdR)
http://en.wikipedia.org/wiki/Hypothetico-deductive_model
Copyright - Walter de Ruyter
Changing the Paradigm
Hypothetico-Deductive Model
Existing Paradigm
Expertise
Expertise Expertise
Expertise
Expertise
Expertise
Emerging Organisational Paradigm
A dynamic evolving process

3. Page 3 of 4 © Copyright Adapting to Change
Walter.deruyter@unitingagedcare.org.au ph 0417419238
Copyright - Walter de Ruyter
Changing the Paradigm
Hypothetico-Deductive Model
declining Paradigm
Expertise
Expertise Expertise
Expertise
Expertise
Expertise
Establishing Organisational Paradigm
A dynamic evolving process
Establish Presence
Practice Development
(Adds Value)
Sustains Business
Knowledge Brand & Market Share
© W. de Ruyter Dec 2011 revised 6-3-12
Information exposed
To practice Becomes
Knowledge
Knowledge influenced
By values
Becomes
Wisdom
Culture defines
Brand
Brand influences
Market Share
Market Share becomes a reflection
Of customer expectations
Customer expectations
Influence research
Research
generates
information Wisdom underpins
Culture
Strategic Partnerships

4. Page 4 of 4 © Copyright Adapting to Change
Walter.deruyter@unitingagedcare.org.au ph 0417419238
Knowledge, Brand and Market Share:- The above cognitive map2
, describes how
knowledge sits within the governance framework of organisations. Developing flexible
organisational structures that are aligned with the emerging paradigm of the knowledge
economy will safe guard organisations in rapidly changing markets.
The cognitive map on knowledge is a visual support showing key markers that act as a
guide using information, knowledge and wisdom as a common thread that ties in the
essential elements of what makes a business successful. The purpose of these markers is
to facilitate the development of links between various projects and strategies that are
designed to enhance brand and market share.
Not unlike a puzzle each part is an essential element of the overall picture/business. From
this the various stakeholders within the business are able to identify what parts of the
puzzle in this cognitive map best reflects their role. Four elements that combine the
jigsaw pieces of the business, Sustain, Add Value, Establish the Business and develop
Strategic Partnerships, position the service for growth through networks. From this
stakeholders can create a narrative as to how their involvement contributes to the success
of the business.
Conclusion:- To give the business first mover advantage, innovation theory is grounded
on the belief that the ensuing knowledge can be controlled and traded and has become
fungible as described in the précis. Effective governance is the framework where
knowledge optimizes outcomes for the business both in achieving market share as
measured in brand penetration and profit. As to being competitive in a rapidly changing
environment; how do you balance risk through the entrepreneurship of developing new
markets?
“Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled”
3
Entrepreneurship as defined by Jon Burgestone in the above quote is at the high end of
being competitive and often associated with high risk. The key for competitive
organizations is to balance risk through the control of variation which is in sync with a
fluid and variable market. The outcome is the pendulum of risk management through
governance is in balance, whilst being competitive through the effective management of
organizational knowledge. This approach frees up managers to focus on high order
practice enhancing brand and adding further value to the business.
2
Cognitive maps (also known as mental maps, mind maps, cognitive models, or mental models)
3
Jon Burgstone; http://www.inc.com/author/jon-burgstone Breakthrough Entrepreneurship