Most businesses fail due to internal reasons like excessive debt or failure to change, rather than external factors. A common element of failed businesses is that they did not operate as an open organization. An open organization continuously imports information from its environment, uses it to design products/services that provide value to customers, and exports resulting products, services, and waste. Key elements of an open organization include a culture that shares information openly, diverse employees with a variety of experiences, and systems that support innovative behavior and equal access to information. While being open enables learning and adaptation, organizations must also innovate rather than just adapt and avoid becoming too reactive to avoid failure over time.
Succession “Losers”: What Happens to Executives Passed Over for the CEO Job?
By David F. Larcker, Stephen A. Miles, and Brian Tayan
Stanford Closer Look Series
Overview:
Shareholders pay considerable attention to the choice of executive selected as the new CEO whenever a change in leadership takes place. However, without an inside look at the leading candidates to assume the CEO role, it is difficult for shareholders to tell whether the board has made the correct choice. In this Closer Look, we examine CEO succession events among the largest 100 companies over a ten-year period to determine what happens to the executives who were not selected (i.e., the “succession losers”) and how they perform relative to those who were selected (the “succession winners”).
We ask:
• Are the executives selected for the CEO role really better than those passed over?
• What are the implications for understanding the labor market for executive talent?
• Are differences in performance due to operating conditions or quality of available talent?
• Are boards better at identifying CEO talent than other research generally suggests?
By David F. Larcker and Brian Tayan, Stanford Research Spotlight Series, September 1, 2016
This Research Spotlight provides a summary of the academic literature on the influence that CEOs have on company outcomes (performance and risk). It reviews the evidence of:
• The contribution of the CEO to overall company performance
• The relation between previous managerial experience and future performance
• The relation between personal attributes and performance
• The relation between personality and performance
• Factors that might influence risk tolerance
This Research Spotlight expands upon issues introduced in the Quick Guide “CEO Succession Planning.”
Succession “Losers”: What Happens to Executives Passed Over for the CEO Job?
By David F. Larcker, Stephen A. Miles, and Brian Tayan
Stanford Closer Look Series
Overview:
Shareholders pay considerable attention to the choice of executive selected as the new CEO whenever a change in leadership takes place. However, without an inside look at the leading candidates to assume the CEO role, it is difficult for shareholders to tell whether the board has made the correct choice. In this Closer Look, we examine CEO succession events among the largest 100 companies over a ten-year period to determine what happens to the executives who were not selected (i.e., the “succession losers”) and how they perform relative to those who were selected (the “succession winners”).
We ask:
• Are the executives selected for the CEO role really better than those passed over?
• What are the implications for understanding the labor market for executive talent?
• Are differences in performance due to operating conditions or quality of available talent?
• Are boards better at identifying CEO talent than other research generally suggests?
By David F. Larcker and Brian Tayan, Stanford Research Spotlight Series, September 1, 2016
This Research Spotlight provides a summary of the academic literature on the influence that CEOs have on company outcomes (performance and risk). It reviews the evidence of:
• The contribution of the CEO to overall company performance
• The relation between previous managerial experience and future performance
• The relation between personal attributes and performance
• The relation between personality and performance
• Factors that might influence risk tolerance
This Research Spotlight expands upon issues introduced in the Quick Guide “CEO Succession Planning.”
Business Impacts of Flexibility: An Imperative for Expansion draws on internal organizational research and information from 28 American firms, providing evidence that employers can gain tremendous benefit from providing flexibility in when and how work gets done. Study published in 2005 by Corporate Voices for Working Families and WFD Consulting.
Top HR Processes Ripe for a Social EnterpriseKangoGift
Todd Horton from KangoGift shares a few HR best practices for organizations thinking about embracing social HR tools. Presentation given as part of Monster's thought leadership webinar series.
Have You Heard About "Win Win Selection" !Nicole Payne
The importance of viewing the selection and interviewing process as a basic precursor to establishing trust and positive identification with a company's objectives. Using the LIFO Method, it illustrates how shared information between a candidate and company can provide a good first step towards building a mutually rewarding relationship for future OD efforts. Contact us for more info!
Realizado junto de mais de 7.000 líderes empresariais e de Recursos Humanos (RH) e em 130 países, o estudo Global Human Capital Trends 2016 da Deloitte é um dos maiores trabalhos de pesquisa realizado sobre os desafios da força de trabalho, da liderança e dos RH.
Too many modern-day employees describe their work as “soul crushing.” This often refers to
activities that may at one time have been, or could potentially be enjoyable and meaningful. Instead, they have
been rendered joyless. This feeling breaks employee spirit and drains people of a sense of accomplishment. This
type of work crushes motivation and enthusiasm
Embracing Open–Book Management to Fuel Employee Engagement and Corporate Sust...Kip Michael Kelly
When John Case and Jack Stack first introduced the concept of open-book management more than 30 years ago, the intent was to unleash the entrepreneur in every employee and to spur them—and their organizations—to better performance. Since then, countless organizations have opened their books and engaged their employees in understanding the critical numbers with positive results to their bottom lines. Although the original goals of open-book management were improved profitability and productivity, organizations have realized other benefits from the practice. These benefits include improved employee satisfaction, engagement, retention, motivation, innovation and corporate sustainability. This white paper: Examines open-book management and the benefits of applying its principles to improve employee satisfaction, engagement, retention, motivation, innovation and corporate sustainability.Explores how open-book management practices are well-suited to help achieve corporate sustainability goals. Outlines steps HR and talent management professionals can take to ensure the application of those practices in their own organizations.
The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important.
Business Impacts of Flexibility: An Imperative for Expansion draws on internal organizational research and information from 28 American firms, providing evidence that employers can gain tremendous benefit from providing flexibility in when and how work gets done. Study published in 2005 by Corporate Voices for Working Families and WFD Consulting.
Top HR Processes Ripe for a Social EnterpriseKangoGift
Todd Horton from KangoGift shares a few HR best practices for organizations thinking about embracing social HR tools. Presentation given as part of Monster's thought leadership webinar series.
Have You Heard About "Win Win Selection" !Nicole Payne
The importance of viewing the selection and interviewing process as a basic precursor to establishing trust and positive identification with a company's objectives. Using the LIFO Method, it illustrates how shared information between a candidate and company can provide a good first step towards building a mutually rewarding relationship for future OD efforts. Contact us for more info!
Realizado junto de mais de 7.000 líderes empresariais e de Recursos Humanos (RH) e em 130 países, o estudo Global Human Capital Trends 2016 da Deloitte é um dos maiores trabalhos de pesquisa realizado sobre os desafios da força de trabalho, da liderança e dos RH.
Too many modern-day employees describe their work as “soul crushing.” This often refers to
activities that may at one time have been, or could potentially be enjoyable and meaningful. Instead, they have
been rendered joyless. This feeling breaks employee spirit and drains people of a sense of accomplishment. This
type of work crushes motivation and enthusiasm
Embracing Open–Book Management to Fuel Employee Engagement and Corporate Sust...Kip Michael Kelly
When John Case and Jack Stack first introduced the concept of open-book management more than 30 years ago, the intent was to unleash the entrepreneur in every employee and to spur them—and their organizations—to better performance. Since then, countless organizations have opened their books and engaged their employees in understanding the critical numbers with positive results to their bottom lines. Although the original goals of open-book management were improved profitability and productivity, organizations have realized other benefits from the practice. These benefits include improved employee satisfaction, engagement, retention, motivation, innovation and corporate sustainability. This white paper: Examines open-book management and the benefits of applying its principles to improve employee satisfaction, engagement, retention, motivation, innovation and corporate sustainability.Explores how open-book management practices are well-suited to help achieve corporate sustainability goals. Outlines steps HR and talent management professionals can take to ensure the application of those practices in their own organizations.
The Closer Look series is a collection of short case studies through which we explore topics, issues, and controversies in corporate governance. In each study, we take a targeted look at a specific issue that is relevant to the current debate on governance and explain why it is so important.
The entrepreneurship, in today’s globalized economy, is linked with autonomy, venturing into new business, development of new products, pro-activeness, taking risks, innovation, strategic renewal, self-renewal, and competitive aggressiveness (Zahra and Garvis 1998). In this age of rapid developments in technology and the emerging global markets, the IT company has been able to utilize and develop its resources. The principles of corporate entrepreneurship are followed by prospering through the absorption of the pressures. It is a well known doctrine that the company’s performance is positively impacted by the involvement of corporate entrepreneurship (Wiklund 2009). The implication of this is by practicing entrepreneurship, the organizations would be successful in increasing the results that can be leading to the increase in GDP.
Read attachedpages about 3-M and their approach to innovationRes.docxmakdul
Read attachedpages about 3-M and their approach to innovation
Research one of 3M’s innovations.
Write a full two page paper in which you respond to the following questions:
1. How did the creative thinking process work in the development of this product? Describe what took place in each of the four steps.
2. Analyze what type of innovation this was—invention, extension, duplication, or synthesis. What characteristics of the innovation have led you to this conclusion?
3. Explain which of the sources of innovative ideas discussed in this week’s reading help account for this product’s success and why?
Include a minimum of two sources
The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship
Thus, 3M’s philosophy was born. Innovation is a numbers game: The more ideas, the better the chances for a successful innovation. In other words, to master innovation, companies must have a tolerance for failure. This philosophy has paid off for 3M. Antistatic videotape, trans- lucent dental braces, synthetic ligaments for knee surgery, heavy-duty reflective sheeting for construction signs, and, of course, Post-it notes are just some of the great innovations devel- oped by the organization. Overall, the company has a catalog of 60,000 products.40
Today, 3M follows a set of innovative rules that encourages employees to foster ideas. The key rules include the following:
•
Don’t kill a project. If an idea can’t find a home in one of 3M’s divisions, a staffer can devote 15 percent of his or her time to prove it is workable. For those who need seed money, as many as 90 Genesis grants of $50,000 are awarded each year.
• Tolerate failure. Encouraging plenty of experimentation and risk taking allows more chances for a new product hit. The goal: Divisions must derive 25 percent of sales from products introduced in the past five years. The target may be boosted to 30 percent in some cases.
• Keep divisions small. Division managers must know each staffer’s first name. When a division gets too big, perhaps reaching $250 million to $300 million in sales, it is split up.
• Motivate the champions. When a 3M employee has a product idea, he or she recruits an action team to develop it. Salaries and promotions are tied into the product’s progress. The champion has a chance to someday run his or her own product group or division.
• Stay close to the customer. Researchers, marketers, and managers visit with customers and routinely invite them to help brainstorm product ideas.
•
Share the wealth. Technology, wherever it is developed, belongs to everyone.41 3-4c structuring the Work environment
Structuring the Work environment
When establishing the drive to innovate in today’s corporations, one of the most critical steps is to invest heavily in an innovative environment. A top-level manager’s job is to create a work environment that is highly conducive to innovation and entrepreneurial behaviors. Within such an environment, each employee has the opport ...
Foundation of Organization Design (MGMT673)Reading Materia.docxericbrooks84875
Foundation of Organization Design
(MGMT673)
Reading Material
Professional Ethics
Humanistic Values
Organizational development (OD) practitioners traditionally encouraged having valued human beings, open communications, employment involvement, and personal growth. These values emerged at the end of World War II on both sides of the Atlantic. They were strengthened by early experiments in British coal mines and studies carried out in a plant in Illinois. These studies demonstrated that paying attention to workers improved productivity. Numerous studies that followed have demonstrated again and again that people do matter and are quite capable. When redesigning organizations, it is wise to use these early lessons as well as research performed by behavioral economists.
Helping Relationships
Helping can take on numerous forms and carries personal responsibility. The responsibilities for an OD consultant working on team building may be different from those of one working on organizational redesign, but they have many of the same issues with which to contend. Both can have a major impact not only on productivity and efficiency but on people’s lives as well.
As previously mentioned, organizational development practitioners are members of the helping profession and like the other helping professions, they have a professional code of ethics because their work has direct ethical implications on individuals, organizations, and society.
Ethical Dilemmas
Though having and following an ethical code can prevent problems, OD practitioners do encounter ethical dilemmas in their work. As with most ethical problems that emerge, individuals and organizations do not start out wanting to be unethical; they generally just slide into unethical behavior because they do not stop and reflect, or are in a big hurry to accomplish something or get specific results.
Value Conflict and Misplaced Interest
Not taking the time to adequately address value differences, taking shortcuts, misusing data, using coercion to save time or money, and misrepresenting skills or knowledge are major causes of ethical misdeeds and corporate failures. Taking the time to be ethical is good business not only for the OD practitioner but for the entire organization
Organizational Diagnosis
Before taking action, it is necessary to understand the situation. Organizational diagnosis is the process the consultant goes through to understand the current situation and includes the following:
· Determining an appropriate diagnostic strategy
· Gathering data through review of important organizational documents
· Developing an interview and research protocol
· Data gathering including conducting interviews
· Analysis of qualitative and quantitative data
· Assessment of information
· Discussing potential options with key organizational leaders and stakeholders to determine what is to be done and how to implement an intervention
An organizational diagnosis needs to be done before beginning.
Running Head BENCHMARK – CASE STUDY POTENTIAL RESOLUTIONS1BENC.docxtoddr4
Running Head: BENCHMARK – CASE STUDY POTENTIAL RESOLUTIONS 1
BENCHMARK – CASE STUDY POTENTIAL RESOLUTIONS 3
Benchmark - Case Study Potential Resolutions
In the current age of revolutionary change, an organization is as healthy as its sustainability prowess. Today’s company’s unlike past generations, operate in complicated and fast-paced regulated environment. There is an increased need to satisfy current stakeholders, safeguard future generations, and optimally use natural resources. It is in this breadth the Purple Cloud Company thirsts to speed up their product development, widen its market share, and seize new opportunities. The company’s sustainability strategy is acquisition and expansion as they aim to increase value above $100 million and increase the organizations stock price above $71.
Acquisition is a strategic measure implemented by the Purple Cloud Company as a corporate sustainability resolution. The company purchased ABC-Tech, and the acquisition allowed the parent company to intertwine its services with the acquired developed organization. The purchase yielded goodwill for the company’s stakeholders, provided a competitive edge, and reflected positively on the organizations financial bottom line. By acquiring ABC-Tech, which is a company that offers a simple technology platform, allows the organization to reduce customer support costs from $7,000 to $6,000, increase ABC-Tech revenue from $24 million to $48 million, increase revenue from $70 million to $100 million, and increases the profitability index from 17.2% to 18.7% market share, this will attract talent, and drive innovation. (Spears, 2012).
Additionally, the Purple Cloud organization should deploy an expansion strategy. This step will expand their market share, especially if the home market is saturated by their products. This is an inevitable venture given the prospect of it promoting access to new territories that will boost sales volume, allow diversification thus reducing risk exposure, facilitate access to better talent pools, build strong public relations, bring forth a competitive advantage, and most importantly provide opportunities for direct foreign investment.
Management Theories
Today’s organizations are comprised of individuals who manage the employee pool based on the science of humanistic approaches, which has evolved from the authoritarian mindset of the past generation. Purple Cloud has benefited from various visionary methods of operating sustainable companies commonly referred to as, management theories. A primary management theory is classical theory. The use of data and measurements allows the Purple Cloud management team to observe and evaluate business functions in numerical terms. The quantitative focus on the operations, and the production of services allows the company to achieve informed decision-making, and effective profitability.
Domestically, the company has a larger market share, and this motivates the organization to locate emerg.
This is a presentation focussing on specific aspects of "new work" / "the future of work", highlighting very interesting aspects in connection with potential new approaches to e.g. performance management, self management, autonomous decision making, finance and budget allocation and the necessary business transformation for this to make happen.
MSLGROUP Reputation Impact Indicator Study 2015 (China Edition)MSL
In the Age of Earned Trust, companies need a holistic approach to build a strong reputation that can facilitate success over time. The MSLGROUP Reputation Impact Indicator Study China edition highlights the China findings and provides insight into what drives the views held by the general public of some of the world’s best-known global corporate brands.
We hope you enjoy reading it and invite you to share your feedback and tips with us on Twitter @msl_group.
Follow #ReputationImpact on Twitter for insights from the report.
A social business is an organization whose culture and systems encourage networks of people to create business value. Social businesses connect individuals, so they can rapidly share information, knowledge and ideas by having conversations and publishing informal content. They analyze social content from multiple channels and sources, in addition to structured data, to gain insights from both external and internal stakeholders. When those things happen, innovation and business execution rates increase, better decisions are made, and customers and employees are more engaged and satisfied. Social businesses enjoy lower operating costs, faster speed-to-market, improved customer and employee engagement, and increased profitability.
Introducing Social Employee Engagement: Shifting From Technology To PeopleMSL
Social employee engagement puts people at the centre by focusing on what inspires and
engages them to do their best work. This report offers a complete introduction to social business and sets out a roadmap for success.
Future of work: Self-management, business purpose and employee engagementCoincidencity
The future of work means a lot of things to a lot of people. But maybe, instead of talking about technologies or innovation, the future of work could be about establishing more engaged, humane, soulful, purposeful organisation... if so, how do you get there?
Creating a Culture of Operational Discipline that leads to Operational Excell...Wilson Perumal and Company
As the world becomes more complex, the best companies and leaders are beginning to realize that improving culture is their greatest lever for achieving Operational Excellence. Complex systems require a different kind of culture—one with a specific set of guiding principles. In order to instill these principles in your organization, it is necessary to learn what the current culture is and what people think it ought to be like, establish the guiding principles necessary to be successful, align them to every level of the organization, and develop and sustain them through committed leadership and integration into key management system processes.
Wilson Perumal & Company has a long track record of helping companies in all industries transform their cultures and dramatically improve operational results. In this Vantage Point, we will share the most important lessons we have learned through our research and experience working directly with High-Reliability Organizations (HROs) and our clients as they pursue Operational Excellence.
Creating a Culture of Operational Discipline that leads to Operational Excell...Christopher Seifert
As the world becomes more complex, the best companies and leaders are beginning to realize that improving culture is their greatest lever for achieving Operational Excellence. Complex systems require a different kind of culture—one with a specific set of guiding principles. In order to instill these principles in your organization, it is necessary to learn what the current culture is and what people think it ought to be like, establish the guiding principles necessary to be successful, align them to every level of the organization, and develop and sustain them through committed leadership and integration into key management system processes.
Wilson Perumal & Company has a long track record of helping companies in all industries transform their cultures and dramatically improve operational results. In this Vantage Point, we will share the most important lessons we have learned through our research and experience working directly with High-Reliability Organizations (HROs) and our clients as they pursue Operational Excellence.
Test 4 Study Guide-What does a spreadsheet consist ofA groupi.docxmattinsonjanel
Test 4 Study Guide
-What does a spreadsheet consist of?
A grouping of text and numbers in a rectangular grid or table
-What is a label?
A label most often refers to a text entry such as a heading used to identify a column of data.
-What is the default alignment of a cell which begins with a label?
-Does the print command cause that portion of the current window visible on the screen to be printed unless changed in options?
- Can margins be set using inches and centimeters?
-Can you perform a series fill in any direction?
-Can functions have more than three arguments?
-How are absolute cell reference, and mixed cell reference identified?
-Can charts contain data from a completely separate spreadsheet?
-A chart most be recreated when values are changed?
-can scales on the vertical and horizontal axis be modified?
-is it mandatory that the arguments in an array formula be absolute value?
-How are DSUM and DCOUNT different from SUM and COUNT?
SUM-Function adds the values in a specified rang
COUNT-Function that tallies how many cells in specified range contain numbers or dates
DSUM-Returns the sum of the values in the summary column that meet specified criteria
DCOUNT-Returns the number of cells containing numbers that meet specified criteria
-Know the IF statement arguments
-Can the PMT only be used if the payments are the same?
-Can database be sorted in ascending or descending order?
-Does the worksheets have to have an identical layout in order for Consolidation using labels to work?
-Can other functions be used besides SUM when consolidating worksheets?
-Can the variables in a data table be changed once set up?
-
15: Organizational Culture and Innovation: living and working together
Social Media and Corporations: Don’t Cross the Line When You Go Online
When you think of “shameless self-promotion on Twitter”, what industry do you think of first? Whatever your choice, there’s a good chance it’s not Wall Street.
But it’s not for lack of wanting. Though investment banking has been slower than most industries to dive headfirst into self-promotion via Twitter and Facebook, many young professionals are eager to reach out to existing and potential customers using social media tools. But firms are cautious about how bankers represent themselves to a public wary of corporate hijinks and poor decision-making. Add to this a very complex regulatory environment surrounding how businesses in banking industry must monitor and store official communications, and you start to understand why Wall Street has been more tentative than most industries to get with the times.
“Who could blame any firm operating in a regulated industry for taking a cautious approach in the face of all that?” asks social media expert Kip Gregory, principal of The Gregory Group. “Especially in financial services, which is at its core an industry built around the management of risk. The question is: How do you, as a competitor in this business, choose to respond to a clearly shiftin ...
1. Designing The Open Organization
Introduction
Most people don’t realize that business organizations have short half-lives. Only 16 of the top 100 American corporations in 1917 still exist
today. Theaverage life expectancy ofa Fortune500firm isnow 40to 50years.
Firms fail to survive or remain independent for a multitude of different reasons. The business media frequently points out that non-surviving
firms moved into businesses they did not know, or a market leader failed to respond quickly enough to important cues in the marketplace.
Others argue that failure is often due to psychological pathologies or leadership failure within the top management team. A recent study by
Seton Hall’s Stillman School of Business and New York-based crisis management consulting firm Buccino and Associates, that involved
surveying 1,900 executives, concluded that businesses fail due to internal reasons, such as excessive debt, improper planning and failure to
change,asopposed to externalfactors like competitionandthe economy.
Thepost-mortem analysesvary,butoneelementtendsto underliemost business failures -they failedto operateasanopenorganization.
The Meaning of an Open Organization
The concept of viewing organizations as an open system was first popularized by the London-based Tavistock Institute. One of its
pioneering thought leaders, A.K. Rice, stated that any given organization takes various things from its environment, uses those
in some sort of conversion process, and then exports products, services, and waste materials which result from the conversion
process. One key import of the organization is the information that’s acquired from being “wired” with the environment - and
which is used to help the organization survive.
The concept of open systems is far from being new. Kenneth Boulding, the imminent social scientist, described our planet as an
open system decades ago. In the discipline of biology, open systems theory has been applied to the study of our environment and
earth’s ecosystems for years. On the corporate front, General Electric’s former CEO Jack Welch espoused a “boundarylessness”
organization with no internal barriers resulting from hierarchy, geography, and function, and forges a strong partnership with
customers and suppliers. Peter Senge, in his advocacy of the learning organization, underscores the importance of systems thinking
- which he argues involves looking at the whole instead of just the parts.
The concept of open systems also underlies many of today’s popular organizational renewal techniques, including total quality
management and Six Sigma improvement efforts . A firm that practices total quality management must continuously uncover and
anticipate customer expectations, and bring that information into the firm to design and deliver products/services that provide more
value to the customer than competitive offerings. That explains why 61 percent of the original criteria for the Baldridge Quality
Award were targeted toward the organization’s ability to use information relating to customers, employees, and business processes.
Page 1 | http://cenekcompany.com
2. How Does an Open Organization Operate?
As diagram 2 illustrates, the key design elements of all organizations include structure, systems, people, and culture. In an open
organization, these design features support open system principles. Diagram 3 gives a few key examples of design features that
further these principles.1
Key Elements of Organization Design
Diagram 2
Structure Culture
• Organization structure • Values
• Business processes • Norms
• Job design • Management philosophy
• Roles & responsibilities
Systems People
• Methods & procedures • Technical competencies
• Company policies • Behavioral competencies
• Human resource management systems • Leadership competencies
• Information systems
• Technology
• Product & service development/delivery systems
1
Key Elements of Organization Design diagram has been adapted from Nadler & Tushman’s congruence model. Nadler, D. & Tushman, M. “A Congruence
Model for Diagnosing Organizational Behavior.” Approaches to Managing Organizational Behavior: Models, Readings, and Cases. Boston: Little, Brown,
1981.
Page 2 | http://cenekcompany.com
PeoplePeople
SystemsSystems
StructureStructure
CultureCulture Products /
Services
Products /
ServicesStrategyStrategy
3. Key Organization Design Features in an Open Organization
Diagram 3
Culture ♦ Employees are business partners
♦ High levels of egalitarianism exist
♦ Information openly shared among all people
♦ “Messengers are not shot; controversial views welcomed
♦ Expertise and quality of ideas more important than rank
♦ Paternalism taboo; performance over tenure
♦ Company preoccupied with business growth
People ♦ Employees have a diverse set of work experiences
♦ Key competencies: intellectual curiosity, innovativeness,
♦ Leaders are developed to facilitate change; to be anticipatory
♦ Employees know the business, marketplace, and competitors
♦ Moderate amount of turnover considered healthy
♦ Diverse workforce and cadre of leadership
Structure ♦ Lean (but not anorexic)
♦ Wide span of control by members of management
♦ Few levels (enables information to move more quickly)
♦ Key, macro business processes identified and streamlined
♦ People decentralized; paper centralized
♦ Organization design is product or market focused.
Systems ♦ Performance management and rewards support innovative behavior.
♦ HR management practices strategic in orientation
♦ Active leadership development process
♦ Active, comprehensive training and education process
♦ Strategic planning interactive, involving many stakeholders
♦ Information system open. Equal access to information.
♦ Mechanisms exist for customer and employee feedback.
♦ Employee communications accent business news and trends.
♦ Benchmarking and the use of industry “best practices” common.
Page 3 | http://cenekcompany.com
4. The Key Byproduct of anOpenOrganization: TheAbility toCreate Information
Information is a necessary ingredient for learning, innovation, and adaptation – ultimately survival of the firm. None of these
activities can occur unless employees receive and synthesize the rich cues that are presented through the speech, words, and the
constant stimuli they receive from inside and outside the corporation.
Peter Drucker stated nearly a decade ago that we are entering “the knowledge society” in which the basic economic resource is
knowledge. He said:
“The single greatest challenge facing managers in the developed countries of the world is to raise the productivity of
knowledge and service workers. This challenge, which will dominate the management agenda for the next several decades, will
ultimately determine the competitive performance of companies. Even more important, it will determine the very fabric of
society and the quality of life in every industrialized nation.”
The key point made by Drucker is that knowledge can not be generated without information. And, the most innovative and nimble
companies will increasingly be those who have the ability to acquire, synthesize, and analyze information more rapidly than their
competitors.
Information can be obtained through external collection or through the internal development of ideas. Collecting information
externally (about customers, the marketplace, etc.) can only happen if employees cross their firm’s boundaries and interact with the
outside world on a continuous basis. Generating internal information occurs within the organization and through such activities as
analyzing the results of previous actions, sharing “best practices” across divisions, and building feedback loops into key programs
and processes. Open organizations are highly adept at linking external and internal information.
A large amount of information should be generated - in fact, to the point of redundancy. As Nonanka states:
“Sharing extra information also helps individuals understand where they stand in the organization, which in turn functions to
control the direction of individual thinking and action. Individuals are not unconnected but loosely coupled with each other,
and take meaningful positions in the whole organizational context. Thus redundancy of information provides the organization
with a self-control mechanism to keep it heading in a certain direction.”
Generating lots of information is important, but that’s not enough. An organization must have the ability to take a large amount of
ambiguous information and apply it in a manner that results in learning. Organizations that are skilled in this regard are called
learning organizations. They continually improve by rapidly creating and refining the capabilities needed for future success.
Page 4 | http://cenekcompany.com
5. The Danger in Becoming Too Open
Becoming an open organization entails some risks. They include:
Becoming Too Close to the Customer
Few woulddisagreethatsatisfying the customeris key to any company’ssurvival. However, the mantra to “get close to the customer,” can
notbepursuedinasimplistic orblindmanner. Afterall,notallcustomersknow whatthey want. Theirstated expectations maynotbetheir
actualexpectations. Somecustomers areso demanding thatitis notinthefirm’s best interests to attempt to satisfy theirwhims. According
to Macdonald,gettingtoo closemay limittheability to innovateorto movefast because gettingcloseinvolves moreintegrationofthe
customerandsupplier,with each beingless ableto make amajorchange withouttheparticipationoftheother.
Losing Predictability in How theOrganizationOperates
Stevensonofthe HarvardBusinessSchoolrecently lamented onhow organizationsarelosing their predictability. He states:
“The discontinuities that so many current management practices introduce into people’s lives many not drive them mad, but
they do encourage them to keep their resumes up to date and their commitments to their employers minimal.”
Maintaining thestatusquo is certainly nottheprescription,butsome organizationsandmanagers have to bemoresensitive to adoptingso
many different programsandactivities thatarenotalwaysintegratedinto oreven relevantto thefirm’smostpressing problems. Change
fatigueamong employeeshasto be avoidedatallcosts. Goldstein echoes thisaswell,arguingthatallorganizations must havesomedegree
ofdiscrete boundary with their environment,. This provides asafeholding environment fortheanxiety anddiscomfortoftenassociatedwith
change.
Adapting Rather than Innovating
Many successful companies,such as3MandSony,havebuilta work culturewhereemployees are keenly awareofindustry trendsand
shifting consumerpreferences. Thesefirmsoftenadapt to changes inthemarketplacethrough incrementalproductimprovements or
extensions to their basic entreeofservices. Moreimportantly,these companies anticipate unarticulated customerneeds by offering novel,
paradigm breakingnew products. 3M’s development ofthePost-it™andSony’sdevelopmentoftheWalkman™arekey examples.
Many theorists,includingGoldstein andSenge, have commented onhow organizationsmustpursuegenerativelearning andinnovation,as
opposed to merely adaptingto theenvironment. While few woulddisagreewith this argument, it’s importantto note thatno organization
canbeinnovative unlessit’salso open.
Theupshotisthatinbecominganopenorganization, therestill must bea certainamountofvigilanceinmakingsurethatthe organizationis
notjust reacting,oradapting to itsenvironment. Firms thatcontinually innovatewhenneededinevitably leadthe pack. Beingopen, but
reactive ratherthananticipatory,limits performanceinthemarketplace.
Some Final Thoughts
Theeerie parallelthatruns through the histories ofmany business failures ishow success becamethe seedoffailure.Aclose examinationwill
usually show thatoldsolutionscontinued to beappliedto new problems, orworse,customerexpectationschanged,buttheproducts and
servicesbeing deliveredto them remainedthesame. Therealfailureis thatthese firmsdidnotoperateasanopen system,andimportant
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6. cues wentunrecognized. Criticalinformationwas eitherconsciously orunconsciously ignored. Theendresult: market share andprofitability
suffered.
Thereisanincreasingamountofevidence thatfirmscanconsciously structureandmanage theirsurvivalby building aculture, organizational
structure, systems,andworkforce thatsupporttheprinciples ofopen systems. America’sbestcompaniesdo this -andso canothers.
References
Dixon, N. “A Practical Model for Organizational Learning.” Issues & Observations. Center for Creative Leadership, Vol. 15. No.2,
1995.
Drucker, P. “The New Productivity Challenge.” Harvard Business Review, Nov.-Dec., 1991
Goldstein, J. The Unshackled Organization. Portland: Productivity Press, 1994.
Gandosy, R. “The Need for Speed,” Journal of Business Strategy, Jan. – Feb. 2003
Hurley, R. and Laitamäki, J., “Total Quality Research: Integrating Markets and the Organization.” California Management Review,
Vol. 38, No. 1, Fall 1995.
Levinson, H. “Why the Behemoths Fell: Psychological Roots of Corporate Failure.” American Psychologist, May 1994.
Macdonald, S. “Too Close for Comfort?: The Pitfalls of Getting Close to the Customer.” California Management Review, Vol. 37, No.
4, Summer 1995.
Nonanka, I. and Takeuchi, H. The Knowledge Creating Company. New York: Oxford University Press, 1995.
Rice, A.K. The Enterprise and Its Environment. London: Tavistock Publications, 1963.
Senge, P. The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday, 1990.
Stevenson, H. and Moldoveanu, M. “The Power of Predictability.” Harvard Business Review, July/August 1995.
Wick, C. and Leon, L. “From Ideas to Action: Creating a Learning Organization.” Human Resource Management. Vol. 34, No. 2,
Summer 1995.
Page 6 | http://cenekcompany.com
7. cues wentunrecognized. Criticalinformationwas eitherconsciously orunconsciously ignored. Theendresult: market share andprofitability
suffered.
Thereisanincreasingamountofevidence thatfirmscanconsciously structureandmanage theirsurvivalby building aculture, organizational
structure, systems,andworkforce thatsupporttheprinciples ofopen systems. America’sbestcompaniesdo this -andso canothers.
References
Dixon, N. “A Practical Model for Organizational Learning.” Issues & Observations. Center for Creative Leadership, Vol. 15. No.2,
1995.
Drucker, P. “The New Productivity Challenge.” Harvard Business Review, Nov.-Dec., 1991
Goldstein, J. The Unshackled Organization. Portland: Productivity Press, 1994.
Gandosy, R. “The Need for Speed,” Journal of Business Strategy, Jan. – Feb. 2003
Hurley, R. and Laitamäki, J., “Total Quality Research: Integrating Markets and the Organization.” California Management Review,
Vol. 38, No. 1, Fall 1995.
Levinson, H. “Why the Behemoths Fell: Psychological Roots of Corporate Failure.” American Psychologist, May 1994.
Macdonald, S. “Too Close for Comfort?: The Pitfalls of Getting Close to the Customer.” California Management Review, Vol. 37, No.
4, Summer 1995.
Nonanka, I. and Takeuchi, H. The Knowledge Creating Company. New York: Oxford University Press, 1995.
Rice, A.K. The Enterprise and Its Environment. London: Tavistock Publications, 1963.
Senge, P. The Fifth Discipline: The Art and Practice of the Learning Organization. New York: Doubleday, 1990.
Stevenson, H. and Moldoveanu, M. “The Power of Predictability.” Harvard Business Review, July/August 1995.
Wick, C. and Leon, L. “From Ideas to Action: Creating a Learning Organization.” Human Resource Management. Vol. 34, No. 2,
Summer 1995.
Page 6 | http://cenekcompany.com