In the article Why Good Companies Go Bad, Donald Sull outlines why major change in large organizations is so difficult. Ironically in most cases the very elements that enabled the business to initially scale and succeed turn into what holds the company back. Sull refers to these forces as “Active Inertia”.
What holds back change (Active Inertia):
- Strategic Frames – Assumptions that shape how the org views the business
- Processes – How the organization gets things done
- Relationships – Ties to customers, employees, suppliers, etc.
- Values – Beliefs held by most in the organization
Examples of companies slow to change:
- Microsoft’s adoption of the Internet – The many established product lines (esp. MS Office) did not understand how the Internet would affect their businesses. Once they did they have been slow to accept the inevitable changes to their underlying business model. Finally the multi-year release cycle employed at MS prevented them from initially responding to the ever changing Internet release cycle.
- Palm’s acceptance of color screens & keyboards – The initial success of the original Palm Pilot (with it’s utterly simple b/w screen and Graffiti handwriting recognition) led Jeff Hawkin’s to ignore for years the benefits of color or the popularity of the Blackberry thumb-keyboard. While these were eventually implemented it was at the cost of much of their initial market share.
How to overcome Active Inertia:
As someone currently driving an initiative that breaks with the tried and true way of doing things, these articles really resonate with me. By employing some of Kotter’s approaches along with my own Emotional Intelligence I hope to turn out a success. I’ll let you know how it goes…
What to know more?
- Article: Why Good Companies Go Bad [$] (HBR Jul-Aug 1999)
- Article: Leading Change – Why Transformation Efforts Fail [$] (HBR Jan 2007)
- Article: Get Off the Dime! (Kotter & Cohen, HBS Working Knowledge)
- Article: Stuck in Gear – Why Managers Don’t Act (Sull, HBS Working Knowledge)