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Homepage / Publications & Opinion / Archive / Daily Telegraph: Harddrive![]() Be cruel to be kind How should businesses adapt to change? Peter Cochrane investigates SO far as I can tell there has not been a single recorded case of any company or organisation successfully transforming itself just by shuffling the pack of managers and people. Taking old mindsets and skills and asking people to do something radically different, in the same organisational framework, just does not work. People just cling on to the past, fearing the new, right up to the last minute. Over the past decade, the speed-up of the business world due to computer networks has been devastating for many old organisations. Banks, mining, steel, defence, finance houses, manufacturers, and consultants have found themselves struggling to invoke change fast enough. Many have found business transformation like trying to convert a Boeing 747 into an F16 fighter at 35,000ft mid-Atlantic. They are short of time, cold and exposed, with endless opportunities to get it wrong and crash. In most cases, being cruel to be kind seems to be the only strategy. A rapid, total close-down, or pulling people out altogether, and relocating, to start with a clean sheet, to create a new company or operation from ground zero, is far kinder in the long run. But this often involves creating and establishing a new brand. Bluntly, there are plenty of opportunities for getting it wrong by this route, too. So what can companies do to survive? Looking at the dotcom and not dotcom marques, it is clear that old and new do not mix easily. So one strategy is to transform existing business under the old flag, and create a new flag for new ventures. For the old business this means streamlining to combat the competition - using information technology to become more efficient. For example; one of the newest Fortune 500 companies electronically manages the travel accounts for over 20,000 global staff with only two people. Most organisations would have well over 100 people doing this, and such policing far outweighs the cost of any likely crimes. Another group found it difficult to sell the e-business concept because it was still processing millions of paper invoices. Practising what it preached was an essential, and saved it - and its customers - billions. Applying such thinking across organisations can see radical transformations and huge rewards. So, how can companies avoid sudden death? First, they need a technology and strategic radar - people who look in and out of their sector for potential predators. Second, it essential to focus on what the company does well and outsource as much as possible. Many aircraft and car producers do not manufacture, they assemble: they are system integrators. Their major value-add is in research and development, design and marketing. Do-it-all is an old philosophy born of an industrial revolution long gone. Third, it is essential to challenge the old processes: if they can be done electronically they are likely to be far more efficient. But merely placing paper processes on a screen is unlikely to see massive gains - information technology generally engenders a process change that is advantageous. Fourth, routes to market and customer relationships can be expanded exponentially via the Web. Finally, it is worth looking at the spin-off option to create new wealth-generators. If you try to do this inside the old company, the established bureaucracy is likely to foil you. It is about thinking and doing differently, because the technology is the enabler. Peter Cochrane holds the Collier Chair for the Public Understanding of Science & Technology at the University of Bristol. His home page is: |
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