On March 2, 1999, Hewlett-Packard (HP) announced a plan to create a separate company, subsequently named Agilent Technologies, made up of HP’s businesses in test and measurement, semiconductor products, healthcare solutions, chemical analysis, and the related portions of HP laboratories. In developing the transformation strategy, Agilent president and CEO, Ned Barnholt, grappled with how to improve the efficiency and effectiveness of the new company while still maintaining the best portions of HP’s culture and practices.
Barnholt adopted HP’s values of innovation and contribution, trust and respect for individuals, and uncompromising integrity, but he added three new values: speed, focus, and accountability.
Barnholt also wanted to improve the company’s efficiency in terms of shared services. In mid-2001, the Agilent team faced a series of unexpected challenges. On April 5, 2001, Barnholt announced that business conditions had worsened further than previously expected. Barnholt wondered whether he and his team had gone too far in the organizational and cultural changes they had tried to implement.
He wondered whether his vision of speed, focus, and accountability would be compatible with HP’s legacy values and culture, and if so, how would he integrate the two (Agilent Technologies: Organizational Change (A), by Glenn R.
Carroll, William P. Barnett, Victoria Chang; Published at Stanford university on 21st September 2001). This conclusively proves that dynamic change is not without its pains and tribulations. Even Abrahamson seems to aware of that since he claims that dynamic stability allows change without fatal pain, which is a clear contradiction of the heading that states “Change without Pain”.
After evaluating tinkering and kludging we must now look at the pacing within the theory of dynamic stability. Abrahamson claims that most proponents of change management argue that you have to change as much as possible as quickly as you can to stay ahead of competition. He claims that this is not always the case since organizations have different needs for change. His theory is not unique in thinking that different pace of change is needed for different circumstances. Most companies change in reaction to events such as moves by the competition, shifts in technology, or new customer demands.
In fairly stable markets, “event pacing” is an effective way to deal with change. But successful companies in rapidly changing, intensely competitive industries take a different approach. They change proactively, through regular deadlines (Time Pacing: Competing in Markets That Won’t Stand Still, by Kathleen M. Eisenhardt and Shona L. Brown, published in March 1998 in the Harvard Business review). Kathy Eisenhardt of Stanford and Shona Brown of McKinsey have studied this alternative approach, which they call time pacing.
Like a metronome, time pacing creates a rhythm to which managers can synchronize the speed and intensity of their efforts. For example, 3M dictates that 25% of its revenues every year will come from new products, Netscape introduces a new product about every six months, and Intel adds a new fabrication facility to its operations approximately every nine months. Time pacing creates a relentless sense of urgency around meeting deadlines and concentrates people on a common set of goals. Its predictability also provides people with a sense of control in otherwise chaotic markets.
Although “time-pacing” is mostly used for product related issues, it can also be an effective change tool for organizations seeking to implement change. Companies that march to the rhythm of time pacing build momentum, and companies that effectively manage transitions sustain that momentum without missing important beats (Time Pacing: Competing in Markets That Won’t Stand Still, by Kathleen M. Eisenhardt and Shona L. Brown, published in March 1998 in the Harvard Business review). Again Abrahamson lists a champion of his theory, which is this time Lou Gersterner, the current CEO of IBM.
He claims that companies that have been changing rapidly must learn to shift down to tinkering and kludging. As has been said before this theory is valid unless the organization in question needs an immediate and drastic overhaul of its operations. However he is right in saying that companies sometimes must slow the change process and re-evaluate their position, i. e. they need to see whether the current rate of change within the organization is sustainable and that it does not endanger the organizations survival.
Abrahamson gives us four operating guidelines by which his dynamic stability change process has to adhere. They include the reward of shameless borrowing and the appointment of a chief memory officer. Abrahamson also believes that if dynamic stability is to succeed, an organization must tinker and kludge internally first and also hire generalists. Firstly let us look at “shameless borrowing”. According to Abrahamson the first rule of dynamic stability is that companies must be willing to noodle with what already exists and to invent from scratch only as a last resort. This concept is quite valid.
The reason why it is valid is because it is always much better to use techniques that have already proven themselves over time in the real world. It is fine to come up with new theories as to what changes to make and as to which way to implement it. However in the end the new theories have no real concrete real-life evidence to support them, and hence they just remain that; unproven theories. And we all know that many things work in theory but not in practice, like for example communism. In the USA imitation is said to be a sign of weakness. However “shameless borrowing” is widespread in Europe.
There is clear evidence of general widespread change in European companies. Some of the key features include changes in Structure – decentralising, delayering and project forms of organising; Processes – investment in Information Technology (IT), horizontal and vertical communications, and new human resource practices; Boundaries – downscoping, outsourcing and strategic alliances (Organizing to improve company’s performance, written by Professor Andrew Pettigrew from Warwick Business published by Warwick Business School entitled: Hot Topics: Setting the Agenda (Volume 1, Number 5 February 1999)).
Hence Abrahamson makes a valid point that shameless borrowing is beneficial to an organization. The appointment of a chief memory officer seems to be more of a Human resource strategy. Any organization will always re-evaluate its position after changes in order to see whether progress had been made and all the goals achieved. The place where Abrahamson really strikes a chord is within his description of the third step of Dynamic Stability. Tinker and Kludge internally first! Dynamic stability is much easier to manage if you stay inside the organization. A prime example of this theory is Westpac.
As a part of its strategy to transform itself from a large Australian bank into a diversified international financial services group, Westpac hired outsiders to introduce new ideas and vitality. Unfortunately, existing employees did not welcome the newcomers and much of the hoped-for energy was dissipated in rivalries and resentment (Westpac’s great escape, by E. Carew, published in Business review Weekly, volume 19, number 34, 8th September 1997). This is a perfect example why all organizations should follow the dynamic stability lead and kludge and tinker internally first.
Employees are not as cynical towards change that is implemented internally as opposed to changes, which are brought about from the external environment. This find is the real strength of dynamic stability, and is the key to Abrahamson’s concept of change without pain. Finally Abrahamson claims that in order for dynamic stability to work one must hire generalists. The purpose of these generalists is to combine all the ideas from all the different areas of expertise. In short they are the ones who kludge and tinker with all the different components. Abrahamson seems to romanticise a bit here.
There is no real need for generalists as long as there is a clear viewpoint as what has to be changed, by whom and by when. Dynamic Stability’s key is to put internal sources to better use. Al employees within the organization should be generalists in one shape or form. Because the more multi-skilled the employees are the better and easier it is to kludge and tinker. To sum it up everyone should be a generalist, however there is no need for special recognition of generalists within the workplace. In conclusion dynamic stability is a different approach to change.
However change without pain is impossible. There will always be some friction whenever the word change is mentioned inside an organisation. As mentioned earlier Dynamic stability does have it short falls however it is a useful tool for organisations that need to pace their change and are not in a need of a drastic overhaul.
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