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Adapting to Change
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local markets. Variation f...
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Copyright - Walter de Ruyt...
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Adapting to Change 18-3-12 WdR revised 11-5-12

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Adapting to Change 18-3-12 WdR revised 11-5-12

  1. 1. Page 1 of 4 © Copyright Adapting to Change 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't+broke,+don't+fix+it
  2. 2. Page 2 of 4 © Copyright Adapting to Change 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) 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. 3. Page 3 of 4 © Copyright Adapting to Change 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. 4. Page 4 of 4 © Copyright Adapting to Change 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; Breakthrough Entrepreneurship