Change Without Pain

1. By Eric Abrahamson Harvard Business Review July-August 2000 Change Without Pain Presented By Kristine Hass and Matt Schomer

2. Change Or Parish? • Dynamic Stability • Comparison of an atom bomb or negotiations to end a war. • Dynamic stability is equal to negotiations and will leave more survivors than casualties.

3. The Problem with Change. • Failure, (Finley Kumble) • New York based law firm that grew too fast and created failure. • Ultimately, the firms pace was too fast and wasn’t sustainable. • Success, (GE) • Knew when to slow down. • Through acquisitions was able to create a niche. • Using an organic approach changes seemed less disruptive.

4. Dynamic Stability “At its essence, dynamic stability is a process of continual but relatively small change efforts that involve the reconfiguration of existing practices and business models rather than the creation of new ones.” Three main factors to creating dynamic stability are tinkering, kludging and pace.

5. Tinkering • Compared to Mr. Fixit. • Industry masters of tinkering are 3M and Hewlett-Packard. • It’s the ability to make small modifications to an organization without disrupting too much. • Dow chemicals used tinkering when creating saran wrap. Originally, saran wrap was a protective industrial coating process. Marketing masters tinkered with the idea of making it a consumer good.

6. Kludging • Kludging is tinkering with a college education. • Generally, kludging is large scale and involves mergers or acquisitions. • Companies use kludging to expose particular functions, standard technologies or models. • Barnes & Noble. They used kludging when combining a brick and mortar business with a dotcom business.

7. Pacing • Every organization must change at its own rate. • Over ambitious attempts to change can seem overwhelming and create more problems. • Big and small problems must be handled at the right interval. • Lou Gerstner at IBM and formally at American Express Travel Related Services, is a master of pacing. He had a niche for knowing when to push and when to rest when change fatigue was showing. • Companies that have been changing rapidly must learn to shift down to tinkering and kludging.

8. Four Operating Guidelines • There is more change than just tinkering, kludging and pace. Organizations must follow the four operating guidelines as well. • Four operating guidelines • Reward Shameless Borrowing • Appoint a Chief Memory Officer • Tinker and Kludge Internally First • Hire Generalists

9. Reward Shameless Borrowing • Companies must be willing to noodle with what already exists. • General Motors, at one point feared using others ideas. This created a lot of lost assets due to the fact that they failed to borrow ideas. They tried to reinvent the wheel when designing vehicles. This lead to lost human and capital resources.

10. Appoint a Chief Memory Officer • Only by remembering the past my we avoid making the same mistakes. • Steve Jobs at Apple serves as more than just the CEO he is also the chief memory officer. His ability to remember what has and hasn’t worked in the past for Apple has accounted for several of their successes. History will repeat itself unless you react to the signs preemptively.

11. Tinker and Kludge Internally First • Making changes from within an organization simplifies the tasks of tinkering and kludging. • Southwest Airlines has successfully used internal kludges to make changes and allowed them to become the largest US based airlines.

12. Hire Generalists • Generalists are often derided as jacks-of-all-trades and masters of none. But their range of skills lets them combine disparate ideas, techniques, processes, and cultures. • Marty Homlish at Sony Playstation, went from job to job creating solutions for problems. As a generalist he was able to create painless change. The key ingredient in painless change is having a generalist there to suggest new ideals from a different prospective.