Convergence and Upheaval: Managing the Unsteady Pace of Organizational Evolution

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Convergence and Upheaval Managing the Unsteady
Pace of Organizational Evolution

• BUAD 661, Fall 2004
• Peggy M Beranek, PhD

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What this chapter demonstrates how executives
hold together companies that go from periods of
incremental change, or convergence, punctuated by
discontinuous (or frame-breaking) changes
involving simultaneous and sharp shifts in
strategy, power, structure, and controls. Both
of these situations require sharply differing
management styles.
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The ideal good fit between external
opportunity, company strategy and internal
structure The challenge maintaining this
alignment in times of changing competitive
conditions
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Most Successful Firms
The most successful firms maintain a workable
equilibrium (convergence) for several years but
are still able to initiate and carry out sharp,
widespread changes (upheaval) when their
environments shift.
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Convergence Patterns

• Fine Tuning refining, creating specialized
  units, developing personnel, fostering
  commitments
• Incremental Adjustments accommodating minor
  shifts in the environment
• Incremental adjustments tend to be reactionary,
  fine tuning tends to be internally motivated
  changes

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Convergence
During the convergence phase organizations can
become complacent, structures and systems can
become so inter-linked that they only allow
compatible changes. When faced with environmental
threat they may not recognize the threat or the
response is heightened conformity to the status
quo.
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Frame Breaking Change

• Factors
• Industry discontinuities
• Product Life Cycle Shifts
• Internal Company dynamics

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Scope of Frame Breaking Change

• Reformed mission and core values
• Altered power and status
• Reorganization
• Revised interaction patterns
• New executives

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Pace of Change Reasons for Rapid change

• Synergy
• Pockets of resistance
• Pent up need for change
• Is inherently risky

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Organization Evolution Patterns
More effective firms take advantage of long
convergent periods, however, inaction in the face
of discontinuities may cause failure. Low
performing firms either do not reorient soon
enough or reorient all the time as they try to
find an effective alignment.
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Executive Leadership
During convergence management and maintenance can
be delegated to middle management, executive
leadership can be used to re-emphasize goals and
mission. During discontinuities require immediate
and total executive involvement in the
specialization of strategy, structure, people,
and organizational processes.
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When to Make the Move
We previously looked at (a few slides back) the
timing of the reorientation and the relative
success of the firm, Most companies do not start
the reorientation process until a crisis is
staring them in the face. This is many times
influenced by external stakeholders (stock
holders, suppliers, customers). The difference
between these reluctant reactors and the pioneers
is largely determined by executive leadership.
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Who Makes the Move
Most discontinuities are manages by executives
brought in from the outside, as was done in 80
of the cases studied. When this happened company
performance was significantly higher. When a
current CEO did head up the frame breaking
changes he/she made major changes in direct
reports, revitalizing the top team.