Summary by Kellee Mundy
Master of Accountancy Program
University of South Florida, Summer 2003
Change and Risk Management Main Page |
Strategy Main Page
In order for a company to survive, it must change. Change can be very disruptive and cause companies to fall apart. Therefore, companies should make major changes that are interspersed with smaller changes. This allows for companies to manage change using the dynamic stability approach.
The Problem with Change
Typically changes in the past have involved companies making changes that maximize the growth of the company or increase economic value as fast as they are able to. Companies have made changes and have only considered the short term effects of those changes. With the use of the dynamic stability approach the changes that are made can last over both the short term and long term.
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." (p. 76). Dynamic stability involves three objectives. These objectives are tinkering, kludging, and pacing.
Tinkering involves using what a company already has in their possession to try and make something new. This is less costly than if companies went outside the company to create something brand new.
Kludging is a form of tinkering but just on a larger scale. Kludging involves more parts that are needed to create the change and often times kludging can result in a new division for a company or a whole new business.
Pacing involves making changes at the right time. If a company has not made any recent changes, then they will need to make rapid changes to catch up. But a company that has been making many changes will need to slow down from their rapid changes to tinkering and kludging.
Four Operating Guidelines
In order to be successful in the tinkering and kludging process, four operating guidelines must be followed. The four operating guidelines are: reward shameless borrowing, appoint a chief memory officer, tinker and kludge internally first, and hire generalists.
Reward Shameless Borrowing
This guideline states that companies should try and use existing materials that they already have. They should only invent from scratch if it is the last possible solution. Inventing from scratch causes companies to waste “precious” resources that they could use elsewhere to better the company. This does not mean applying ideas in a "cookie-cutter" fashion, but instead to use what the Abrahamson refers to as "creative imitation" where the ideas are customized to fit the organization.
Appoint a Chief Memory Officer
Remembering what a company has done in the past can be used in the future to avoid making the same mistake again. Chief memory officers are asked to review past projects before a new project begins. Chief memory officers "help the organization undertake change without engendering unnecessary chaos, cynicism, or burnout (p. 79).
Tinker and Kludge Internally First
Companies that use external parts find that they have a harder time reconfiguring those parts to fit into their company. Therefore, companies should try and use their existing materials/parts that they already have on hand. Dynamic stability is easier to manage if companies tinker and kludge internally.
Hire Generalists
Generalists are people who have a general knowledge that can benefit a company. Generalists possess a wide range of ideas and techniques; thereby allowing them to be able to tinker and kludge. Any company that uses the dynamic stability approach will need to have generalists.
“Change has been with us forever, and it always will be, but the idea of change itself is changing” To combat chaos, cynicism and burnout, companies now need to fluctuate between big changes and smaller changes allowing for these changes to succeed using the change tools associated with the dynamic stability approach.
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