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Cracking the Code of Transformation

Research has shown that all corporate transformations can be compared along six dimensions.

Comparing theories of change
Our research has shown that all corporate transformations can be compared along the six dimensions shown here. The table outlines the differences between the E and O archetypes and illustrates what an integrated approach might look like.

Dimensions of change Theory E Theory O Theories E and O combined
 
Goals Maximize shareholder value Develop organizational capabilities Explicitly embrace the paradox between economic value and organizational capability
 
Leadership Manage change from the top down Encourage participation from the bottom up Set direction from the top and engage the people below
 
Focus Emphasize structure and systems Build up corporate culture: employees’ behavior and attitudes Focus simultaneously on the hard (structures and systems) and the soft (corporate culture)
 
Process Plan and establish programs Experiment and evolve
 
Plan for spontaneity
Reward system Motivate through financial incentives Motivate through commitment—use pay as fair exchange Use incentives to reinforce change but not to drive it
 
Use of consultants Consultants analyze problems and shape solutions Consultants support management in shaping their own solutions Consultants are expert resources who empower employees
 

This is an excerpt from HBR’s 10 Must Reads (On Change Management). Get your copy here.
Credit: Abhishek Singh

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