How dynamic capabilities change ordinary capabilities: Reconnecting attention control and problem‐solving

Abstract

AbstractResearch SummaryBuilding on the attention‐based view of the firm, we elaborate the concept of dynamic capabilities and identify two constitutive elements: attention control and problem‐solving. We show empirically that the control element of dynamic capabilities regulates how organizations (dis‐)engage attention on operational versus change‐oriented tasks. On this basis, we develop a process model of how control and problem‐solving interact to reconfigure resources and thus modify ordinary capabilities. We study the adoption of lean management in the R&D unit of a large U.S. corporation. Our longitudinal case study identifies obstacles that organizations have to overcome to establish effective dynamic capabilities that enable their adaptation to changing environmental circumstances.Managerial Summary“The vast majority of all change initiatives fail”: We hear this statement a lot in our interactions with practitioners. In this article, we suggest an explanation of why achieving persistent, behavioral change is hard: attention to change processes is difficult to maintain over an extended period of time. Initiatives start, then fade away. By studying the interplay of control mechanisms (that keep organizational attention on the long‐term goals) and problem‐solving tools (that identify what and how to change in the short term), we provide a framework that can generate actionable implications for executives. In particular, we focus on the decisive and yet underestimated role played by key performance indicators in sustaining attention on change initiatives.