Strategic Renewal Research Articles

Lead and disrupt: how to solve the innovator's dilemma

Contents and Abstracts1Today's Innovation Puzzle chapter abstractIn the past few years we've seen a number of well-known firms fail or go bankrupt (e.g., Blockbuster, Kodak) and more failures are on the horizon (e.g., Sears). This book describes what it takes for leaders to succeed in the face of accelerating change. It describes how some leaders and their organizations have been able to compete successfully in mature technologies and markets and transform their organizations by exploring in new domains (e.g., Amazon, IBM) while others have been trapped by their own success. Although this perspective is based on a substantial body of empirical research, the material described here is highly applied and moves well beyond the typical exhortations offered in most books on leadership and change. 2Explore and Exploit chapter abstractThis chapter offers two simple frameworks (the congruence model and the success syndrome) that illustrate the power of organizational alignment in driving organizational performance. It also describes how the alignment needed for success in a mature business can make it difficult to succeed in the face of change and why successful organizations, faced with disruptive change, sometimes fail. We illustrate this dynamic with a story of organizational success (Amazon) and organizational failure (SAP). 3Achieving Balance with Innovation Streams chapter abstractWhy do successful organizations fail? This chapter uses rich descriptions of two old companies (Sears and the Ball Corporation) to show how some leaders are able to help their organizations evolve and adapt to disruptive innovation. We elaborate on the innovation streams framework introduced in chapter 1 to show how different types of change can require leaders to manage different types of alignments 4Six Innovation Stories chapter abstractUsing the frameworks developed in the first three chapters, here we provide a set of detailed examples for how ambidexterity can operate. We describe how the leaders of six different organizations (e.g., a newspaper, a manufacturing company, a high tech firm, etc.) were able to meet the challenge of disruptive change. Based on these insights we identify three essential elements necessary for leaders to design ambidextrous organizations, 5Getting It Right Versus Almost Right chapter abstractHere we expand on the insights from Chapter 4 and describe in detail a process that IBM uses to generate organic growth-the Emerging Business Opportunity (EBO) process-which enabled them to increase revenues by more than $15 billion during the period of 2000-2006. We also show how Cisco attempted and failed at a similar effort. 6What It Takes to Become Ambidextrous chapter abstractIn this chapter we identify four major elements associated with more versus less successful efforts at ambidexterity. These are practical guidelines that can be used to help managers think about how to apply these lessons in their own contexts. We focus here on the question of what needs to be done to design an ambidextrous organization. What are the elements that leaders need to consider when implementing ambidexterity? What are the cardinal sins to be avoided? 7Leaders (and Their Teams) as Linchpins chapter abstractWhereas the previous chapter focused on what needs to be done to implement an ambidextrous design, this chapter focuses on how leaders can do this. We provide examples of two leadership failures and three successes and, drawing on previous examples, conclude by suggesting five leadership principles that undergird the successful implementation of ambidexterity. 8Leading Change and Strategic Renewal chapter abstractIn this chapter we first provide some guidelines for managers to consider in determining whether ambidexterity is needed for organizational renewal. We then describe how the leaders of two organizations (IBM and Haier) successfully led organizational change and renewal that transformed their companies. Based on these, we conclude with six suggestions for leaders to consider when leading organizational renewal

Reshoring: a strategic renewal of luxury clothing supply chains

This paper contributes to the emerging literature on reshoring by taking a value-driven enquiry into the renewal of supply chain strategy. It enhances the understanding of the use of reshoring in generating the value demanded by a changing business model. An iconic British high-end clothing brand, Burberry, is the chosen case study to explore the recent move towards reshoring because its changes of leadership, business model and evolving supply chain strategy from 1997 to early 2016 provide a timely and pertinent context. Burberry has continued to realign its business towards a brand-led and customer-centric model along with restoring its corporate heritage and core brand values. The changes in Burberry’s business model triggered the need to renew and realign its supply chain strategy through consolidating and rebuilding manufacturing activities back in the UK, in order to support its brand repositioning as quintessentially British and the company’s refocus on heritage products. The increased managerial control in the supply chain together with the close proximity of design and manufacture enables the promise of quality and brand provenance to be fulfilled. The renewal of Burberry’s supply chain strategy has contributed to an increase in revenues and brand values. These findings suggest that the renewal of supply chain strategy through reshoring and increasing control in supply chain operations can enhance value and firm competitiveness.

Transforming SNCF’s business model through the evolution of participative innovation routine

Purpose Many barriers prevent firms from changing their business models. Inertia, as it accumulates over time, transforms into organizational routines that doom change; however, it can also be a source of organizational flexibility. How does a business model evolve in interaction with organizational routines? This paper aims to study the interactions between forms of participative innovation (PI) and existing business models. Design/methodology/approach The exploratory approach includes interviews, participant and non-participant observations and archive analysis. It adapts an existing framework, based on the notion of scripts, to the evolutionary dynamic of organizational routines at the French railway company SNCF. The analysis of a set of contextual elements clarifies events over time and interactions between PI and the company’s business model. Findings The empirical insights indicate how existing routines can help reinvent business models. Business model components evolve along the transformation phases of PI. The case reveals co-evolutionary dynamics: evolution of the organizational routine from bureaucratic suggestion, to structured innovation, to PI leads to the transformation of the business model from functionalist, to customer-centric, to open business model. Practical implications Firm managers can think more proactively about how to reinvent established business models by innovating their existing routines, according to the position and role of routines, shifting from sources of rigidity and inertia to levers for innovation and change. Originality/value The business model concept serves as a prism of analysis for organizational routines. Organizational routines are sources of flexibility, strategic renewal and business model reinvention.

Human capital and human resource management to achieve ambidextrous learning: A structural perspective

Organisational learning has become increasingly important for strategic renewal. Ambidextrous organisations are especially successful in the current environment, where firms are required to be efficient and adapt to change. Using a structural approach, this study discusses arguments about the nature of ambidexterity and identifies the kinds of human capital that better support specific learning types and HRM practices suited to these components of human capital. Results highlight learning differences between marketing and production units, as well as different HRM practices and human capital orientations. This study points out that human capital mediates between HRM practices and learning.

Stakeholder-Driven Strategic Renewal

<p>In an ever-changing global marketplace, organizations must adapt and renew to survive. To achieve such strategic renewal, however, organizations must overcome the inertial forces of existing competencies to evolve and develop new ones. Drawing on relational and behavioral theory, we describe how three aspects of stakeholder relationship management-employee alertness, openness to change, and knowledge exchange-both facilitate the exploration activities necessary for strategic renewal and avert the behavioral tendency toward strategic inertia. Our analysis of stakeholder-driven strategic renewal not only extends and elaborates the concept of stakeholder relationship management by making explicit its connections to strategic renewal, but it also highlights the importance of the proper fit between employee roles and dispositions in shaping the effectiveness of the managing for stakeholders approach.</p>

UCO Bank - Strategic Renewal

There have been plans to merge UCO Bank with larger banks owing to its poor performance for many years. There were leaders in the history who had not been committed. The inadequate governance of the bank has been responsible for some of the major lapses. Mr. Arun Kaul took strategic initiatives and systematically strengthened the functioning of the board. It enabled the bank to turnaround and report profits in challenging economic conditions. The Bank is not yet completely safe and probably need strengthening of its competencies to emerging challenges.

Service response to economic decline: Innovation actions for achieving strategic renewal

This paper develops process theory on how service firms deal with persistent economic decline and the practices they adopt to overcome it. It examines how a knowledge-based service activity — commercial archeology — attempts to overcome environmental constraints of increasing complexity and economic downturn, as it unfolded over an 8-year period. This longitudinal, multimethod field study illustrates how confronting an external crisis may actually lead surviving firms to attempt innovation actions, a critical factor in achieving organizational renewal. Findings suggest that the renewal ability of highly dynamic services hinges on which innovation activities firms select and adopt, whether they implement them effectively, and the consequences of such implementations. This article contributes to the development of theory about the role of organizational innovation in service adaptation by offering insight into the link between strategic renewal and innovation activities.

Strategic Renewal: A Theoretical Review

Strategic renewal has become a prominent theme in a variety of organisation and management research domains in recent years. It refers to the process that allows organisations to alter their path dependence and transform themselves by challenging the very ideas on which they are built. With contributions from an increasing range of theoretical perspectives and research contexts, the strategic renewal literature has become fragmented and lacks common definitions and conceptual clarity, which prevents cross-fertilisation and harms further development. This study systematically reviews the various literature streams on strategic renewal to provide a more integrative perspective. We identify three key tensions at the heart of strategic renewal research, namely preserving vs. creating, induced vs. autonomous, and co-alignment vs. co-creation. By exploring these three key tensions, we define strategic renewal’s conceptual core, identify gaps in the past literature, and provide guidance for future research.

Bringing Meaning In: The Relationship Between Strategic Renewal and Professional Identity

This one-year qualitative study at NatNews examines the relationship between strategic renewal and professional identity. Current research on strategic renewal is predominantly at the environmental...

Dynamics of dynamic capabilities - the case of public broadcasting

Our study highlights the internal dynamics of strategic renewal by exploring the functioning of dynamic capabilities during strategic renewal in a public organisation facing rapid changes in its environments. The analysis focuses on how the organisation's capacities to sense, seize, and reconfigure manifest themselves in the organisational context, and how they relate to each other. The empirical data was collected at the Finnish Broadcasting Company by means of a quantitative survey for all personnel. According to the results, the dynamic capabilities differ between the organisational sub-units, and the context affects the way they relate to change performance. In addition, the sensing capability seems to have an indirect effect on the organisation's change performance, mediated by the seizing and reconfiguring capabilities. Our study conceptually and empirically contributes to the young tradition of applying the dynamic capability view in the context of public organisations.

Effect of workplace innovation on organisational performance and sickness absence

Workplace innovation is an organisational capability, defined as a strategic renewal in organising and organisational behaviour. This capability may consist of four resources: strategic orientation, product-market improvement, flexible work and organising smarter. Workplace innovation is theoretically rooted in the resource-based view of the firm. Analysis of the NEWS 2008 survey shows that Dutch organisations are 'rather' active with workplace innovation, with profit organisations being more active than non-profit organisations. Social innovative organisations are mostly active with product-market improvement, while least with flexible work. Organisations being more active with workplace innovation more often report an improved organisational performance. Conversely, workplace innovation has no significant effect on sickness absence rates. The first conclusion is that the theoretical construct of workplace innovation is an appropriate measure for monitoring among organisations. The second conclusion is that the effect of workplace innovation on organisational performance is strongest if organisations are active on more than one resource simultaneously. Interventions in flexible work and organising smarter are assumed to be most promising, since these resources may realise a relatively substantial gain in the effect of organisational performance.

Bypassing managerial cognitive inertia: Innovation cognition in-the-making

TThe role managerial cognition plays in strategic renewal has been studied by prior literature. We build on this research but going beyond management, we examine cognition among non-managers (here:...

Przesłanki restrukturyzacji jako mechanizmu odnowy strategicznej publicznych szkół wyższych

One of the most pressing issues facing contemporary public higher education institutions is their need to adjust to the continuously changing conditions of the surrounding environment. Lack of integration of those institutions with the environment reduces their economic effectiveness. In the light of current legal regulations, this may eventually lead to their liquidation. The aim of this work is twofold: to identify the rationale for restructuring as a mechanism of the strategic renewal of public higher education institutions, and to present the reasoning to the authorities of those institutions. The article analyses sales results, which are established by examining the revenues and costs of academic and research activity as well as separate business activity. The article also looks at universities’ overall financial results. The circumstances for developing a recovery programme that will lead to financial balance in public higher education institutions are identified. Universities in Poland were the subject of the research, which covered their total financial and sales results stated in financial statements for the years 2007–2014. Analysis of the fundamental area of the universities’ functioning – academics and research – reveals that costs are too high and revenues too low. Without strict supervision of costs, implementation of a recovery programme may be executed in the majority of public higher education institutions in the future. This may be the result of the situation when the fundamental activity of those institutions (didactic activity mainly) is not balanced between revenues and expenses. The worsening financial situation of universities is forcing managing authorities to undertake corrective measures. Any further actions within this area will seek to designate reference values, which should be followed by actions to the benefit of a strategic renewal of public higher education institutions.

Success and failure in M&As: Is there a place for a paradigm change? Evidence from the Israeli hi-tech industry

: The consistent growth of mergers & acquisitions (M&As) activity around the world in the last decade, and the volume of capital involved in such transactions, stand in sharp contrast to the high failure rates evident in M&As. The inconsistency amongst empirical findings on M&A performance is based on a variety of settings and on different measurements investigated under the generic label ‘M&As’. This paper claims that we need to differentiate between general M&As and those involving technology firms acquisition. The combination of the drive, the dynamic process and the human capital capabilities which characterize the latter, is expected to result in a more successful result than was reported. Hi-tech innovative acquirers can benefit from buying small, start- up firms by adding valuable resources, increasing market power and initiating strategic renewal. It is proposed that in addition to the traditional critical success factors (CSFs) identified as the most influential variables on M&A performance, attention needs to be given to the acquired firms’ motivation to succeed and to the performance of start-ups in the hi-tech sector. Some unique variables in that configuration need to be researched, amongst them are: trust, readiness for change, commitment, knowledge transfer and preserved autonomy. By doing that an opportunity will be given to examine if the general research paradigm of M&As fits the hi-tech’s circumstances or if a separate one is needed to measure the merger performance of start-ups. It is assumed that the Israeli’s start-ups mergers represent a more successful case and that they will perform with more positive results. This paper presents a theoretical framework for investigating M&A performance in the hi-tech area through an interdisciplinary approach. The article is organized as follows: The first section outlines the various theoretical ideas and research done on M&As. The second part deals with some critical reviews that aim to explain the confusing data produced from that paradigm. Section three turns to the emerging area of the technological business environment highlighting the uniqueness of the Israeli start-up phenomena. The last section combines performance with hi-tech in order to provide new insights on the M&As processes for executives engaged in both planning and implementing M&A deals. The paper concludes with a short summary and practical recommendation for further research.

"Towards a Dynamic Capabilities Scale: Measuring Sensing, Seizing, and Transforming Capacities"

Dynamic capabilities (DC) are crucial for firms to achieve strategic renewal. Despite the growing number of empirical studies, no standard scale exists for measuring dynamic capabilities. This hamp...

Understanding the antenarratives of strategic renewal in a municipality context

Acknowledging the polyphonic role of narratives for implementation of organizational strategy, the present study concentrates on analyzing the antenarratives of strategic change in the context of a municipality organization. Through an extensive case study, with data from 26 interviews, and observation of almost 100 strategy workshops, the present study identified three main antenarratives, and 26 antenarratives, which impact on the organizational capacity to adapt and change its operations aligned with the strategy. In addition, researchers identified intentional discourses to manage the organizational renewal. This study contributes to the strategy as practice literature, by shedding light on the antenarratives of strategic change in a municipality organization and explaining how some intentional narratives are utilized to facilitate change.

Estilo de Liderança, Controle Gerencial e Inovação: Papel das Alavancas de Controle

Resumo Fundamentado nas lideranças transformacional e transacional (Bass, 2008) e no modelo de alavancas de controle de Simons (1995), este estudo explora o estilo de liderança como um antecedente da definição de uso do sistema de controle gerencial (SCG) e o papel de seus diferentes tipos de uso na inovação tecnológica. A pesquisa foi operacionalizada por meio de um levantamento com 164 empresas, e os dados foram tratados com emprego da técnica de modelagem de equações estruturais. A liderança transformacional foi comprovada como um antecedente do uso interativo do SCG e do sistema de crenças. Os sistemas de crenças, interativo e de restrições, influencia positivamente a inovação tecnológica. Significa que as empresas que buscam inovar em seus produtos e processos devem investir: (a) na comunicação de valores e nos objetivos relacionados à inovação; (b) em discussões que envolvam diferentes áreas e membros do negócio, considerando inclusive a possibilidade de interagir com agentes externos à empresa; e, ainda, (c) no estabelecimento de limites que especifiquem um campo de ação para os colaboradores, fornecendo foco e gerando condições para que as ações pretendidas sejam desenvolvidas. Esta pesquisa expande o conhecimento sobre SCG indicando suas formas de uso para promover a inovação e obter renovação estratégica.

Fostering strategic renewal: monetary incentives, merit-based promotions, and engagement in autonomous strategic action

Autonomous strategic actions (ASA) of an organization’s middle and lower-level members can be a powerful source of strategic renewal. Yet, we still know little about whether monetary incentives and promotion policies are effective means of fostering ASA. I therefore discuss and experimentally test the effects of such incentives on organizational members’ engagement in ASA. The evidence suggests that switching from seniority-based promotions to merit-based promotion practices enhances ASA. At the same time, it seems to lead to what some scholars have termed a “crowding-out” of autonomous motivation by extrinsic incentives. That is, for individuals who are autonomously motivated to engage in ASA, this motivation leads to higher ASA in a setting of seniority-based promotions than under merit-based promotions. Since autonomous motivation has been proposed to be particularly valuable for tasks requiring creativity and innovation, caution in the use of merit-based promotions thus seems advisable if individuals are autonomously motivated to engage in ASA. In contrast, switching from a flat salary system to a pay-for-performance system seems not to affect the role played by autonomous motivation for engagement in ASA; however, the effect of pay-for-performance in general on ASA seems to be marginal. Results thus suggest that when designing incentive schemes, practitioners are well-advised to consider that pay-for-performance and merit-based promotions do not have the same effects, and to take into account whether their middle managers are autonomously or extrinsically motivated to engage in ASA.

Perspectives on strategic internationalization: Developing capabilities for renewal

While strategic renewal has increasingly received interest from strategy scholars (Agarwal & Helfat, 2009; Baden-Fuller & Volberda, 1997; Capron & Mitchell, 2009; Crossan & Berdrow, 2003; Gulati & Puranam, 2009; Huff, Huff, & Thomas, 1992), its gains from internationalization are less understood. We draw on both internationalization and strategy literature to investigate what is known about ‘if’ and ‘how’ firms renew their capabilities through internationalization. We anticipate that the scope of internationalization has an inverted U-shape effect on the firm's ability to create alternatives for renewal, thus allowing for the development of renewal capabilities. Yet we also draw attention to the factors that may represent limitations of the role of internationalization for strategic renewal. Internationalization strategies related to location, timing and venture mode decisions are antecedents to capability renewal strategies, uncovered as linear vs. non-linear renewal paths.

Strategic Renewal in Times of Environmental Scarcity

While research on strategic renewal is burgeoning, little attention has been paid to the role of renewal in contexts marked by environmental scarcity. Drawing on the population ecology and strategic choice literatures, this paper theoretically explores firms' renewal journeys under distinct environmental scarcity situations, and discusses how managerial perceptions and interpretations shape their strategic renewal behaviors. The resulting conceptual framework refines prior co-evolutionary perspectives of strategic renewal by showing that the nature of firms' renewal activities varies with the type of environmental scarcity they face. Further, we argue that varying CEO perceptions and interpretations can cause firms within the same industry context to adopt entirely different renewal journeys. Our theoretical framework responds to prior calls for more rigorous theory-building regarding strategic renewal by integrating the population ecology and strategic choice perspectives.