November 18, 2011

Thoughts on World Class Organisation – Capability to Adapt

The third dimension of our model looks at an organization’s Capability to Adapt. To be successful and even stunningly successful at one moment in time is not difficult. But it is a lot harder to sustain it. Organizations that meet the challenges with the right responses have been seen to succeed. But faced by new challenges, too often the old successful patterns no longer work. Our literature review again shows that few of the existing models and frameworks have given adequate emphasis to this crucial aspect of world class companies. For example, in the McKinsey’s 7-S framework (structure, strategy, systems, shared values, skills, staff, and style) none of the criteria directly or indirectly specify the constant need to adapt; in Peters and Waterman’s search for excellence model (1982, pp.13-16) the eight attributes are detailed which they believed to have characterised the excellent and innovative companies. Again none is related to capability to adapt. EFQM’s Business Excellence Model has been criticized for not having measures on change management (McAdam & O'Neill 1999). Capability to adapt is a measure of organizational learning and organizational transformation – critical to the long term and sustainable success. It captures personnel training, technology upgrading as well as organizational structure and external supply chain change. We argue that such changes are essential for any organization that aspires to world class excellence.

Capability to adapt reflects the dynamic school of business excellence. Deep and rapid changes in management practices took place during the early 1980s. The changes were mainly spurred by the huge success of Japanese automotive and electronics industries. The concept of excellence here can be summarized as arising from strength in innovation, ability to change and a leadership that excels through both their values and their actions. Thriving on Chaos (Peters, 1987) was published only five years after his seminal book In Search of Excellence and analyzed the impact of uncertainty in the business environment requiring and increased capability for organizations to be able to adapt to such uncertainties. It is frequently stated that technology has an ever-increasing influence on every aspect of business and markets, and that customers continuously change their tastes and preferences. “Excellent firms don’t believe in excellence – only in constant improvement and constant change” (Peters, 1987). Soon after, Michael Hammer and James Champy published their book “Reengineering the Corporation” in 1993, which further supports the idea of adaptation and becoming a learning organization.


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