When should your organization adopt revolution and when should it adopt evolution?
The beginning of a new year is a good time to consider how we want to go forward. The past few years have see conservatism rule the roost; but is this still the right way?
"You say you want a revolution? Well, you know, we all want to change the world."
- "Revolution 1", The Beatles (The While Album), 1968
Revolution is appealing. The creative destruction it fosters keeps organizations on their toes. Revolution avoids complacency and creates confusion in the marketplace that can generate advantage. Most importantly revolution encourages fresh thinking and fresh innovation. But revolution also courts disaster. It disrupts people, processes, values and culture. And it's impossible to sustain.
Evolution on the other hand avoids all of these disruptions. It follows a well-trodden path that avoids fads and cul-de-sacs. It reduces risks and upheaval. And it allows companies time to assess the options and plan their actions accordingly. Yet evolution can easily degenerate into bureaucracy and complacency, and snuff out innovation.
So choosing the path that's right for you and your enterprise isn't obvious.
What arguments favour revolution? Revolution is the sudden and often momentous change in the way business is conducted or in the capabilities of a product. It's a discontinuous change that jumps from one generation to the next. In a revolution the transition takes place rapidly and wholeheartedly. It demands fresh thinking and innovation.
"You tell me it's the institution. Well, you know, you'd better free your mind instead."
Take the example of Kimberly-Clark. A classic revolutionary, the company transformed itself from a stodgy bulk-paper-making-also-ran to a glittering, focused innovator in consumer products.
Its revolution began in 1971, following the appointment of new CEO Darwin Smith. In previous years, the company's stock performance had fallen 36 percent behind the general market. Darwin Smith managed the jump to a new-generation S-curve (an S-curve shows how the sales volume of a newly introduced product changes over time) based on a revolutionary new tissue product - a consistent paper with good absorbency and high wet-strength - Kleenex.
Despite its attractions though, revolution has some serious shortcomings. It causes wholesale disruption that's difficult to withstand. Executives that try and create too big a revolution court disaster.
An example of the dark side of revolution is Enron. The company's single-handed creation of a competitive market in natural gas trading, and its later forays into power plan development, broadband telecommunications and online power trading, seemed at the time, like an exemplary blend of entrepreneurship backed by financial muscle.
As much as any company in the world, Enron appeared to institutionalize the capacity for perpetual revolution. The negative consequences for Enron are well known. Its senior officers created a capital structure that exposed the company to risks that were systematically hidden from shareholders.
The big lesson is that revolutionary results do not necessarily come from revolutionary processes.
What are the arguments for evolution? When compared to revolution, evolution seems to be for wimps. Evolutionary change means stepping from the current to the next generation in an incremental way and often over a period that may take years.
"You ask me for a contribution, well, you know, we're all doing what we can."
Eric Abrahamson, a management guru at New York's Columbia Business School, drew a comparison between business and social change. He pointed out that in 1968 a whole generation thought the only way they could have social change was with revolution. That proved not to be the case. The same is true for companies. Companies should aim for dynamic stability, rather than revolution. Change is so disruptive it can tear organizations apart.
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