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The Change Masters: Innovations for Productivity in the American Corporation

Posted: 4 Nov 2009  

Rosabeth Moss Kanter

affiliation not provided to SSRN

Date Written: 1983

Abstract

Kanter, writing in 1983, argued that American business was facing an unfavorable economic and social environment and in dire need of an "American corporate Renaissance." World events were threatening America's competitive strengths and survival. Nonetheless, she finds in exemplary companies practices that lead to productive responses to change and serve as models for fostering innovation, which will provide America's competitive advantage. The tools to "save the American corporation" already exist; they just need to be used. The author defines a "change master" as someone who can manage change effectively; they understand the architecture and strategy of change and the importance of the organizational environment. To stay ahead of this changing environment, firms need to stimulate more innovation, enterprise, and initiative. They must place more emphasis and value on individuals, who - in the right circumstances - come up with innovations. Firms must investment in people and long-term profitability related to taking a lead in innovation. Innovation is defined broadly as "bringing any new, problem solving idea into use." In general, Kanter is more focused on innovation within organizations ("corporate entrepreneurs") than entrepreneurial startups. Innovation is supported by cultures of pride and change, and by an environment that gives people the power to innovate and put ideas into action. Kanter's fundamental distinction is between segmented and integrated organizations. Integrated organizations are highly innovative and change oriented; they are willing to move beyond received wisdom, combine ideas from diverse sources, and embrace change as an opportunity. Firms invest in people; individuals may initiate ideas, but teams carry them forward. Firms incentivize initiative, and success comes not from domination but flexibility. High-innovation companies are also exemplary in human-resource practices. Problems are seen as wholes, related to larger wholes, and challenges to established practices. Segmented organizations are "innovating-smoothering" and anti-change. They compartmentalize actions, events, and problems, and keep pieces and persons isolated; innovation is inhibited at every step of the solution-search process. Problems are seen as narrowly as possible and independent of context and connections to other problems. Past structures and procedures dominate the future. The organizations are likely to be large, segmented, and hierarchical. Nevertheless, four change patterns in less-innovating companies are identified. In such firms, there is a tension between desire for innovation and blocking it. Kanter presents her well-known ten "Rules for Stifling Change." Innovation, nonetheless, can sometimes occur in segmented organizations; but even then, innovations do not survive initial trials or become widely used. Three skills are needed to manage innovation in integrated environments: power skills; ability to manage problems associated with use of teams and employee participation; and understanding how change is designed and constructed. Needed power tools are supplies information, resources, and support. Supporting the circulation of power are open communication systems, network-forming arrangements, and decentralization of resources. Successful and flourishing corporations will master the art of change: creating a new climate encouraging new procedures and possibilities, anticipating and responding to external pressures, and being responsive to new ideas from inside the organization. The challenge for innovative companies is "energizing the grass roots," or to combining the necessity of routine jobs with the possibility of employees contributing to innovation. Needed for innovation is the development of a "parallel participative organization" within the formal hierarchy of a company. Innovation requires a corporate entrepreneur who knows how

Keywords: Employee participation, Organizational cultures, Entrepreneurial environment, Technology innovation, Organizational structures, Competitive advantages, Employee development, Corporate entrepreneurship, Human resource management, Teamwork, Flexible structures, Resource management, Organizational communication, Change strategies, Management theory, Organizational change, Firm integration, Innovation process

Suggested Citation

Kanter, Rosabeth Moss, The Change Masters: Innovations for Productivity in the American Corporation (1983). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship. Available at SSRN: https://ssrn.com/abstract=1496170

Rosabeth Moss Kanter (Contact Author)

affiliation not provided to SSRN

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