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CHANGING CULTURE IN A TIME OF ACCELERATING MARKET CHANGE

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INTERVIEW WITH VIJAY GOVINDARAJAN


Vijay Govindarajan is the Coxe Distinguished Professor at Dartmouth’s Tuck School of Business and a Marvin Bower Fellow at Harvard Business School. He is the author of “The Three Box Solution: A Strategy for Leading Innovation” (HBR Press, April 2016).

Today’s most innovative and successful companies are able to master three boxes, says innovation thought leader Vijay Govindarajan.

three-boxes

In the digital era, companies must get much better at Box 2. Escaping the traps of the past falls within the realm of corporate culture described by many leaders as the hardest part of digital business transformation.

Govindarajan shares ideas with TCS about developing a culture suited to an age of accelerated change.

TCS: Why is it so hard for leaders to escape the traps of the past, even in the digital business age when they are being urged along at high speed?

Vijay Govindarajan: If you cannot forget, you cannot create new things. Yet forgetting is so difficult. What you need to forget still has value today, but it will become a weakness in the future.

The U.S. automobile industry grew up in an era when mechanical engineering was a core competency. In the last couple of years, with autonomous vehicles and the sharing economy, the auto industry is transforming to prioritize computer science, artificial intelligence, and so on. For auto companies to forget that the core competency is mechanical engineering is very difficult, because today their executives still taste success. And today’s success is still based on mechanical engineering. Looking ahead, it is a future weakness.

TCS: What can leaders do to accelerate the pace of ‘culture change’ inside their companies?

Govindarajan: You have to be careful when defining the parts of the company where you want to change the culture. A wholesale change in culture is not needed in all companies. If you go back to the auto industry for a moment, what you want to change is the part of the organization that has to experiment and learn new things such as electric cars or driverless cars. In many instances, you want a selective approach.

TCS: Are there companies that stand out for executing quickly on culture in this digital age?

Govindarajan: The best way to do it is to create a dedicated team focused on bringing about a fundamentally different culture. GE is doing this. GE’s industrial businesses are not going away. But GE is trying to transform itself from an industrial company into an information company. So GE is launching this breakthrough business model based on the Industrial Internet (GE’s term for connected devices). That is a fundamentally different business model when compared to the core business. Therefore, they have created GE Digital where the culture is very different from GE’s core business.

The post CHANGING CULTURE IN A TIME OF ACCELERATING MARKET CHANGE appeared first on TCS Perspectives.


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