Stuck: Why It's So Hard to Do New Things in Old Organizations
Rebecca M. Henderson, '81, Eastman Kodak LFM Professor of Management
Description: After 20 years studying large organizations that undertake significant transformations, Rebecca Henderson has of late turned her attention to the issue of sustainability, which may play a crucial role in society's response to climate change.
She believes the job of corporations goes beyond "making widgets effectively and making money for shareholders." After all, "doing lunch is to be preferred to being lunch," she says, and there's evidence that reducing waste and energy use, and managing supply chains sustainably can improve profitability. In addition, alternative energy sources offer "major growth opportunities" for firms -- "someone will make a lot of money if all that carbon gets taken out of the atmosphere," she says. And don't forget the positive impacts on a workforce inspired not just to make a profit, but to pursue a mission.
But this "emotional juice" is not enough if firms are to implement a strategy around sustainability. Henderson thinks it's possible to help companies embrace sustainability in the same way companies learn to get unstuck when mired in old behaviors. She describes companies overloaded with projects, incapable of making thoughtful decisions, finger pointing when things go wrong. She invokes the "Tiger Woods theory of change," in which the golf pro actively embraced "worse before better." Woods practiced a different stroke on his driver, performing poorly in competitions for two years, until he emerged with new, improved skills.
Companies looking to act in fundamentally different ways, says Henderson, must prepare for overload, accepting and managing the fact that the business will be "worse before better." Becoming unstuck, says Henderson, means, measuring capacity, tracking resources, finding time to step back and make decisions, demonstrating a commitment at all levels of the company, and having serious conversations, from the mind and from the heart. In sustainability, concludes Henderson, we "need to break the logjam between overload and strategy," and we "need to be very precise about what we want to do."
About the Speaker(s): Rebecca Henderson specializes in technology strategy. Her current research focuses upon the pharmaceutical and biotechnology industries. She received an undergraduate degree in Mechanical Engineering from MIT in 1981 and a doctorate in Business Economics from Harvard University in 1988. She spent 1981"1983 working for the London office of McKinsey and Company.
Her publications include "Underinvestment and Incompetence as Responses to Radical Innovation: Evidence from the Photolithographic Industry" in the Rand Journal of Economics, and "Architectural Innovation: The Reconfiguration of Existing Product Technologies and The Failure of Established Firms" with Kim Clark, in Administrative Science Quarterly.
Henderson sits on the Board of the Whitehead Institute for Biomedical Research and on the Board of the Linbeck Corporation. She was recently retained by the Department of Justice as an Expert Witness in connection with the Remedies phase of the Microsoft case, and in 2001 was voted "Teacher of the Year" at the Sloan School.
Host(s): Vice President Resource Development, Industrial Liaison Program
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