Renewing Renewal

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Renewing Renewal

“We are living in an era where agility and adaptability win. Familiar routines and change processes adopted from management sciences are no longer valid. On the contrary, they create a deep mismatch between operations and available technologies,” says Professor Alf Rehn, Chair of Management and Organization at Åbo Akademi University in Finland.

Do you feel that anxiety, stress, and chaos are part of your normal day? Have you lost control? This means you are living on the edge, in a positive way. In a constantly changing world, technology has lost its place as the main force of renewal. Instead, globalization, ecological development, and interconnectivity within and of societies are simultaneously affecting our operations. As a result, all of us are confronted with a new kind of unmanageability and blurred target-setting.

From “Best of the best” to “Good enough”

Succeeding in the midst of unpleasant changes demands a new kind of mindset. Rehn continues: “More and more often, companies are confronted with unpleasant market and customer changes. Accepting this uncontrollability is essential in today’s world. After acceptance, the first step in the right direction is listening instead of talking.” Many traditional processes—such as benchmarking and best practices—are excellent in creating security and stability among organizations. They are formed around our defined professional identities and our pride in our professionalism. Unfortunately, expertise is a limiting concept when searching for a more adaptive approach to competitiveness and organizational renewal. “The best practices of today can be the worst practices of tomorrow. It is easy, comfortable, and safe to base your actions on history and your ideas about how things are done. What is easily forgotten is that the pace and multitude of changes today challenges the whole concept of expertise—all the time. Winners accept their limitations and try to find a good enough solution for the situation at hand. The 'good enough' works right now, but is ready to be replaced tomorrow if a better match is found. A little bit of self-irony helps a lot. In order to renew in an era of constant chaos, you need to realize that change is painful and messy.” What happens to the concept of quality in an age of 'good enough'? According to Rehn, many companies have been fooling themselves with quality moralism—thinking that non-premium quality means bad quality. In a 'good enough' world, customers choose and quality is no longer a given category, but a continuously negotiated positioning where various quality points can work.

From the value chain model to evolving value networks

The typical trait of a chaotic world is its multitude of problems—between customers and suppliers, functions, teams, and individuals. Such problems could be seen as monitoring channels for a constantly changing environment, and through that as a channel to tap into market signals. In this context, open interaction with customers and employees is a healthy and needed exercise. Rehn emphasizes that opening company interfaces towards customers and other stakeholders can accelerate the right kind of change. Such openness is a core feature of modern value thinking, where most value-adding partners are constantly renegotiated on the basis of the phase your own business is in. In contrast to the value chain model, which is founded on only supporting the company’s own focus, in value networks joint development and success is achieved by co-operation. Renegotiation of value partners has been especially successful among start-ups, which are ready to change their basic ways of operating rather than stick to a familiar but fading value network.

Are you ready to share your Legos?

Rehn believes that the coming change in generations will be a major force for renewal in the 21st century. “The younger generation does not see organizational boundaries as being that important. They are used to acting first and asking for permission only after that. Creating together is the most motivating and natural factor for them, which is why the companies that are willing to solve problems and change together with their customers will be the forerunners of the future.” A good way to start is to define the organizational interfaces to be opened for your stakeholders to create something new. Alf Rehn is a management professor, a strategic advisor, an author, a columnist, and a father of four children. He loves coffee and comic books. Alf is interested in questions related to change, culture, and concepts of the new, around which he has also built his career. Alf Rehn currently holds the Chair of Management and Organization at Åbo Akademi University in Finland. He was previously the SSES Professor of Innovation and Entrepreneurship at the Royal Institute of Technology in Stockholm, Sweden, and has also taught at universities around the world. The 2009 Thinkers 50, the listing of the world’s top 50 business thinkers, included him on their “Guru Radar”, ranking him number 13 among the “Up and Coming Business Thinkers”. He is also listed internationally as a Top Professor On Twitter. For more information visit: www.alfrehn.com. You can also follow Alf @alfrehn on Twitter. Editor: Sonja Vuorinen

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