Thursday, February 9, 2012

Punctuate Equilibrium and organizational innovation

In the last blog we talked about the evolutionary model of organization and the sort of innovation that would accompany it. In today's blog we discuss how the organization's model of growth when modeled around the punctuated equilibrium would handle innovation. 

The punctuated equilibrium model proposes that organizations typically initiate a revolutionary structural change during periods of environmental turbulence. The general state of an organization would comprise of long periods of evolutionary change with certain short bursts of radical change. These short bursts of change could really transform the organizations strategy, structure, power distribution, control systems etc!

One could call the relatively stable period of growth as - "evolutionary periods" while the short radical changing periods as those of "revolutionary periods". 

Empirically it has been found that the organizations that were able to transform themselves drastically were able to perform better than those that transformed incrementally. But this study wasn’t comprehensive enough to allow us to understand the reason of the failed transitions. The implication of the concept is that the competitive environment repeatedly changes over time and the successful organizations accordingly have to initiate periodic discontinuous or revolutionary change to adapt to the environmental changes.  

The challenge here is that the organization would have to develop diverse competencies and capabilities to shape and deal with the technology cycle.

While this model explains the patterns of organizational evolution and relationship with the change well, the model fails to address the crucial question of how organizations create manifest into new forms during the revolutionary phases. It also doesn’t address the long terms survival prospects of the organization!

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