by Henrich Greve

During organisational change, play the radicals against the moderates to foster collaboration.

Many firms that emerge or grow by making technological breakthroughs owe a lot – maybe everything – to their engineers, and in return give them benefits both formal (organisational power) and informal (status and gratitude). These days, however, innovations are metabolised quickly. As their technology’s wow factor fades, firms tend to shift their emphasis from engineering derring-do to improving market performance. Engineers don’t know how to do that; the marketing department does. So can firms really divert authority and prestige away from the source of their success and into a new path to success? Often the answer is no, as seen in firms applying technological innovations that ignored marketing challenges – such as Sony’s continued development of disc-based music players after flash media enabled firms to make compact players like the iPod.

But there are also successful cases, and a forthcoming article in Administrative Science Quarterly by Emily Truelove and Katherine Kellogg (of MIT Sloan School of Management) explains one mechanism. The authors followed an unnamed car-sharing company that made a strategic shift to marketing following a period of strong engineering success based on disruptive innovation. This was a classic case of a firm with a dominant engineering department that had proven track record of success and professional norms that were completely different from the rising stars in marketing. They had every opportunity to resist, which they did – until they suddenly started making compromises. What happened? Continue reading →