The renewal puzzle

Citation

Randall, R.M. (2008), "The renewal puzzle", Strategy & Leadership, Vol. 36 No. 3. https://doi.org/10.1108/sl.2008.26136caa.001

The renewal puzzle

Article Type: Editor's letter From: Strategy & Leadership, Volume 36, Issue 3.

The theme of this issue of Strategy & Leadership is how corporations renew their business, a perplexing topic. The articles include both an insightful overview of corporate renewal (let’s call it “advice on solving the puzzle”) and several provocative case studies (let’s call them “pieces of the puzzle”). The puzzle metaphor is apt because radical corporate change is a process nobody fully understands. Throughout the world only a few companies have survived for hundreds of years by reinventing themselves again and again. But in the modern era, many formidable companies can’t renew themselves even once, and when their attempts fail, are often quickly absorbed by more energetic newcomers. Historical studies of the Fortune 500 list of top US companies reveal that the life span of many major corporations is surprisingly short. So the puzzle is, why don’t more resource-rich organizations perpetuate themselves? Here are some intriguing clues:

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  In “Five ways to transform a business,” Osvald M. Bjelland and Robert Chapman Wood provide leaders with a unique guide to five transformation processes and hybrid forms for achieving major organizational change. Surprisingly, they extrapolate one thought-provoking process from Jim Collins’ Good to Great research. A set of simple questions provides leaders a first-cut sense of which method (or hybrid approach) is right for their organization.

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  In “Sun Ray’s struggle to overcome innovation trauma,” Jay Moldenhauer-Salazar and Liisa Välikangas dissect how Sun Microsystems launched Sun Ray, a low-cost network-based system that might have revolutionized desktop computing but instead struggled to catch hold with customers.

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  In “How El Al Airlines transformed its service strategy with employee participation,” Ram Herstein and Yoram Mitki recount El Al Airlines’ radical transformation of the firm’s offering, by providing a premium class service on all its routes. To rapidly ramp up this new customized personal service, El Al leaders obtained the employees’ full participation in the makeover process.

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  In “The Sears acquisition: a retrospective case study of value detection,” Joseph Calandro, Jr details how hedge fund managers gain a powerful advantage by using the Graham and Dodd valuation methodology when assessing acquisitions. This Sears case explains how insight from the valuation helps acquirers avoid paying too much, thus giving them more options when they undertake renewal.

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  In “The eight principles of strategic authenticity,” B. Joseph Pine II and James H. Gilmore uncover a new skill essential for continual corporate renewal, managing the delivery of authentic offerings.

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  In “Gary Hamel’s clarion call to radically rethink management,” a review of The Future of Management, Brian Leavy explains how Hamel proposes to instigate a remake of modern management that would transform the corporate world.

Obviously, corporate renewal is the ultimate leadership quest, and I look forward to reading your reactions, via e-mail, to the advice offered in these articles (RRandallPublish@cs.com).

At the close of each issue I like to review its contributor statistics. This time they are: corporate executives, 2; academics, 5; consultants, 6. Not a bad mix.

Good reading,

Robert M. Randall Editor