Firms that want significant growth and innovation will find that organizational transformation is an essential element in executing their strategies. Without this large scale change the factors which have been limiting growth and innovation will persist. Acting to promote growth and innovation without organizational transformation is the embodiment of the popular definition of insanity:
Insanity is doing the same things over and over while expecting a different result.
Organizational transformation is required to alter the organizational context and culture. To better understand the word context, think of it as assumptions, beliefs, and experiences which, while in the background, actively shape how a person perceives events and phenomenon as they occur. While we are largely unaware of our contexts, these contexts shape our experiences, perceptions and thinking. As an example, if you are in a business conversation, the term leadership will be shaped by your experiences in business as well as how the organizations with which you are engaged use the word leadership.
Context occurs in language. The context in which words are used clearly shapes the meaning of that word as well as the sentence in which it is used. Consider, for example, how the word beauty takes on very different meanings given the specific context. “Beauty” can be used to describe an attractive woman as well as “beauty products”. However, the same word (beauty) can be used to describe a physical injury to the eye (as expressed by “that shiner’s a real beauty”), and many physical objects such as an auto, classic sailboat, etc. Same word, but very different meanings given the context in which the word is used.
Growth and Innovation are two words with intense meaning in business. Growth is directly related to value creation, which is why businesses exist. Shareholders punish and reward executive and management teams based on growth achieved and sustained. Some management’s attempt to achieve short term growth through a combination of acquisitions, cost cutting and financial engineering. However, for long term sustained growth the organization must demonstrate organic growth, which is based in part on innovation. Organic growth and innovation require organizational transformation. Organizational transformation requires leaders throughout the organization.