Sisyphus Ahead Dedicated, well-meaning consultants are still offering “Change Management.” Last month, one consultant gave a particularly energetic talk on the topic. It was identical to one I heard at Ford Motor in 1988 while participating in a senior management offsite. Many people concluded years ago that change management does not work. The proof is the failure of US automobile manufacturers. Ironically, even after a generation, change management hasn’t changed! The old idea of change is flawed. It sees organizations as finite, ordered structures. Rational interventions therefore are expected to dismantle current behavior and values. The organization is then reassembled to manifest and institutionalize the new, preordained state. New outcomes are expected. But, they never come about. Rather, change management just creates a lot of grief. It rarely addresses underlying structural issues. Remember, if you ever hear the confectionary platitude, ‘change is the only constant,’ you are probably in a severely change-challenged organization like GM. 
The GM Solution: Life Boats, Not Life Support
Shoshana Zuboff Here is how friend of ValueNetworks.com Shoshana Zuboff describes failed change in Business Week this week in, ‘The GM Solution: Life Boats, Not Life Support.’ And in 2007, with over a million unsold cars in inventory, Mark LaNeve, GM’s head of North American Sales and Marketing, protested the need for change. “It’s not like we have some crisis,” he told the Wall Street Journal in its Feb. 9, 2007 edition.
None of this is exactly "rational" behavior, but it tracks with what institutional economists have observed: The more a practice is institutionalized (history, legitimacy, interdependence, codification), the more it is taken for granted, the greater the energy that goes into maintaining it, and the more relentless the resistance to change. In 2006, GM's CEO Rick Wagoner responded to the call for "new blood" in GM's leadership with this screed in Newsweek: "These are sophisticated problems with historical tails that run back 80, 90 years. The chance of someone coming in and understanding our business…is absolutely microscopic."
This is another really good example of why, if you ever hear the change management mantra, ‘senior management sponsorship,’ be very suspicious. Remember, change does not originate from the top or the middle. These structures were specifically invented to eliminate change and provide stability and continuity. Recognize change management experts lament the failure of change management, when, in fact, it is they that perpetuate inertia and lead organizational intransigence. Today, successful businesses and flourishing organizations are in a headlong flight to value networks and network intangibles. Toyota, Nissan and Honda get it and helped invent it vis-à-vis TPS & Lean. Managers in the US view these companies through an engineering lense that only sees the problem solving aspects of quality and Lean. What people have missed in large part is how deeply these companies value human intelligence and their "invisible" complex networks of connection and mutual support. See: http://valuenetworks.com/public/item/209498 The focus on value and network intangibles allows the new “Big 3” of Toyota, Nissan and Honda to account for 54.1% of the US car market. Fact is, the US car market is booming for these companies. The non-union configuration of Toyota, Nissan and Honda allows them to master fluid network intangibles. They produce products that are enormously popular and profitable... in the good ol' U S of A. Toyota’s annual profit is more that GMs market capitalization! Here is further reinforcement of network intangibles from the same article. The car is becoming an expression of identity, values, and personal control in ways that move far beyond traditional segmentation and branding. For example, fuel efficiency will be only one consideration for a socially responsible vehicle (SRV). What percent of the parts are recyclable? What is the vehicle's total carbon footprint? Are there child labor inputs? Toxic paints, glues, or plastics? How transparent is the supply chain? Is the seller accountable for recycling? What methods are used? Are fair labor practices employed? The new demands for an individualized driving experience at an affordable price require a fundamentally new business model—a discontinuous shift from economies of scale and push marketing to distributed networks of enterprises that cluster around individuals. The single most important factor for competitive advantage will be a brand's ability to forge durable intimate relationships with customers based on trust, dialogue, and transparency. Similar skills will be needed at the enterprise level, as carmakers collaborate with other entities to support diverse customer needs.
Contrary to the old change management philosophy, value networks and VNA are highly instrumental in defining this new business logic. They specifically identify and put in-place “…distributed networks of enterprises that cluster around individuals..” It is important now to activate in the value evolution of business and the stunning economics of intangibles. Delay will only prolong and perpetuate dire situations like GM. We need to get on the path to our shared network future. Please find the link to Shoshana's article below. Please read and comment, here and at Business Week. | 
