|
Change is in the air. Beyond the political symbolism embodied by the election of Barack Obama as president of the United States, the business sector and civil society are clamoring for change - to boost confidence, to revitalize the economy and, above all, to give hope back to businesses and people alike. The requests made by 50 CEOs directed at the new president and published by BusinessWeek clearly illustrate this corporate desire for change. Yet, as IESE Dean Jordi Canals explains in a presentation for Global Entrepreneurship Week, while some financial and macroeconomic changes are necessary, getting out of the crisis will be more a product of reclaiming something that has traditionally been the driving force behind sustained growth in mature economies and which seems to have been forgotten in recent years: good old-fashioned entrepreneurship and innovation. Can innovation happen during turbulent times? Not only is it possible, but it is the primary responsibility of top management, according to Prof. Joaquim Vilà. In his article, he describes the changes necessary for creating a business culture capable of producing a constant flow of new ideas, which translate into added value for customers, society and the company alike. Changes to organization and procedures are meaningless if they are not also accompanied by systems of control and compensation that reward effort and penalize those who place personal goals above corporate improvement. The dissonance between personal agendas and corporate objectives has been one of the causes of the current crisis, says Prof. Pascual Berrone. His analysis shows that basing compensation on financial rewards alone ultimately divests executives of their responsibilities and causes them to take excessive risks, because they have nothing to lose. An extreme example of that paradox was the one that occurred a few months ago at Société Générale, when one of its traders managed to divert billions of euros into personal accounts. Though clearly there was a failure of internal control systems, as we see in the SocGen case presented by Prof. Alberto Ribera, there was also a problem with a corporate culture whose single focus on profit led managers to turn a blind eye. Things don't have to arrive at such critical points before undertaking cultural change. Another study on Vodafone shows how its Spanish subsidiary implemented a plan that aligned one unit's productivity and motivation with the rest of the company, with excellent results. As readers will discover, the process of cultural change may be slow and full of obstacles, but the results can be felt across the entire organization, from team motivation to the bottom line. Speaking of change, in the coming weeks, a new version of IESE Insight will be launched, with new features and more content. Consider it our small reinvention in these times of momentous change.
|
ARCHIVE
