While change and innovation clearly produce much of the turbulence that besets modern businesses, research suggests that change itself is not the culprit, but rather how organizations perceive and cope with change. Both people and organizations rely on analogies to help them comprehend change, including the meaning and potential of new technologies, systems and processes. But do all analogies function in the same way? How strongly should organizations adhere to their chosen analogies?
These and similar questions prompted us to explore the role analogies play in change management. Our research found that in coping with change and innovation, companies generally engage in a three-phase process that involves assimilation, analysis and adaptation. Importantly, there is a strong distinction between analogies that focus on aspects that are familiar and those that center on what is novel. How organizations apply these different types of analogies in confronting change and innovation can be a powerful influence in shaping their long-term direction and performance.
When faced with something new, we usually look for similarities to the familiar. And the more commonalities we find, the more readily we accept the new. Think about what Apple did to help people get comfortable with its first Macintosh computer operating system in the 1980s. When users booted up their computer, the screen they stared into was called a desktop, with small icons labeled “trashcan” and “files.” It was really not a desktop in the physical sense, but Apple was helping people transition from what was familiar to them in the physical world to what was new in the digital world. Amazon.com did something similar as a pioneer for e-commerce. When Amazon first emerged, many consumers were largely unfamiliar with e-commerce. As customers shopped on Amazon.com, they were directed to put their selected goods into a shopping cart. The term “shopping cart” was deliberately selected to help people make the transition from the known (shopping in the real world) to the unknown (shopping in the cyber world). When customers were done with their shopping, they were directed to check out. Again, Amazon was helping people understand how shopping in an online environment was similar to what they would do in a physical one.
But is creating similarities to the familiar always a good approach? Surprisingly, the answer may be no. Following analogies too closely can cause similarities to remain undetected or, even worse, be falsely assumed to exist.
Alternatively, a close-fitting analogy may make the new seem overly familiar. Concentrating too much on similarities can cause organizations to overlook what is unique about the new — particularly those aspects that might offer important advantages and opportunities.
Organizations can rely too heavily and too long on a favored analogy, which carries significant risks. One analogy might be a poor fit relative to others; by using it too long, the company might deprive itself of the insight a better analogy would provide. This may result in diminished competitive advantage, since rivals that use better analogies can adapt more rapidly to change and innovation.
To better understand the full meaning of anything new, employ a wide range of diverse analogies and maintain an open mind. This is much easier to achieve with a staff that can draw from a broad spectrum of work, personal, educational and cultural experiences. Depth of experience in one area may be more harmful than helpful, as it may prevent the richly diverse analogies that breadth of experience frequently engenders.
Avoid relying too heavily on certain analogies and overlooking the benefits of others. Developing a list of diverse analogies makes it less likely that any specific one will be associated with a particular individual or group, limiting its perceived applicability.
To build momentum during the assimilation phase, concentrate on analogies that emphasize the familiar. Focus on similarity of function, rather than appearance. Obvious surface features may obscure important similarities at more structural levels.
Be prepared to change analogies as the new technology becomes more familiar. Transition to analogies that highlight what is distinctive about the innovation. This will help ensure that high-potential attributes are not overlooked.
By Christopher B. Bingham and Steven J. Kahl
Christopher B. Bingham is the Phillip Hettleman Fellow and associate professor of strategy and entrepreneurship at the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill. His industry experience includes work with McKinsey & Company, Deloitte Consulting and Price Waterhouse, as well as with several entrepreneurial firms.
Steven J. Kahl is an associate professor at the Tuck School of Business at Dartmouth College in Hanover, New Hampshire. His current research topics include: social structure and cognitive foundations of market emergence, organizational structure and strategy, identity and strategic change, role of services in technology and industry evolution