Comparing theories of change
Our research has shown that all corporate transformations can be compared along the six dimensions shown here. The table outlines the differences between the E and O archetypes and illustrates what an integrated approach might look like.
| Dimensions of change | Theory E | Theory O | Theories E and O combined |
| Goals | Maximize shareholder value | Develop organizational capabilities | Explicitly embrace the paradox between economic value and organizational capability |
| Leadership | Manage change from the top down | Encourage participation from the bottom up | Set direction from the top and engage the people below |
| Focus | Emphasize structure and systems | Build up corporate culture: employees’ behavior and attitudes | Focus simultaneously on the hard (structures and systems) and the soft (corporate culture) |
| Process | Plan and establish programs | Experiment and evolve | Plan for spontaneity |
| Reward system | Motivate through financial incentives | Motivate through commitment—use pay as fair exchange | Use incentives to reinforce change but not to drive it |
| Use of consultants | Consultants analyze problems and shape solutions | Consultants support management in shaping their own solutions | Consultants are expert resources who empower employees |
This is an excerpt from HBR’s 10 Must Reads (On Change Management). Get your copy here.
Credit: Abhishek Singh
