Transforming Legacy Organizations

CHAPTER 7‘YOU GET WHAT YOU MEASURE’: THE ORGANIZATIONAL IMMUNE SYSTEM

Change and innovation processes are complex. You don't succeed with change by making only one simple alteration or adjustment, and you often need to mobilize many people at the same time. So if the strategy calls for transformation, and you as a leader call for innovation, you need to ensure that the organizational immune system is strong enough to handle the job. Because if you don't strengthen the organizational immune system and address the barriers that you will otherwise be met with, then, from the individual employee's point of view, the rational behaviour will not necessarily be what is best for the organization. In game theory, this conflict is called a coordination problem.¹ All companies experience it. But here, too, you can design yourself out of the problems.

Maybe you've heard of the prisoner's dilemma, a classic way of illustrating coordination problems which was originally developed at the American research institute RAND in 1950² and subsequently further developed by Canadian mathematician Albert W. Tucker³. Two people are captured by the police and accused of a crime. The police do not have enough knowledge to convict them of the crime for which they've been arrested, but they know enough to imprison them for a minor offence. It is in the police's interest to make them testify against each other. Depending on how the prisoners choose to act with the police, they will go free, get a short ...