The process of transformation: In search of Nirvana

Bala Chakravarthy

European Management Journal, 1996, vol. 14, issue 6, 529-539

Abstract: Models of corporate transformation typically distinguish a sequence of three stages: Restructuring, Revitalization, and Renewal. The last one comes closest to corporate Nirvana. However, there are very few examples of firms that have progressed successfully through all three stages. What is important is that the path to corporate Nirvana includes from the start the nurturing of all the organizational behaviors essential to a firm's renewal and revitalization even during the restructuring stage of its transformation. Bala Chakravarthy illustrates from an example of the decade-long transformation of the large European telecommunications equipment manufacturer, Alcatel Standard Electrica SA (ASESA) under the leadership of its new CEO - Miguel Canalejo. Canalejo's approach to managing transformation was different and distinct in three ways: he moderated discipline with fairness, he empathized 'sweet-and-sour' (pleasure and pain) together rather than sequentially, and he involved all the firm's key stakeholders in the transformation process. The ASESA story offers several useful lessons on how corporate transformations can be managed more successfully, including a focus on process, the importance of early vision, modified budgetary control systems, and a balanced approach to leadership.

Date: 1996
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