Untangling Dynamic and Operational Capabilities: Strategy for the (N)ever‐Changing World

We explain why the line between dynamic and operational (or ordinary) capabilities is unavoidably blurry, draw implications for capabilities that promote economically important but seemingly gradual change, and provide recommendations for future research that takes these issues into account. Copyright © 2011 John Wiley & Sons, Ltd.     

Getting it right the second time

Once a business performs a complex activity well, the parent organization often wants to replicate that success. But doing that is surprisingly difficult, and businesses nearly always fail when they try to reproduce a best practice. The reason? People approaching best-practice replication are overly optimistic and overconfident. They try to perfect an operation that's running nearly flawlessly, or they try to piece together different practices to create the perfect hybrid. Getting it right the second time (and all the times after that) involves adjusting for overconfidence in your own abilities and imposing strict discipline on the process and the organization. The authors studied numerous business settings to find out how organizational routines were successfully reproduced, and they identified five steps for successful replication. First, make sure you've got something that can be copied and that's worth copying. Some processes don't lend themselves to duplication; others can be copied but maybe shouldn't be. Second, work from a single template. It provides proof success, performance measurements, a tactical approach, and a reference for when problems arise. Third, copy the example exactly, and fourth, make changes only after you achieve acceptable results. The people who developed the template have probably already encountered many of the problems you want to "fix," so it's best to create a working system before you introduce changes. Fifth, don't throw away the template. If your copy doesn't work, you can use the template to identify and solve problems. Best-practice replication, while less glamorous than pure innovation, contributes enormously to the bottom line of most companies. The article's examples--Banc One, Rank Xerox, Intel, Starbucks, and Re/Max Israel--prove that exact copying is a non-trivial, challenging accomplishment.