MMC | Challenging Organisations to Adapt

MUCH OF THE discourse surrounding innovation today refers to disruptive innovative
– a phrase coined by Clayton Christensen in 1995. This form of innovation makes old ways of doing things obsolete however innovation is rarely truly disruptive.

A more subtle form of innovation exists that can appear to change small pieces of the puzzle but in fact requires a complete rethink of the way in which the puzzle fits together.

Tim Harford, the Financial Times Undercover Economist uncovered a powerful of example of exactly this, and how organisations can miss its potential power in reciting the history of the British army’s adoption of the tank.

The tank was invented by E L de Mole, an Australian who approached the British War Office with his design in 1912, two years before World War I broke out. By 1918, the last year of the war, Britain had the best tanks in the world and the Germans none at all. Indeed their production was prohibited under the Treaty of Versailles. However by the 1930s Germany had leapt ahead and by 1939, the first year of the World War II, it produced twice as many tanks as the British – using them to much greater effect.

Since the late 19th century, armies were organised around cavalry and infantry however the tank was neither a faster horse, nor a more powerful kind of infantryman. Offering new capabilities and the potential for a different kind of warfare it challenged the organisational status quo and traditions.

This challenge was what Harvard Professor Rebecca Henderson calls ‘architectural’ – the British Army didn’t know where to put the tank.

A British army officer named JFC Fuller had recognised the military potential of the tank during World War I, presenting a detailed plan to his superiors in 1917 around its use that could end the war almost immediately. Fuller’s biographer call his idea the most famous unused plan in military history.By 1926 Fuller was offered the command of a new experimental mechanised force, however contrary to his advocacy for a specialist tank division, he was asked to take command of an infantry brigade and a garrison. With an acerbic personality, he baulked and threatened to resign. Instead the British gave control over the tanks to the cavalry, however the cavalry were organised around its horses rather than towards their new weapon. Conservatism towards ‘spurs, swords and regimental tradition[1]‘ ran strong, with the horse the central element of the cavalry-man’s life.

Notwithstanding, the British army began a series of experiments in developing both tanks and tank tactics in the 1920s. These were sufficient to convince the Chief of the Imperial General Staff, Lord Milne, that the cavalry must be mechanised. The politics of organisational change are rarely straightforward and with the backdrop of the Great Depression and a growing anti-war sentiment, the timeline as to when this ambition could be achieved was opaque at best.

As progressive as Milne was, his commitment to the tank did not persist with subsequent commanders in chief. Hampered by the same budgetary constraints as his predecessor, Field Marshal Montgomery-Massingberd was rigidly conservative; he chose to redirect British military modernisation towards a gradual mechanisation without upsetting existing processes. The Germans meanwhile watched, learnt and improved upon Fuller plans and Milne’s experiments[2].

If the British were hamstrung by their inability to reorganise after the victory of the World War I, the Germans had the opposite problem: they had barely any army, no status quo to defend and thus no organisational architecture to get in the way. Britain entered World War II with only two armoured divisions available for action in France—one of which was too poorly trained to be used effectively. Their direct competitor however had redesigned its army around the tank, rather than the other way round.

This historical illustration of an organisation’s struggles to adapt carries forward into today’s business world. Satna Nadella, CEO of Microsoft reflected:

Adapted from Henderson and Clark (1990)

An architectural innovation re-configures an established system to link together components in a new way.  It can be hard to perceive because many of the pieces remain the same, but fitting together differently. It can be particularly challenging for established, dominant organisations. Innovations that are radical and yet fit the pre-existing structure often have a greater chance of adoption. Those that require organisational dexterity and adaptation are a far less natural fit.

Modern methods of construction (MMC) represents such a challenge to many parts of the construction industry.  Integrating MMC is not merely a matter of technological substitution nor a transition from onsite to offsite. As an architectural innovation, it requires adaptions in processes, mindset and interactions both within and outside an organisation.

It does not fit comfortably within the singular domain of a specific departments but instead requires a holistic approach. With most people spending the vast majority of time paying their attention to their assigned area of focus, this can be difficult to see. As such it can be difficult for some to embrace.

This is best illustrated by the principles of a ‘platform’ approach. Platforms are founded upon standardisation and shared commonality across multiple products or assets. The Construction Playbook outlines the Government’s intention to
procure construction projects based on product platforms comprising of standardised and interoperable components and assemblies , encouraging contracting authorities to find ways in which cross-sector platform solutions can be applied.

With a construction industry typically framed around bespoke projects, delivered by individual teams, the capacity to realise the potential of commonality, compatibility and standardisation will require a shift in organisation construct, necessitating multi-party co-ordination and greater collaboration. Whilst partners to Construction Innovation Hub’s Platform Design Programme have signalled their intention to rise to the challenge, for many it represents new territory that will require unlearning old behaviours.

Much of the knowledge and thinking within the industry will be invaluable in delivering the Governments vision, but certain points of established custom and knowledge may not only be unhelpful, it may in fact represent a handicap. Differentiating between what is and is not useful and acquiring and applying new knowledge where necessary will present challenges for firms with a rigid and historically successful operating structure.

The roadmap to modernise and transform the construction industry is likely to require innovation far less elegant than the populist view regularly portrayed.

The reality however, will equally be no easier to deliver.

References:

[1] ‘Spurs, swords and regimental tradition’ were a feature of complaint within a letter from Major General Percy Hobart to his wife in 1938, in regards to the cavalry officers under his command, as he sought to form a mechanised division.

[2] The ultimate compliment paid to the British efforts in developing motorised military theory came perversely from the German general Heinz Guderian. While assigned to a motorised logistics command after World War I, he immersed himself in the writings of JFC Fuller. Later he noted how much his conceptualisation of the German tank division depended on Lord Milne’s experiments – ironically, the fundamental thinking behind blitzkrieg had originated from within the British ranks.

Tett Gillian (2015). The Silo Effect

Bibliography:

• Guderian Heinz (1957), Panzer Leader

• Harford Tim (2018), Why big companies squander brilliant ideas

• Henderson, Rebecca and Clark Kim (1990) Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms

•  Henderson, Rebecca (2020), Reimagining Capitalism

• Salmon, Roger (2013), The Management of Change – Mechanizing the British Regular and Household Cavalry Regiments 1918 -1942

• Steele, Brett D (2005),  Military re-engineering between the World Wars

• Williamson Murray  (2001), Looking at Two Distinct Periods of Military Innovation: 1872 – 1914 and 1920 – 1939:  US Army War College