Change at Divisionalised, Project-Based Organisations: Achieving Transformational Success

Much remains to be learned about how divisionalised, project-based organisations are able to successfully change strategic direction when it becomes necessary to focus on exploitation activities after concentrating on exploration, that is, after prioritising the development of innovative products or technologies to be first to market or a technological leader. Such a change inevitably alters how the organisation’s project employees, working within a given division, typically interact to solve creative problems and the resources they need to function effectively. The study, conducted at the Health Division of a large divisionalised, project-based engineering organisation, implementing a strategy to turn the division into an original equipment manufacturer (OEM) after previously concentrating on innovating and manufacturing surgical simulation products, sheds light on what is involved. Analysis revealed four themes: (1) it frustrates project employees with a passion for innovating to not know how and to what extent they are expected to innovate across key projects during the early phases of a program of change, (2) it is always important to invest time and effort to understand how the project portfolio should be rebalanced when implementing a new strategy, (3) the question of who could become important future intra- and inter-organisational collaboration partners must be answered in a timely manner, and (4) the right supports must be put in place to ensure project employees will be able to continue to solve problems creatively. The chapter concludes with a discussion of the implications of our findings for future research.