Escaping the Identity Trap

Organizations, like people, have essential natures — defined by their formative experiences, their beliefs, their knowledge bases and their core competences — which may remain tacit and unquestioned until some event, such as a new strategy or a radical shift in the environment, makes an old identity obsolete. A disruption in a strongly anchored identity can be fatal, unless managers can align their company’s identity better with current business conditions.

Hamid Bouchikhi, of France’s ESSEC Business School and John R. Kimberly of the University of Pennsylvania’s Wharton School note that while the “identity trap” threatens every organization, escaping a restrictive identity is possible. They identify two ways enterprises do this successfully — through evolution (a gradual change in their strategic and organizational layers) and revolution (a change that bursts up through companies’ outer layers).

Through field-based and clinical research in a variety of industries and companies, including Moulinex, Polaroid, Groupe Danone and Aventis, the authors have developed an “identity audit” to help managers learn to recognize the conflicts and initiate identity change to make their companies more adaptive. By regularly assessing how well their identity fits with current business conditions, companies can rethink their identity before it becomes obsolete.