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Oct 5, 2022 2022-10 Business Administration Faculty Research in Education

When companies change — exploring the forces that disrupt corporate inertia

If you’ve ever played dodgeball, you understand the concept of inertia. An object, once set in motion, has a tendency to stay in motion until something alters its course. In dodgeball, that might be the gym wall or the skull of an unwitting victim. But in the corporate world, it takes a lot more to disrupt the power of inertia and open the door to ideas.

“We know that organizations are difficult to change,” says Gies Assistant Professor Yusaku Takeda. That’s due to a long list of factors, like corporate traditions and structures that tend to reinforce the status quo. Over time, however, companies do change. And Takeda is one of those who studies how.

Yusaku Takeda“I am interested in the intersection between innovation and change, and changes in organizations and society,” says Takeda. This includes big social changes, like the push for diversity in the workplace. In recent years, a lot of pressure has been put on companies to create management teams that are more reflective of society. But while many companies are quick to voice their support for these changes, they are often slow to incorporate them. Something typically has to disrupt corporate inertia to lead to significant change. And that’s where innovation enters the scene, according to Takeda.

In a study that followed nearly 3,000 retail companies from 2004 to 2015, Takeda and his collaborator Letian Zhang at Harvard Business School looked at how the move to online sales changed the corporate landscape. “When retail companies adopt e-commerce, that creates a lot of structural change in an organization,” said Takeda. “Statistically, we see that when retailers adopt e-commerce, the promotion of female and other minority managers increased.” And that increase was significant. According to Takeda, when companies adopted e-commerce, the proportion of Black and women managers increased by 22 and 17 percent respectively.

“What we found is that innovation adoption has an impact, even though it’s not directly related to diversity,” said Takeda. Essentially, while the move to e-commerce may initially be driven by the pursuit of revenue, it causes a significant disruption to corporate inertia, and that creates an opportunity for positive change that leadership can intentionally exploit.

It's not just technology that disrupts corporate inertia, however. In a separate, on-going study with Tommy Pan Fang at Rice University, Takeda is also exploring a strategy known as political coupling that can impact an organization’s ability to maneuver through business environments that are increasingly more unstable.

“In the past decade or so, we’ve seen companies make political statements or take explicit political positions, making that part of their identity. And we see this both from progressive and conservative advocates.” Takeda cites Black Rifle as an example of the latter. The young, Texas-based coffee company built its brand exclusively around conservative values, positioning itself as the “anti-Starbucks.” That seemed to work well, until January 6, 2021, when some storming the capital were seen wearing clothes emblazoned with the Black Rifle brand. Their fans had taken on the brand, but ultimately, they took it where it didn’t want to go, creating an uninvited stigma and PR nightmare.

“We theorize that these strategies are like a double-edged sword,” said Takeda, who explains the upsides of political coupling — like early access to investments and adoption by enthusiasts who resonate with the stated values — can be offset by the downside. “Political coupling doesn’t necessarily lead to negative outcomes,” said Takeda. “But it makes an organization’s ability to shift strategies dependent on external factors, like political climates.” In the end, he says it’s a strategy that’s more likely to succeed when politics are more stable and less divided. Unfortunately, that’s not the case today, where political discussions are highly charged and people across the globe hold competing beliefs and values that have never been further apart.

All of this is fascinating to Takeda, who studies how business organizations maneuver through volatile landscapes as technologies, politics, and complex social issues evolve. He hopes his research will prove useful at Gies, whose learners may one day be those tasked with charting that course for some of the world’s leading companies.

Takeda, who recently completed a PhD in business administration at Harvard, is teaching two courses at Gies, a master’s level course called Managing Innovation as well as an undergrad course that explores ethical dilemmas in business.

The new assistant professor says he’s excited to join Gies because the school isn’t just talking about innovation, it’s implementing it. “I believe Gies is disrupting the mainstream business school education that has become increasingly obsolete,” said Takeda, citing the school’s global reputation, experience in online education, and its stated purpose to disseminate world-class business education to everyone who wishes across the globe. “I think we are emerging as a leader in the future of business education, and to me it’s very exciting to be part of it as a young professor.”