Chapter 10 - Innovation and change Flashcards
How might organizations become more creative and use innovation to promote change?
- examine their existing business model in order to make the most of their current capabilities and capacity in the form of line extensions and expansions
- explore many prototypes, with an open mind to feedback and reconfiguration along the way
- be concerned about strategic business design and create a unique network of business activities that not only deliver value to the user, but also competitive advantage and profit to the company
Organizational innovation
the successful implementation of creative ideas in organizations
Creativity
the production of novel and useful ideas
Organizational change
a difference in the form, quality, or condition of an organization over time
Innovation can take many forms
- can refer to changes in an organization as a whole, to specific products or to business processes
Two programs the Government of Canada funds
- Achieving excellence: investing in people, knowledge and opportunity
- Knowledge matters: skills and learning for Canadians
Technology cycle
cycle that begins with the “birth” of a new technology and ends when that technology reaches its limits and is replaced by a newer, substantially better technology
S-curve pattern of innovation
a pattern of technological innovation characterized by slow initial progress, then rapid progress, and then again by slow progress as a technology matures and reaches its limits
Technology cycles and technological innovation don’t
necessarily mean “high technology”. Broaden your perspective by considering advances or changes in knowledge, tools, and techniques
Innovation streams
patterns of innovation over time that can create sustainable competitive advantage
Companies that want to sustain a competitive advantage must
understand and protect themselves from the strategic threats of innovations
Innovation streams have two steps
it starts with “technological discontinuity” and is followed by an “era of ferment”
Technological discontinuity
scientific advance or unique combination of existing technologies that creates a significant breakthrough in performance or function
Era of ferment
phase of a technology cycle characterized by technological substitution and design competition
Technological substitution
purchase of new technologies to replace older ones
Design competition
competition between old and new technologies to establish a new technological standard or dominant design
Dominant design
a new technological design or process that becomes the accepted market standard
Incremental change
the phase of a technology cycle in which companies innovate by lowering costs and improving the functioning and performance of the dominant technological design
To successfully manage innovation streams, companies need to be good at two things:
- managing innovation during discontinuous change
- managing innovation during incremental change
Experiential approach to innovation
an approach to innovation that assumes a highly uncertain environment and uses intuition, flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding
Experiential approach to innovation uses five parts:
- design iterations
- testing
- milestones
- multifunctional teams
- powerful leaders
Design iterations - Experiential approach
a cycle of repetition in which a company tests a prototype of a new product or service, improves on that design, and then builds and tests the improved prototype
Testing - Experiential approach
systematic comparison of different product designs or design iterations
Testing overcomes
- uncertainty and improves understanding
- the more prototypes you build, the more likely you will learn what does and doesn’t work
- designers and engineers are less likely to “fall in love” with a particular prototype, instead they will become more concerned with improving the product or technology
- testing speeds up and improves the innovation process
- testing two different prototypes against each other quickly makes product design strengths and weaknesses apparent
- testing uncovers errors early in the design process when they are easiest to correct
- testing accelerates learning and understanding by forcing engineers and product designers to examine hard data about product performance
Milestones - Experiential approach
formal project review points used to assess progress and performance
Multifunctional teams - Experiential approach
work teams composed of people from different departments
Multifunctional teams accelerate
- learning and understanding by mixing and integrating technical, marketing, and manufacturing activities.
- innovation through early identification of problems that would typically not have been identified until much later by involving all key departments in development from the start
Powerful leaders - Experiential approach
- provide vision, discipline, and motivation to keep the innovation process focused, on time, and on target
- are able to get resources when they are needed, are typically more experienced, have high status in the company, and are held directly responsible for product success or failure
- can get innovation-related projects done nine months faster than leaders with little power or influence
Compression approach can be used
- during periods of incremental change, in which the focus is on systematically improving the performance and lowering the cost of the dominant technological design
Compression approach to innovation
an approach to innovation that assumes that incremental innovation can be planned using a series of steps, and that compressing those steps can speed innovation
Generational change
change based on incremental improvements to a dominant technological design such that the improved technology is fully backward compatible with the older technology
Ways to shorten development time
- supplier involvement
- simply shorten the time of individual steps in the innovation process
- sometimes multiple development steps can be performed at the same time
Change forces
forces that produce differences in the form, quality, or condition of an organization over time
Resistance forces
forces that support the existing state of conditions in organizations
Change can be
nonexistent, sporadic, continuous, or discontinuous, depending on whether change forces are stronger or weaker than resistance forces
Organizational decline
a large decrease in organizational performance that occurs when companies don’t anticipate, recognize, neutralize, or adapt to the internal or external pressures that threaten their survival
Five stages of organizational decline
- blinded
- inaction
- faulty action
- crisis
- dissolution
Blinded stage - organizational decline
decline begins because key managers don’t recognize the internal or external changes that will harm their organizations
Inaction stage - organizational decline
as organizational performance problems become more visible, management may recognize the need to change but still take no action hoping that the problems will correct themselves
Faulty action stage - organizational decline
due to rising costs and decreasing profits and market share, management will announce “belt-tightening” plans designed to cut costs, increase efficiency and restore profits
Crisis stage - organizational decline
bankruptcy or dissolution is likely to occur unless the company completely reorganizes the way it does business
Dissolution stage - organizational decline
after failing to make changes needed to sustain the organization, the company is dissolved through bankruptcy proceedings or by selling assets in order to pay suppliers, banks, and creditors
Resistance to change
opposition to change resulting from self-interest, misunderstandings and distrust, or a general intolerance for change
Resisting change because of self-interest
they fear it will result in loss of pay, power, responsibility or their job
Resisting change because of misunderstandings or distrust
they don’t understand the change or the reasons for it, or they distrust the people, typically management, behind the change
Resisting change because of general intolerance to change
some people are simply less capable of handling change than others… they worry that they will not be able to learn the new skills and behaviours needed to successfully negotiate change in their companies
Managing resistance to change - 3 steps
- unfreezing
- change intervention
- refreezing
Managing resistance to change - Unfreezing
getting the people affected by change to believe that change is needed
Managing resistance to change - Change intervention
the process used to get workers and managers to change their behaviour and work practices
Managing resistance to change - Refreezing
supporting and reinforcing the new changes so they “stick”
Manage resistance to change by - 5 ways
- education and communication
- participation
- negotiation
- top management support
- coercion
Coercion
use of formal power and authority to force others to change
Three steps to unfreezing
- Share reasons: share the reasons for change with employees
- Emphasize: be empathetic to the difficulties that change will create for managers and employees
- Communicate: communicate the details simply, clearly, extensively, verbally, and in writing
Seven steps to change
- Benefits: explain the benefits, “what’s in it for them”
- Champion: identify a highly respected manager to manage the change effort
- Input: Allow the people who will be affected by change to express their needs and offer their input
- Timing: don’t begin change at a bad time, for example, during the busiest part of the year or month
- Security: if possible, maintain employees’ job security to minimize fear of change
- Training: offer training to ensure that employees are both confident and competent to handle new requirements
- Pace: change at a manageable pace, don’t rush
Three steps to refreezing
- Top management support: send consistent messages and free resources
- Publicize success: let others know when and where change is working
- Employee services: offer counselling or other services to help employees deal with the stress of change
Four approaches to promote long-term effectiveness and performance (change tools and techniques)
- results-driven change
- General Electric Workout
- transition management team (TMT)
- organizational development
Results-driven change
change created quickly by focusing on the measurement and improvements of results
Results-driven change program
- create measurable, short-term goals to improve performance
- use action steps only if they are likely to improve measured performance
- management should stress the importance of immediate improvements
- consultants and staffers should help managers and employees achieve quick improvements in performance
- managers and employees should test action steps to see if they actually yield improvements. Action steps that don’t should be discarded
- it takes few resources to get results-driven changes started
General Electric Workout
a three-day meeting in which managers and employees from different levels and parts of an organization quickly generate and act on solutions to specific business problems
Transition management team (TMT)
a team of 8 to 12 people whose full-time job is to completely manage and coordinate a company’s change process
Primary responsibilities of transition management teams
- establish context for change and provide guidance
- stimulate conversation
- provide appropriate resources
- coordinate and align projects
- ensure congruence of messages, activities, policies, and behaviours
- provide opportunities for joint creation
- anticipate, identify, and address people problems
- prepare the critical mass
Organizational development
a philosophy and collection of planned change interventions designed to improve an organization’s long-term health and performance
Change agent
the person formally in charge of guiding a change effort
General steps for organizational development interventions - change agent
- entry
- start-up
- assessment and feedback
- action planning
- intervention
- evaluation
- adoption
- separation
Entry - change agent
a problem is discovered and the need for change becomes apparent. Search begins for someone to deal with the problem and facilitate change
Start-up - change agent
a change agent enters the picture and works to clarify the problem and gain commitment to a change effort
Assessment and feedback - change agent
the change agent gathers information about the problem and provides feedback about it to decision makers and those affected by it
Intervention - change agent
the action plan, or organizational development intervention, is carried out
Evaluation - change agent
the change agent helps decision makers assess the effectiveness of the intervention
Adoption - change agent
organizational members accept ownership and responsibility for the change, which is then carried out through the entire organization
Seperation - change agent
the change agent leaves the organization after first ensuring that the change intervention will continue to work
Large system interventions
- sociotechnical systems
- survey feedback
Large system interventions - Sociotechnical systems
an intervention designed to improve how well employees use and adjust to the work technology used in an organization
Large system interventions - Survey feedback
an intervention that uses surveys to collect information from organizational members, reports the results of that survey to organizational members, and then uses those results to develop action plans for improvement
Small group interventions
- team building
- unit goal setting
Small group interventions - Team building
an intervention designed to increase the cohesion and cooperation of work group members
Small group interventions - Unit goal setting
an intervention designed to help a work group establish short- and long-term goals
Person-focused interventions
- counselling/coaching
- training
Person-focused interventions - Counselling/coaching
an intervention designed so that a formal helper or coach listens to managers or employees and advises them how to deal with work or interpersonal problems
Person-focused interventions - Training
an intervention designed to provide individuals the knowledge, skills, or attitudes they need to become more effective at their jobs
Organizational dialouge
the process by which people in an organization learn to talk effectively and constructively with each other
Errors managers makes when leading change - unfreezing
- not establishing a great enough sense of urgency
- not creating a powerful enough guiding coalition
Errors managers makes when leading change - change intervention
- lacking vision
- under communicating the vision by a factor of ten
- not removing obstacles to the new vision
- not systematically planning for and creating short-term wins
Errors managers makes when leading change - refreezing
- declaring victory too soon
- not anchoring changes in the corporation’s culture
