Innovation and change Flashcards
Define Creativity and explain its relationship with organisational innovation
Creativity is the production of novel and useful ideas. Organizational innovation is the successful implementation of creative ideas in an organization. Thus, creativity is a precursor to the process of organizational innovation, and organizational creativity could be considered a form of organizational innovation.
Explain how the concept of innovation streams relates to the concept of sustainable competitive advantage.
Organizations can create competitive advantage for themselves if they have a distinctive competence that allows them to make, do, or perform something better than their competitors. Furthermore, a competitive advantage becomes sustainable if other companies cannot duplicate the benefits obtained from that distinctive competence. Technological innovation, however, makes it possible not only to duplicate the benefits obtained from a company’s distinctive advantage, but also to quickly turn a company’s competitive advantage into a competitive disadvantage.
The best way to protect a competitive advantage is to create a stream of innovative ideas and products.
Innovation streams begin with technological discontinuities that create significant breakthroughs in performance or function. Technological discontinuities are followed by discontinuous change, in which customers purchase new technologies (technological substitution) and companies compete to establish the new dominant design (design competition). Dominant designs emerge because of critical mass, because they solve a practical problem, or because of the negotiations of independent standards bodies. Because
technological innovation is both competence enhancing and competence destroying, companies that bet on the wrong design often struggle, while companies that bet on the eventual dominant design usually prosper. Emergence of a dominant design leads to a focus on incremental change, lowering costs, and small, but steady improvements in the dominant design. This focus continues until the next technological discontinuity occurs.
Briefly describe the typical pattern of technology cycles that occurs during technological innovation.
Technology cycles typically follow an S-curve pattern of innovation. Early in the cycle, technological progress is slow and improvements in technological performance are small. However, as a technology matures, performance improves quickly. Finally, small improvements occur as the limits of a technology are reached. At this point, significant improvements in performance must come from new technologies.
What are innovation streams? Describe a typical innovation stream.
Innovation streams are patterns of innovation over time that can create sustainable competitive advantage. A typical innovation stream consists of a series of technology cycles, which begin with a new technology and end when that technology is replaced by a newer, substantially better technology. Innovation streams typically consist of (1) a technological discontinuity, (2) discontinuous change, characterized by technological substitution and design competition, (3) the emergence of a dominant design, followed by (4) a focus on incremental change until the next technological discontinuity occurs.
Identify and briefly describe the three things that companies need to be good at in order to successfully manage innovation streams. Explain why managing these factors is important. Specify which one of
the three might tend to be more influenced by organizational culture and less influenced by the manager’s own personal ability.
Given the nature and demands of technology cycles and innovation streams, managers must be equally good at managing innovation in two very different circumstances. First, during discontinuous change companies must find a way to anticipate and survive the technological discontinuities that can
suddenly transform industry leaders into losers and industry unknowns into industry powerhouses. Companies that can’t manage innovation following technological discontinuities risk quick organizational decline and dissolution. Second, after a new dominant design emerges following discontinuous change, companies must manage the very different process of incremental improvement and innovation. Companies that can’t manage incremental innovation slowly deteriorate as they fall farther behind industry leaders. Finally, in order to have innovation streams to manage, companies
must be able to promote the creative ideas that lead to organizational innovation in the first place.
Unfortunately, what works well when managing innovation after technological discontinuities doesn’t work well when managing innovation during periods of incremental change (and vice versa). Consequently, to successfully manage innovation streams, companies need to be good at three things: (1) managing the sources of innovation, (2) managing innovation during discontinuous change, and (3) managing innovation during incremental change.
In terms of managing the sources of innovation, companies can jump-start innovation by building creative work environments, in which workers perceive that creative thoughts and ideas are welcomed and valued. Creative work environments have five components that encourage creativity: challenging work, organizational encouragement, supervisory encouragement, work group encouragement, and freedom. A sixth component, organizational impediments, must be managed so as not to discourage creativity.
The experiential approach to innovation is most appropriate when managing discontinuous change, in which a technological discontinuity created a significant breakthrough in performance or function. This approach assumes that innovation is occurring within a highly uncertain environment, and that the key to fast product innovation is to use intuition, flexible options, and hands-on experience to reduce uncertainty and accelerate learning and understanding. There are five parts to the experiential approach to innovation: design iterations, testing, milestones, multifunctional teams, and powerful leaders.
The compression approach to innovation 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. The compression approach assumes that innovation is a predictable process, that incremental innovation can be planned using a series of steps, and that compressing the time it takes to complete those steps can speed up innovation. There are five parts to the compression approach to innovation: planning, supplier involvement, shortening the time of individual steps, overlapping steps,
and multifunctional teams.
Of these three approaches, one might argue that building creative work environments would be the one more affected by organizational culture than the individual manager’s own ability. The emphasis
on attitudes, perception, and interpersonal behavior in this approach would be more susceptible to overriding influences from organizational culture than the more procedural emphases of the other two approaches, which would be more easily influenced by managerial skill. However, an argument could be made for the experiential learning approach as being more affected by organizational culture, based upon the role of intuition, flexibility, multifunctional teams and powerful leaders. Similarly, but perhaps to a lesser extent, an argument could be made for the compression approach as being more affected by organizational culture, based upon the use of multifunctional teams. However, this argument seems least appropriate in the context of all three approaches, given the more obvious behavioral components of the other two. The key to quality in answers is the extent to which the behavioral dimensions of values, beliefs, and attitudes are tied in to the argument in favor of majority influence for the given approach.
How are technology cycles and innovation streams related?
A technology cycle begins with the “birth” of a new technology and ends when that technology reaches its limits and “dies” as it is replaced by a newer, substantially better technology. Technology cycles typically follow an S-curve pattern of innovation. Early in the cycle, technological progress is slow
and improvements in technological performance are small. However, as a technology matures, performance improves quickly. Finally, small improvements occur as the limits of a technology are reached. At this point, significant improvements in performance must come from new technologies. Innovation streams are defined as patterns of innovation over time that can create sustainable competitive advantage.
What are creative work environments? What does a manager need to do to develop and manage creative work environments?
Creative work environments are workplace cultures in which workers perceive that new ideas are welcomed, valued, and encouraged. Creative work environments have five components that encourage creativity: challenging work, organizational encouragement, supervisory encouragement, work group encouragement, and freedom. A sixth component, organizational impediments, must be managed so as not to discourage creativity. Organizational impediments include such things as internal conflict and power struggles, rigid management structures, and a conservative bias toward the status quo. These can all discourage creativity, since they create the perception that others in the organization will decide which ideas are acceptable and deserve support.
Explain the difference between activity-oriented and results-driven change, and list the advantages of the results-driven approach to change. Characterize each of the approaches to organizational change presented in the text in terms of their apparent degree of emphasis on activities or results.
One of the reasons that organizational change efforts fail is that they are activity-oriented, meaning that they primarily focus on changing company procedures, management philosophy, or employee behavior. Typically, there is much buildup and preparation as consultants are brought in, presentations are made, books are read, and employees and managers are trained. There’s a tremendous emphasis on “doing things the new way.” But for all the focus on activities, on “doing,” there’s almost no focus on results, on seeing if all this activity has actually made a difference.
By contrast, results-driven change supplants the sole emphasis on activity with a laser-like focus on quickly measuring and improving results. Rather than emphasizing changes in philosophy, procedures, and employee behavior, this approach emphasizes identifying and working with easily measurable dimensions associated with demonstrably successful change. As one manager put it, change is a project, not a process. This direct emphasis on measuring and improving results is the first advantage of the results-driven change approach. The second advantage is that managers introduce changes in procedures, philosophy, or behavior only if they are likely to improve measured performance. In other words, managers actually test to see if changes make a difference. A third
advantage of results-driven change is that quick, visible improvements motivate employees to continue to make additional changes to improve measured performance. Consequently, unlike most change efforts, the quick successes associated with results-driven change are particularly effective at reducing resistance to change.
The text identifies results-driven change, the General Electric workout, transition management teams, and organizational development as different change tools and techniques that can be used to create and manage organizational change. Among these approaches, the General Electric workout is a special kind of results-driven change. It is a three-day meeting that brings together managers and employees from different levels and parts of an organization to quickly generate and act on solutions
to specific business problems. At the other end of the spectrum, as an activity-oriented approach,
would be organization development. Organizational development is a philosophy and collection of planned change interventions designed to improve an organization’s long-term health and performance, which clearly places greatest emphasis upon process, philosophy, procedure, and behavior. The remaining approach, the transition management team (a team of 8 to 12 people whose full-time job is
to completely manage and coordinate a company’s change process), seems to lie in-between the results and activity orientations. It includes more emphasis on activities, or things to be done, than on the specific measurement of demonstrated results. On the other hand, its greater emphasis on specificity is closer to the results-orientation than organization development is.
Define a Technology cycle and draw the S-curve pattern of innovation.
Technology cycle: A 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.
The S-curve pattern of innovation refers to a pattern of technological innovation characterized by slow inital progress, then rapid progress, and then slow progress as a technology matures and reaches its limites. Examples of this diagramcan be seen on slide 8 of lecture notes and on Page 205 of “Principles of management”
Identify the different advnatages and siadvantages of using an Experiental approach during discontinuous change and the Compression approach during incremental chnage. Express these by assessing the approaches environment, goals, approasj and steps taken.
Eperiental approach to innovation: Managing innovation during discontinuous chAnge. This approach to innovation that assumes a highly uncertain environment an duses intuition, flexible operations, and hand-on experience to reduce, uncertainly and accelerate learning and understading.
Environment: Highly Uncertain. Discontinous change - Technological substitution and design competition.
Goals: Speed - Significant improvements in performance. Establishment of new dominant.
Approach: Build something new, different, and substantially better.
Steps: Design iterations, Testing, Milestones, Multifunctional teams, and powerful eladers.
Compression Approach to Innovation: Managing innovation during Incremental change:
Environment: Certain. Incremental change - established technology (ie. Dominant design).
Goal: Speed, Lower costs, Incremental improvements in performance of dominant design.
Approach: Compress time and steps needed to bring about small improvements.
Steps: Planning, Supplier involvement, Shortening the time of individual steps, Overlapping steps, and Multifunctional teams.
Explain organizational decline and the risks of not adapting.
The five-stage process of organizational decline begins when organisations don’t recognoize the need for chnage. in the blinded stage, managers fail to recognise the chnages that threaten their organisation’s survival. in the inaction stage, management recognized the need to chnage but doesn’t act, hoping that the problmes will correct themselves. in the faulty action stage, management focuses on cost cutting and efficiency rather than facing up to the fundamental chnages needed to ensure survival. in the crisis stage, failure is likely unless fundamental reorganisation occurs. Finally, in the dissolution stage, the company is dissolved through bankruptcy proceeding; by selling assests to pay creditors; or through the closing of stores, offices, and facilities. if companies recognize the need to chnage early enough however, dissolution may be avoided.
According to Kurt Lewin, managing organizational chnage is the basic process of un-freezing, change intervention and refreezing.
Define these terms and explain why resiting change can be dangerous for a company.
Unfreezing - Getting the people affected by chnage to believe that chnage is needed.
Chnage intervention - The process used to get workers and managers to chnage their behavior and work practises.
Refreezing - Supporting and reinforcing new chnages so that they “stick”.
Resistancance to chnage is an example of frozen behavior. given the choice between chnaging and not chnaging, most people would rather not chnage. Because resistance to chnage is natural and inevitable, managers need to unfreeze resistance to change to create successful chnage programs. The following methods can be used to maage resistance to chnage: education and communication, participation, negotiation, top-managent support, and coercion.
When resistance to chnage is based on insufficent, incorrect, or misleading information, managers should educate employees about the need to chnage and communicate chnage related information to them.
Give examples of what to do when employees resist change.
Unfreezing:
- Share Reasons: Share the reasons for change with employees.
- Empathize: Be empathetic to the difficulties that change will create for managers and employees.
- Communicate: Communicate the details simply, clearly, extensively, verbally, and in writing.
Change Intervention:
- Explain benefits: Explain the benefits, “What’s in it for them”.
- Champion: Identify a highly respected manager to manage the change effort.
- Seek output: Allow the people who will be affected by changes to express their needs and offer their input.
- Choose timing: Don’t begin change at a bad time, for example, during the busiest part of the year or month.
- Maintain security: If possible, maintain employees are both confident and competent to handle new requirements.
- Offer training: Offer training to ensure that employees are both confident and competent to handle new requirements.
- Pace yourself: Change at a manageable pace. Don’t rush.
Identify the errors managers make when leading change.
Unfreezing:
- Not establishing a great enough sense of urgency.
- Not creating a powerful enough guiding coalition.
Change:
- Lacking a vision.
- Under-communicating the vision by a factor of 10.
- Not removing obstacles to the new vision.
- not systematically planning for and creating short-term wins.
Refreezing:
- Declaring victory too soon.
- not anchoring changes in the corporation’s culture.
List and explain the four types of change tools and techniques.
Result-driven change: Change created quickly by focusing on the measurement and improvement of results.
General Electric Workout: A three-day meeting in which manager and employees from different levels and parts of an organization quickly generate and act on solutions to specific business problems.
Transition Management teams (TMT): A team of 8 to 12 people whose full-time job is to manage and coordinate a company’s change process.
Organizational development: Philosophy and collection of planned change interventions designed to improve an organization’s long-term health and performance.
