Chapter 7
Innovation and Change
Cowboys vs Farmers
IDEO
Embrace
Learning Outcomes
After reading this chapter, you should be
able to:
1. Explain why innovation matters to
companies.
2. Discuss the different methods that managers
can use to effectively manage innovation in
their organizations.
3. Discuss why not changing can lead to
organizational decline.
4. Discuss the different methods that managers
can use to better manage change as it
occurs.
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Class Activity
Beyond the Book
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Class Activity: Connect the Dots
Beyond the Book
• What does this brainteaser have
to do with innovation?
• Discuss.
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Education Ltd.
Cowboys
vsNelson
Farmers
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Why Innovation Matters
Organizational Change: a difference in the
form, quality, or condition of an organization
over time
Technology
Cycles
1
Innovation
Streams
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Technological Innovation
and S-Curves
• 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, better technology
1.1
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Technological Innovation
and S-Curves
1.1
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Class Activity:
Technology Innovation Awards
Beyond the Book
• Watch the video: New Technology
Awards.
• Discuss the importance of technology
innovation in the business world.
Embrace
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Innovation Streams
• Patterns of
innovation over
time that can create
sustainable
competitive
advantage.
1.2
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Technological Discontinuity
• A scientific advance or unique combination
of existing technologies that creates a
significant breakthrough in performance or
function
1.2
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Innovation Streams:
Technology Cycles Over Time
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Managing Innovation
1. Managing Sources of Innovation
2. Managing during Discontinuous
Change
3. Managing during Incremental
Change
2
IDEO
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Managing Innovation:
Components of Creative Work
Environments
2.1
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Managing Innovation during
Discontinuous Change
Experiential approach to innovation
• Innovation is occurring within an uncertain
environment.
• The key to innovation is to use:
– intuition
– flexible options
– hands-on experience
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2.2
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Experiential Approach to Innovation
Design
Iteration
Multifunctional
Teams
Milestones
Prototype
Testing
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2.2
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Managing Innovation
during Incremental Change
Compression Approach:
Generational Change:
• Assumes that innovation
is a predictable process
that can be planned
in steps
• Examples: Xbox 360,
Nintendo Wii
• Based on incremental
improvements to a
dominant technological
design and achieving
backward compatibility
with older technology
• Example: Harry Potter
films
2.3
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Compression Approach
to Innovation
Planning
Multifunctional
Teams
Overlapping
Steps
2.3
Supplier
Involvement
Shortening Time
of Individual
Steps
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Five Stages of
Organizational Decline
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3
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Managing Change
Change
Forces
Resistance
Forces
19
4
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Managing Resistance to Change
UNFREEZE
• Believe that change is needed.
• Share reasons, communicate, and empathize.
CHANGE INTERVENTION
• Change behaviour/work practices.
• Explain why; champion change; create opportunities
for feedback; timing; security; educate; don’t rush.
FREEZE
• Support and reinforce.
• Make it “stick.”
21
4.1
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What to Do When
Employees Resist Change
Unfreezing
• Share reasons.
• Empathize.
• Communicate.
Change
• Explain.
• Champion.
• Create opportunities
for feedback.
• Time it right.
• Offer security.
• Educate.
• Don’t rush.
Source: G.J. Iskat and J. Liebowitz, “What to Do When Employees Resist Change,” Supervision, 1 August 1996.
4.1
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Managing Resistance to Change
•
•
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Educate/communicate
Participate
Negotiate
Managerial support
Coercion
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4.1
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Errors Managers Make
When Leading Change
Unfreezing
1.Not establishing a great enough sense of
urgency
2.Not creating a powerful enough guiding
coalition
Change
3.Lacking a vision
4.Undercommunicating the vision by a factor of
ten
Source: J. P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73, no. 2 (March-April 1995):59.
4.2
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Errors Managers Make
When Leading Change
5. Not removing obstacles to the new vision
6. Not systematically planning for and creating
short-term wins
Refreezing
7. Declaring victory too soon
8. Not anchoring changes in the corporation’s
culture
Source: J. P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73, no. 2 (March-April 1995):59.
4.2
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Change Tools and Techniques
Results-Driven Change:
• Change created quickly by focusing on the
measurement and improvement of results
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
4.3
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Change Tools and Techniques
Organizational Development:
•A philosophy and collection of planned change
interventions designed to improve an
organization’s long-term health and performance
4.3
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How to Create a Results-Driven Change Program
1. Set measurable, short-term goals to improve
performance.
2. Make sure your action steps are likely to improve
measured performance.
3. Stress the importance of immediate improvements.
4. Solicit help from consultants and staffers to achieve
quick improvements in performance.
5. Test action steps to see if they actually yield
improvements. If they don’t, discard them and
establish new ones.
6. Use resources you have or that can be easily acquired.
It doesn’t take much.
Source: R. H. Schaffer and H. A. Thomson, “Successful Change Programs Begin With Results,” Harvard
Business Review on Change (Boston: Harvard Business School Press, 1998), 189–213.
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General Steps for Organizational
Development Interventions
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Different Kinds of Organizational
Development Interventions
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