Chapter 10
Innovation and Change
What Would You Do?
Product Innovation at Kimberly-Clark


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Procter & Gamble is determined to lead the
market in diapers
P&G responds aggressively to new
innovations by Kimberly-Clark
Other products, such as toilet paper are
perceived to have little room for innovation
2
Learning Objectives
Organizational Innovation
After discussing this section,
you should be able to:
1.
2.
explain why innovation matters to
companies.
discuss the different methods that managers
can use to effectively manage innovation in
their organizations.
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Why Innovation Matters
Technology
Cycles
Innovation
Streams
4
Blast From The Past
Technological Innovation in the 20th Century
1900-1910

airplane, plastic, air conditioner
1961-1970
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1911-1920
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radar, helicopter, computer
1941-1950

atomic bomb, bikini, transistor
1951-1960
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talking movies, penicillin, jet engine
1931-1940

1971-1980
mammogram, zipper, sonar
1921-1930
DNA, oral contraceptive, Tylenol
video recorder, handheld calculator,
computer mouse
compact disc, gene splicing, laser
printer
1981-1990

MS-DOS, space shuttle, CD-ROM
1991-2000
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taxol, Pentium processor, Java
2001-Today
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mapping of human genome, first
cloning of human embryo
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Technology Cycle
S-curve pattern of innovation
Performance
Discontinuity
C
New
Technology
B
A
Effort
Adapted from
Exhibit 10.1
6
Technology
Discontinuity (3)
Technology
Substitution (3)
Innovation
Streams
Era of
Incremental
Change (3)
Technology
Substitution (2)
Variation
Selection
Dominant
Design (3)
Technology
Discontinuity (2)
Era of
Incremental
Change (2)
Variation
Selection
Era of
Ferment (3)
Era of
Ferment (2)
Dominant
Design (2)
Technology
Discontinuity (1)
Era of
Incremental
Change (1)
Adapted from
Exhibit 10.3
Variation
Selection
Era of
Ferment (1)
Dominant
Design (1)
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Managing Innovation
Managing Sources of Innovation
Managing Innovation During
Discontinuous Change
Managing Innovation During
Incremental Change
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Managing Sources of Innovation

Creative work environments


workplace cultures in which workers perceive that
new ideas are encouraged
Flow

the psychological state of effortlessness
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Components of Creative Work
Environments Organizational
Encouragement
Challenging
Work
Supervisory
Encouragement
Creative Work
Environments
Organizational
Impediments
Adapted from
Exhibit 10.4
Work Group
Encouragement
Freedom
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Been There, Done That
John Cleese on Innovations & Creativity
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We need to have a positive attitudes
towards mistakes
Fear of failure hurts creativity
Mistakes should be fixed, not concealed
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Managing Innovation During
Discontinuous Change

Discontinuous Change


technology discontinuity creates a significant
breakthrough
Use the experiential approach to innovation

innovation created by intuition, flexible options,
and hands-on experience in an uncertain
environment
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Experiential Approach to Innovation
Design Iteration
Testing
Milestones
Multifunctional Teams
Powerful Leaders
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Managing Innovation during
Incremental Change

Compression approach to innovation


assumes that innovation is a predictable process
that can be planned in steps
Generational change

based on incremental improvements to a
dominant technological design and achieving
backward compatibility with older technology
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Compression Approach to Innovation
Planning
Supplier Involvement
Shortening the Time of
Individual Steps
Overlapping Steps
Multifunctional Teams
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Comparing Experiential and
CompressionExperiential
Approaches Compression
Approach
Assumptions
Steps
Adapted from
Exhibit 10.5
Approach
Approach
Highly uncertain
environment
Goals: speed, significant
improvements
Approach: build something
new and significantly
better
Certain environment
Goals: speed, lower costs,
incremental
improvements
Approach: compress time
and steps, small
improvements
•
•
•
•
•
•
•
•
•
•
Design iterations
Testing
Milestones
Multifunctional teams
Powerful leaders
Planning
Supplier involvement
Shortening time of steps
Overlapping steps
Multifunctional Teams
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Learning Objectives
Organizational Change
After discussing this section,
you should be able to:
3.
4.
discuss why change occurs and why it
matters.
discuss the different methods that managers
can use to better manage change as it
occurs.
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Resistance Forces
Change & Resistance Forces
Strong
No
Change
Discontinuous
Change
Weak
Sporadic
Change
Continuous
Change
Weak
Strong
Adapted from
Exhibit 10.6
Change Forces
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Organizational Decline
Blinded
Stage
Crisis
Stage
Inaction
Stage
Faulty
Action
Stage
Dissolution
Stage
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Managing Change
Managing Resistance
to Change
Change Tools
and Techniques
Managing Conversations
to Promote Change
What Not to Do When
Leading Change
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Managing Resistance to Change


Lewin’s Framework
Methods of Managing Resistance to Change
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Lewin’s Change Process
Unfreezing
• Share reasons
• Empathize
• Communicate
Change
Intervention
•
•
•
•
•
•
•
Benefits
Champion
Input
Timing
Security
Training
Pace
Refreezing
• Top management
support
• Publicize success
• Employee Services
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Methods of Managing Resistance to
Change



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Education & Communication
Participation
Negotiation
Top Management Support
Coercion
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Change Tools and Techniques
Results-Driven Change
General Electric Workout
Transition Management Team
Organizational Development
Change Agent
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Results-Driven Change

Creates quick change by focusing on
measurement and improvement of results

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

create measurable, short-term goals
use action steps likely to improve performance
importance of immediate improvements
consultants and staffers help managers
test actions steps to see if yield improvements
few resources required to get change started
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General Electric Three Day Workout
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Boss sets agenda and identifies targets, then
leaves
Outside facilitator works with sub-groups,
who debate solutions
“Town Meeting” on day three


subgroups make suggestions
boss must decide on the spot
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Transition Management Team (TMT)




A team of employees whose full-time job is
managing change
Anticipate and manage employee reactions
to change
Top management determines change
initiatives
TMT accomplishes those initiatives
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Organizational Development (OD)



A philosophy and collection of planned
change interventions
Designed to ensure organizations long-term
survival
Change Agent


the person formally charged with guiding a
change effort
can be internal or external person
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General Steps for OD Interventions
1.
Entry
A problem is discovered and the need for change becomes
apparent. Search begins for someone to deal with the problem and
facilitate change.
2.
Start-up
A change agent enters the picture and works to clarify the problem
and gain commitment to a change effort.
3.
Assessment
and
Feedback
The change agent gathers information about the problem and
provides feedback about it to decision makers and those affected by
it.
4.
Action
Planning
The change agent works with decision makers to develop an action
plan.
5.
Intervention
The action plan, or organizational development intervention, is
carried out.
6.
Evaluation
The change agent helps decision makers assess the effectiveness
of the intervention.
7.
Adoption
Organizational members accept ownership and responsibility for the
change, which is then carried out through the entire organization.
8.
Separation
The change agent leaves the organization after first ensuring that
the change intervention will continue to work.
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Types of OD Interventions
Large System


Sociotechnical Systems
Survey Feedback
Small Group


Team Building
Unit Goal Setting
Person-Focused


Counseling/Coaching
Training
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What Really Works?
Change the Work Setting or Change the
People?
Changing the Work Setting
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 55%
Changing the People
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 57%
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What Really Works? (Cont’d.)
Change the Work Setting or Change the
People? Do Both!
Changing Individual Behavior &
Organizational Performance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success
76%
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Managing Conversations to Initiate Change
Initiate
Conversation:
Starting a
Change
Potential
Breakdown:
Nothing Happens
Potential
Breakdown:
Unclear Conditions
of Satisfaction
Potential
Breakdown:
Omitting Closure
Conversations for
Closure:
Completing the
Change
Conversations
for Understanding:
Generating
Understanding
Potential
Breakdown:
Agreement Isn’t
Action
Lack of Rigor
Adapted from
Exhibit 10.13
Conversations for
Performance:
Getting into
Action
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What Not to Do When Leading
Change
Unfreezing
Change
Refreezing
• Not establishing a
great enough
sense of urgency
• Not creating a
powerful enough
guiding coalition
•Lacking a vision
•Declaring victory
•Undertoo soon
communicating the •Not anchoring the
vision by a factor of changes in the
ten
corporation’s
•Not removing
culture
obstacles to the
new vision
•Not systematically
planning for &
creating short-term
wins
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What Really Happened?
Product Innovation at Kimberly-Clark


Kimberly-Clark creates a stream of its own
innovative ideas year after year
Developed Cottonelle Fresh Rollwipes,
“premoistened” toilet paper



disperses or breaks apart in water
protected by 30 patents
Significantly improves technology
existing personal care products
behind
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