CH 10 Organizational Innovation

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Ch 10
Organizational
Innovation
Innovative Team
Members
Mathew Lu – Strategy Role of Change
Technology Change
Ann Zerlina – New Products and Service
Strategy and Structure Change
Tianyou Man – Culture Change
Strategies for Implementing Change
Luke Driscoll – Case Study: Google
AGENDA
The Strategic Role of Change
Elements for Successful Change
Four Types of Change
Technology change / New Products and Services
Strategy and Structure change / Culture change
Strategies for Implementing Change
Case Study
The Strategic Role of Change
The Top 10 Most Innovative
Companies in the world
1.
Apple
2. Google
3. Microsoft
4. IBM
5. Toyota
6. Amazon
7. LG Electronics
I have
invested
BYD . ha ha
8. BYD 比亞廸 ( the first
Chinese company to make the
list )
9. General Electric
10. Sony
Four Types of Change Provide
a Strategic Competitive Wedge
Elements for Successful Change
Technology Change
In today’s business world , any company
that isn’t continually developing , acquiring ,
or adapting new technology will likely be
out of business in a few years.
In organic organizations , employees are
encouraged to promote new ideas but they
are not better for implementing those
ideas for routine production than
mechanistic structure employees.
How to solve the Dilemma ??
The Ambidextrous (雙面靈活)
Approach
Techniques for Encouraging Technology Change
Switching Structures – create an organic
structure when needed for creating new
ideas.
EX:
The NUMMI plant in California from 1984 to 2012 .
Created { Pilot team } , to design production
processes for new car and truck models. When
the model moved into production , workers
returned to their regular jobs on the shop floor.
Techniques for Encouraging Technology Change
Creative Departments – department for
innovation , such as R&D , design , systems
analysis department.
EX:
Yahoo , Boeing and other companies establish
creative departments called { Idea Incubator } ,
to develop new ideas without interference from
company bureaucracy or politics.
Techniques for Encouraging Technology Change
Venture Teams – a small company within the
organization , often given a separate location
and facilities to free from firm’s procedures.
EX:
Hello , I
create
FIGHTERs.
Lockheed Martin set up { skunkworks } more than
50 years , that is a separate , highly autonomous and
often secretive group which focuses on
breakthrough ideas for the business.
Techniques for Encouraging Technology Change
Corporate Entrepreneurship – promote
entrepreneurial spirit , may involve the use
of creative departments and new venture
teams , but it also attempts to release the
creative energy of all employees in the
organization.
EX: Texas Instruments
studied believing in the
idea and convincing
others of its value decide
the success of the idea.
Techniques for Encouraging Technology Change
Bottom-up Approach – useful ideas come
from people and daily work , and make sure
they get heard and acted by top executives.
EX : IBM held an online town-hall style meeting ,
called the { Innovation Jam } , inviting
employees , clients , consultants , and
employees’ family members to an interactive
online brainstorming session about new
technology ideas.
New Product and
Services
New products and services are a special case of
innovation
New products uncertainty and success of an
innovation is very high.
New Product Success Rate
100 Ideas
33 Developed Projects
28 Pass All Testing
24 Fully Commercialized
14 Succeed in Marketplace
Reasons for New Product Success
Why are some products more successful than others?
Reasons for New Product Success
Tailoring innovations to customer needs
Making effective use of technology
Having influential top managers support
These idea taken together indicate that the effective
design for new product innovation is associated with
horizontal coordination across departments
Horizontal Coordination Model
Specialization
Key departments – R&D, marketing and production
Specialization component –
the personnel in all three
of these departments are
highly competent at their
own tasks
Boundary Spanning
Each department involved with new products has
excellent linkage with relevant sectors in the external
environment
Ex :
Horizontal Coordination
Technical, marketing and production people share
ideas and information
Ex :
Corning used a horizontal linkage model to create a
new product for the mobile phone industry
Open Innovation
Extending the search for and commercialization of
new products beyond the boundaries of
the
organization and even beyond the boundaries of the
industry
Requires the involvement of people from different
areas of the company, it forces managers to set up
stronger internal coordination and knowledge-share
mechanisms
Strategy and Structure Change
All organizations need to make changes in their
strategies, structures, processes, and procedures
more often to adapt to new competitive demands
Achieving Competitive Advantage:
The Need for Speed
The rapid development of new
products and services can be a major
strategic weapon in an ever-shifting
global marketplace.
Time based competition – delivering
products and services faster than
competitors
Many companies use fast cycle teams
to support highly important projects
and deliver product and services faster
than competitors
Strategy and Structure Change
Many organizations are preparing for more change by
- Cutting out the layers
- Decentralization decision making
- shift toward horizontal structures
- Empowered teams and workers
- Virtual network strategies
- Incorporating e Business
The Dual-Core Approach
The dual-core approach to organizational change compares
management and technical innovation.
Management innovation refers to the adoption and
implementation of a management practice, process, structure,
strategy, or technique that is new to organization and is
intended to further organizational goals.
The point of the dual-core approach is that many organizations
– especially nonprofit and government organizations – must
adopt frequent management changes and need to be
structured differently from organizations that rely on frequent
technical and product changes for competitive advantage
The Dual-Core Approach
Organization Design for
Implementing Management Change
What about business organization that are normally
technologically innovative in bottom up fashion but
suddenly face a crisis and need to reorganize?
Ex :
Organization Design for
Implementing Management Change
Top-down changes related to restructuring and
downsizing can be painful for employees
Top managers should move quickly, authoritative and
humane
Top-down change means initiation of the idea occurs
at upper levels and is implemented downward, but it
does not meant that lower level employees are not
educated about the change or allowed to participate
in it
Culture Change
What is culture change?
Refers to changes in the values, attitudes,
expectations, beliefs and behavior of
employees.
Why we bring culture into the needs for
change?
Any change eventually involves changes in
people
Culture Change
What are the effects of culture change?
 -> changes in corporate cultural values
and norms
 -> lead to renewed commitment &
empowerment of employee
 -> stronger bond between company &
customers
Culture Change
What are the Forces for culture change?
 Mergers and acquisitions
 Reengineering & Shift to Horizontal
Organization
 Diversity
 Emphasis on learning and adaptation
Culture Change
How to bring about Culture Change? -Organizational development (OD) Culture
Change Intervention
 OD focuses on the human and social aspects
to adapt and solve problems
 OD uses knowledge and techniques to
create a learning environment
 OD interventions involve training of specific
groups
So, what are the techniques for improving
people skills through OD?
Culture Change
Large Group Intervention
 Key stakeholders from inside and outside,
 Off-site to limit interference and distractions
Team Building
 PP working together as a team to discuss,
overcome problems
 Training task forces, committees, etc.
Interdepartmental Activities
 Representatives gather in a neutral location to
expose problems or conflicts
Strategies for Implementing
Change
What’s the role of Leadership for Change?
 innovation champion—reinforce value and
importance of innovation
 set up the tone for adaptation
 Transformational leadership style
Strategies for Implementing Change
What will employees feel and act when facing changes?
-- Curve of change for psychological process
Barriers
Strategies for Implementing
Change
What’s the Barriers to Change?
 Excessive focus on costs
 Failure to perceive benefits
 Lack of coordination and cooperation
 Uncertainty avoidance
 Fear of loss
Strategies for Implementing
Change
What’s the Techniques for Implementation?






Establish a sense of urgency for change
Establish a coalition to guide the change
Create a vision and strategy for change
Find an idea that fits the need
Create change teams
Foster idea champions
Strategies for Implementing
Change
What’s the Techniques for Overcoming
Resistance?





Alignment with needs and goals of users
Communication and training
An environment with psychological safety
Participation and involvement
Forcing and coercion
Design Essentials
 Change, not stability, is the challenge for
managers
 There are four types of change
 Organic structures can foster innovation, a
top-down approach is best for change and
strategy
 The implementation of change can be
difficult, managers must lead and force it
Case Study – Innovation
at Google
Company Profile
Founded and Incorporated
in 1998 by Larry Page and
Sergey Brin
Headquarters in Mountain
View, California
55,000 employees, offices
in over 60 countries, and
services in 130 languages.
“We need flexible thinkers,
because the problems change,
too.”
-Bill Courgran
Google`s Eight Pillars
Have a mission that
MATTERS – “To organize the
worlds information and
make it universally useful
and accessible.”
Think big but start small –
Google Books and Ad Sense
8 Pillars – (cont.)
Strive for continual
innovation, not
perfection - Genius is
one percent inspiration and
ninety-nine percent
perspiration. –Thomas A.
Edison
Look for ideas
everywhere –
“Everywhere”
8 pillars - (cont.)
Share everything –
 Spark with Imagination, fuel
Information sharing not
with data – Allow for free
only allows for feedback
thinking, but test along the
but helps idea generation
way, i.e. Results per page
8 Pillars – (cont.)
Be a platform –
Crowdsourcing and
Open Technologies
Never fail to fail – learn
from mistakes, and
know that they may be
potential solutions for
other problems
`20 percent time`
Innovation at Google is
focused on
technological
development and
centers around its
engineers.
`20 percent time`
The Ideas Meeting – The
Approval Meeting
Challenges and
Solutions
Technology Changes –
Ambidextrous Approach:
Acquisitions, `20 Percent
Time`,
New Products and Services –
Horizontal: Iteration, Data,
Strategy and Structure –
From Services to Products
Cultural – Marrying the Geeks
and the Business People
Projects and
Innovations
Some of the current projects and innovations that
Google has developed or is developing:
Google Glasses:
http://www.youtube.com/watch?v=JSnB06um5r
4&NR=1&feature=endscreen
Google Self-Driving Car:
http://www.youtube.com/watch?v=cdgQpa1pU
UE
Google Street View:
http://www.youtube.com/watch?v=PTeCqnBuD
dU
Questions
Comments
Sources
http://www.thinkwithgoogle.com/quarterly/innovation/8-pillars-ofinnovation.html
http://www.fastcompany.com/3000500/what-google-gets-others-don’tinnovation-evolves-customers
http://www.forbes.com/sites/quentinhardy/2011/07/16/googles-innovationand-everyones/
http://www.mckinseyquarterly.com/Googles_view_on_the_future_of_busi
ness_An_interview_with_CEO_Eric_Schmidt_2229
http://www.businessweek.com/stories/2005-10-02/managing-googles-ideafactory
http://www.youtube.com/watch?v=EHy9JirbDdA#t=11m10s
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