Organizational Change and Innovation Chapter 10

Change Can be reactive or proactive Forces for change may consist of forces outside the organization  Demographic, characteristics, market changes, technological advancements, and social and political pressures

Two types of change Reactive: Making changes in response to problems or opportunities as they arise.  Putting out fires Proactive: Planned change, involves making carefully thought-out changes in anticipation of possible or expected problems or opportunities.

Changing technology  Not just computer technology, it is any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product.

Technology Not just a computer technology; it is any machine or process that enables an organization to gain a competitive advantage in changing materials used to produce a finished product.

The need for change Outside the Organization Demographic characteristics Market changes Technological advancements Social and political pressures Inside the Organization Employee problems Managers’ behavior (conflict)

Three Kinds of Change Adaptive Change – reintroduction of a familiar practice Innovative Change – the introduction of a practice that is new to the organization Radically Innovative Change – involves introducing a practice that is new to the industry

Lewin’s change model Unfreezing – creating the motivation to change Changing – learning new ways of doing things Refreezing – making the new ways normal

Kotter’s Eight Steps for Leading Organization Change 1. Establish a sense of urgency 2. Create the guiding coalition 3. Develop a vision and a strategy 4. Communicate the change vision 5. Empower broad based action 6. Generate short-term wins 7. Consolidate gains and produce more change 8. Anchor new approaches in the culture

Organizational Development A set of techniques for implementing planned change to make people and organizations more effective

Change Agent A consultant with a background in behavioral sciences who can be a catalyst in helping organizations deal with old problems in new ways.

What can organizational development be used for? Managing conflict Revitalizing organization Adapting to mergers

The Organization Development Process DIAGNOSISEVALUATIONINTERVENTION FEEDBACK

Intervention The attempt to correct the diagnosed problems.

Invention - creating or making up something new Creativity – the act of developing new and imaginative ideas into reality.

The seeds of innovation Hard work in a specific direction Hard work with direction change Curiosity Wealth and money Necessity Combination of seeds

Types of Innovation Product or Process Incremental or Radical

Product Innovation A change in the appearance or the performance of a product or a service or the creation of a new one.

Process Innovation A change in the way a product or service is conceived, manufactured, or disseminated.

Core Innovations The optimizing of products or services for existing customers.

Transformational Innovations The invention of breakthrough products or services that don’t exist yet and that are aimed at creating brand new markets and customers.

Four steps to foster innovation 1. Recognizing a problem (find a better way) 1. Recognize opportunity 2. Gain allies by communicating your vision 1. Showing how the product or service will be made 2. Showing how potential customers will be reached 3. Demonstrating how you’ll beat your competitors 4. Explaining when the innovation will take place

3. Overcome employee resistance and empower and reward them to achieve progress 4. Execute well

Resistance to change An emotional/behavioral response to real or imagined threats to an established work routine.

Trends shaping the future of business: The marketplace is becoming more segmented and moving toward more niche products  Retailers like Amazan.com and Apple Computer are not constrained by physical shelf space and offer consumers a much wider variety of products, yet small sales, one or two rather than millions of items at a time, can produce big profits

There are more competitors offering targeted products, requiring faster speed-to-market  Speed is emerging as the ultimate competitive weapon

Some traditional companies may not survive radically innovative change  Example: Kodak – sales dropped as digital cameras began to take their toll on the chemical- based film business

China, India, and other Offshore suppliers are changing the way we work.  Globalization and outsourcing are transforming whole industries and changing the way we work.