Managing Change and Innovation Chapter 11 Managing Change and Innovation

Introduction If organizations don’t successfully change and innovate, they die

Innovation and the Changing Workplace The adoption of a new idea or behavior by an organization Change and innovation can come from outside forces Managers want to initiate change from the inside Disruptive innovation is a goal for global competition

Innovation and the Changing Workplace Change is not easy Ambidextrous approach: Incorporating structures and processes that are appropriate for: Creative impulse and for the systematic implementation Managers encourage flexibility and freedom to innovate

Changing Things: New Products and Technologies Product change – a change in the organization’s product or service outputs Technology change – a change in the organization’s production process Three innovation strategies: exploration, cooperation, and entrepreneurship

11.1 Three Innovation Strategies

Exploration Creativity – novel ideas that meet perceived needs or offer opportunities Idea incubator – a safe harbor where employees can develop ideas without interference from company bureaucracy or politics

11.2 Characteristics of Creative People and Organizations

11.3 The World’s Most Innovative Companies 2013

Cooperation Internal coordination Horizontal linkage model – simultaneously contribute to new products and technologies External coordination Includes customers and partners, suppliers Open innovation – commercialization of ideas beyond the organization

11.4 Coordination Model for Innovation

Innovation Roles Managers should support entrepreneurship activities and foster idea champions Energy and effort is required to promote a new idea Sponsors approve and protect ideas when critics challenge the concept

Innovation Roles New-venture teams give free rein to creativity Skunkworks are informal, autonomous, secretive groups that focus on breakthrough ideas New-venture funds provide resources for new ideas

Changing People and Culture Changes in how employees think Changes in mind-set People change = Training and development Culture change = Organizational development Large culture change is not easy

Training and Development Training – Frequently used approach to changing people’s mind-sets Training and development is emphasized for managers Behavior and attitudes will influence people and lead to culture change

Organizational Development Planned, systematic process of change using behavioral science Addresses three types of problems: Mergers and acquisitions Organizational decline and revitalization Conflict management

OD Activities Team-building activities Survey-feedback activities Large-group interventions OD Steps: Unfreezing Changing Refreezing

11.5 OD Approaches to Culture Change

Implementing Change Need for change Disparity between existing and desired performance levels Understand the resistance to change Self-interest Lack of understanding and trust Uncertainty Different assessments and goals

Force-Field Analysis Change is a result of the competition between driving and restraining forces Driving forces – problems or opportunities that provide motivation for change Restraining forces – barriers to change

11.6 Using Force-Field Analysis to Change from Traditional to Just-in-Time Inventory System

11.7 Tactics for Implementing Change