Innovation and Change Chapter 8 Chapter 8 Innovation and Change © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Learning Objectives Define organizational change and explain the forces for change. Describe the sequence of four change activities that must be performed for change to be successful. Explain the techniques managers can use to facilitate the initiation of change in organizations, including idea champions, new-venture teams, idea incubators, and open innovation. Define the sources of resistance to change. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Learning Objectives (contd.) Learning Objectives (contd.) Explain force-field analysis and other implementation tactics that can overcome resistance to change. Discuss the differences among technology, product, structure, and culture/people changes. Explain the change processes – bottom up, top down, horizontal – associated with each type of change. Define organizational development and large-group interventions. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Two Types of Planned Change Two Types of Planned Change Incremental Change based on efforts to improve basic work and organizational processes. Transformational Change involves redesign and renewal of the total organization. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Ex. 8.1 Model of Change Sequence of Events Ex. 8.1 Model of Change Sequence of Events Environmental Forces Monitor global competition, customers, competitors, and other factors. Need for Change Initiate Change Implement Change Evaluate problems and opportunities, define needed changes in technology, products, structure, and culture. Internal Forces Facilitate search, creativity, idea champions, skunkworks, and idea incubators. Use force-field analysis, tactics for overcoming resistance. Consider plans, goals, company problems, and needs. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Need for Change Based on external or internal forces. Need for Change Based on external or internal forces. Performance gap—a disparity between existing and desired performance levels. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Initiating Change -- Search Initiating Change -- Search The process of learning about current developments inside or outside the organization that can be used to meet a perceived need for change © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Initiating Change -- Creativity Initiating Change -- Creativity The generation of novel ideas that may meet perceived needs or offer opportunities for the organization. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Idea Champion A person who sees the need for and champions productive change within the organization. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Promoting Corporate Innovation Promoting Corporate Innovation New-Venture Teams Skunkworks Idea Incubator © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Resistance to Change Managers and employees often seem to prefer the status quo. Self-Interest: the fear of personal loss is perhaps the biggest obstacle to organizational change. Lack of Understanding and Trust: do not understand the intended purpose of a change, or distrust the intentions. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Resistance to Change (contd.) Resistance to Change (contd.) Uncertainty: the lack of information about future events. Different Assessments and Goals: people who will be affected by innovation may assess the situation differently. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Ex.8.4 Using Force-Field Analysis to Change from Traditional to Just-In-Time Inventory System © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Ex. 8.6 Types of Organizational Change Ex. 8.6 Types of Organizational Change Technology Strategy Structure Products Culture/People SOURCE: Based on Harold J. Leavitt, “Applied Organizational Change in Industry: Structural, Technical, and Human Approaches,” in New Perspectives in Organization Research, ed. W. W. Cooper, H. J. Leavitt, and M. W. Shelly II (New York: Wiley, 1964), 55-74. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Technology Change Related to organization’s production process. Technology Change Related to organization’s production process. Designed to enhance efficiency. Generally “Bottom-Up.” © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Tools for Changing People & Culture Tools for Changing People & Culture Training and development programs. Organizational development. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Organizational Development Organizational Development … is a planned, systematic process of change that uses behavioral science knowledge and techniques to improve an organization’s health and effectiveness through its ability to adapt to the environment, improve internal relationships, and increase learning and problem-solving capabilities. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Organizational Development (contd.) Organizational Development (contd.) Can help managers address: mergers/acquisitions. organizational decline/revitalization. conflict management. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Achieving Behavioral and Attitudinal Change Unfreezing: diagnosis stage. participants are made aware of problems in order to increase their willingness to change their behavior. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Achieving Behavioral and Attitudinal Change (contd.) Achieving Behavioral and Attitudinal Change (contd.) Changing: intervention stage. individuals experiment with new workplace behavior. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.

Achieving Behavioral and Attitudinal Change (contd.) Achieving Behavioral and Attitudinal Change (contd.) Re-freezing: reinforcement stage. individuals acquire a desired new skill or attitude and are rewarded for it by the organization. © 2006 by South-Western, a division of Thomson Learning. All rights reserved.