Ch 10 Organizational Innovation

Innovative Team Members Mathew Lu – Strategy Role of Change Technology Change Technology Change Ann Zerlina – New Products and Service Strategy and Structure Change Strategy and Structure Change Tianyou Man – Culture Change Strategies for Implementing 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 8. BYD 比亞廸 ( the first Chinese company to make the list ) 9. General Electric 10. Sony I have invested BYD. ha ha

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 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: 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. Hello, I create FIGHTERs.

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 Ideas33 Developed Projects28 Pass All Testing24 Fully Commercialized14 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 -> changes in corporate cultural values and norms -> lead to renewed commitment & empowerment of employee -> lead to renewed commitment & empowerment of employee -> stronger bond between company & customers -> stronger bond between company & customers

Culture Change What are the Forces for culture change? Mergers and acquisitions Mergers and acquisitions Reengineering & Shift to Horizontal Organization Reengineering & Shift to Horizontal Organization Diversity Diversity Emphasis on learning and adaptation 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 focuses on the human and social aspects to adapt and solve problems OD uses knowledge and techniques to create a learning environment OD uses knowledge and techniques to create a learning environment OD interventions involve training of specific groups 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, Key stakeholders from inside and outside, Off-site to limit interference and distractions Off-site to limit interference and distractions Team Building PP working together as a team to discuss, overcome problems PP working together as a team to discuss, overcome problems Training task forces, committees, etc. Training task forces, committees, etc. Interdepartmental Activities Representatives gather in a neutral location to expose problems or conflicts 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 innovation champion—reinforce value and importance of innovation set up the tone for adaptation set up the tone for adaptation Transformational leadership style Transformational leadership style

Strategies for Implementing Change What will employees feel and act when facing changes? -- Curve of change for psychological process -- Curve of change for psychological process Barriers

Strategies for Implementing Change What’s the Barriers to Change? Excessive focus on costs Excessive focus on costs Failure to perceive benefits Failure to perceive benefits Lack of coordination and cooperation Lack of coordination and cooperation Uncertainty avoidance Uncertainty avoidance Fear of loss Fear of loss

Strategies for Implementing Change What’s the Techniques for Implementation? Establish a sense of urgency for change Establish a sense of urgency for change Establish a coalition to guide the change Establish a coalition to guide the change Create a vision and strategy for change Create a vision and strategy for change Find an idea that fits the need Find an idea that fits the need Create change teams Create change teams Foster idea champions Foster idea champions

Strategies for Implementing Change What’s the Techniques for Overcoming Resistance? Alignment with needs and goals of users Alignment with needs and goals of users Communication and training Communication and training An environment with psychological safety An environment with psychological safety Participation and involvement Participation and involvement Forcing and coercion Forcing and coercion

Design Essentials Change, not stability, is the challenge for managers Change, not stability, is the challenge for managers There are four types of change There are four types of change Organic structures can foster innovation, a top-down approach is best for change and strategy 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 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 – Information sharing not only allows for feedback but helps idea generation  Spark with Imagination, fuel with data – Allow for free thinking, but test along the 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: 4&NR=1&feature=endscreen 4&NR=1&feature=endscreen 4&NR=1&feature=endscreen Google Self-Driving Car: UE UE UE Google Street View: dU dU dU

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