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Chapter 11: Managing Change and Innovation

Organizational change
Adoption of a new idea or behavior by an organization
Why do people resist change?
-Lack of understanding and trust
-Different assessments and goals
Biggest obstacle to organizational change
Fear of personal loss
Disruptive Innovation
Innovations in products or services that typically start small and end up completely replacing an existing product or service technology for producers and consumers
Reverse Innovation
Creating innovative, low-cost products for emerging markets and then quickly and inexpensively repacking them for sale in developed countries.
Ambidextrous Approach
Incorporating structures and processes that are appropriate for both the creative impulse and for the systematic implementation of innovations
Product change
change in the organization’s product or service outputs. Primary way organizations adapt to changes in markets, tech, and competition
Technology changes are designed to…
make the production of a product or service more efficient
Three strategies for changing technologies and products
Exploration: Creativity, new ideas
Innovative roles: new ideas are carried forward for acceptance and implementation
Generation of novel ideas that might meet perceived needs or respond to opportunities for the organization
Research shows that successful innovations are often accompanied by…
a high rate of failure
Who are the top three innovative companies?
Nike, Amazon, and Square
Bottom-up Approach
Encouraging the flow of ideas from lower levels and making sure that they get heard and acted upon by top executives
On average, a U.S. employee’s ideas are implemented only once every…
six years
Idea Incubator
Mechanism that provides a safe harbor where ideas from employees throughout the company can be developed without interference from company bureaucracy or politics
What does keeping research and manufacturing close together help companies do?
Be more innovative
Innovative Company Characteristics
-People in research/marketing actively work with customers
-Tech. specialists are aware of recent developments and make use of new tech
-Shared new product development process is advocated/supported by top management and cuts across functions
-Each project has a core cross-functional team
Horizontal Linkage Model (Internal)
-Research, manuf., sales, and marketing departments simultaneously contribute to new products and technologies
-Important in a high-pressure environment
80% of successful innovators…
periodically test and validate customer preferences during development of new products and services
Open innovation (External)
Extending the search for and commercialization of new ideas beyond the boundaries of the organization and even beyond the boundaries of the industry, sharing knowledge and resources with other organizations and individuals outside the firm
Using the internet to allow thousands of people to contribute to the innovation process
Innovation by acquisition
-Buy start-up companies to obtain the innovative products and services and talent
-Recognizes the cutting edge of innovation in young, small companies
Idea Champion
Person who sees the need for and champions productive change within the organization
Managers can influence entrepreneurship by…
-Supporting entrepreneurship activities
-Giving employees autonomy
-Rewarding learning and risk-taking
New-Venture Team
Unit separate from the rest of the organization that is responsible for developing and initiating a major innovation.
-Small, loosely structured, flexible
-Type of new-venture team
-Separate, small, informal, highly autonomous, secret groups
-Focuses on breakthrough ideas
The original skunkworks was created by…
Lockheed Martin
New-venture Fund
Provides resources to develop new ideas, products, or businesses
-support from senior managers are important
People Change
Concerns just a few employees, such as sending a handful of middle managers to a training course to improve their leadership skills
Culture Change
Pertains to the organization as a whole
Two tools to help culture change
Training and Development, and organizational development (OD)
Organizational Development
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
Problems that OD helps address
-Organizational decline/revitalization
-Conflict management
OD Activities
Survey Feedback
Large-group Intervention
Traditional Organizational Development Model
-Specific problem or group
-Distrib. = limited
-time frame is gradual
-learning is individual, small groups
Large-Group Intervention Characteristics
-Focuses on entire system
-Distrib = widely shared
-time frame is fast
-learning is whole organization
OD Steps
1) Unfreezing
2) Changing
3) Refreezing
-Makes people be aware of problems and need for change
-Establishes sense of urgency
-Uses a diagnosis and change agent
Change agent
OD specialist that performs a systematic diagnosis of the organization and identifies work-related problems
Changing stage of OD
-Individuals experiment with new behavior and skills (intervention)
-Involves emotion and logic
-When individuals acquire new attitudes or values and are rewarded by the firm
-New behaviors and evaluated and reinforced
Need for change
Disparity between existing and desired performance levels
Force-field Analysis
-Kurt lewin
-Change is result of the competition between driving and restraining forces
-Driving: problems/opps that motivate change in firm
-Restraining: Barriers to change
Implementation Tactics
-Top Management Support
-Communication and Education
Top management support is especially important when…
A change involves multiple departments or when resources are being reallocated among departments
Communication, Education
-Change is technical
-Users need accurate info and analysis to understand change
-Need to feel involved
-Design requires info from others
-Users have power to resist
-Group has power over implementation
-Group will lose out in the change
-A crisis exists
-Initiators clearly have power
-Other implementation techniques have failed
-Last resort

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