BM_08--revised

Chapter 8

Managing Change and Innovation

(c)2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Objectives• Define organizational change and explain

the forces driving innovation and change in today’s organizations

• Identify 3 innovation strategies that mangers implement for changing products and technologies

• Explain the value of creativity, idea incubators, horizontal linkages, open innovation, idea champions and new venture teams for innovation


Objectives• Discuss why changes in people and culture

are critical to any change process• Define organization development and large-

group interventions• Explain the organization development

stages of unfreezing, changing and refreezing

• Identify sources of resistance to change• Explain force-field analysis and other

implementation tactics that can be used to overcome resistance


New Manager’s Question 1

• When a company makes a new product, the main concern after that is marketing it well.

1 2 3 4 5

Mostly Yes Mostly No



• The most important thing for a company to be innovative is to encourage lots of creative ideas.

1 2 3 4 5




• Changing an organization is not as hard as people make out.

1 2 3 4 5



Innovation and Change in the Workplace

• The 1990 Knowledge Economy is turning into the Creativity Economy

• Change comes from inside/outside forces• Organizations can initiate change• Change must be embraced• Successful companies innovate


Organizational Change

• The adoption of a new idea or behavior by an organization

• Organizations must be ambidextrous– Incorporating structures and processes for

creativity and innovation

• Managers encourage flexibility and freedom to innovate and propose new ideas


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.– Designed to make the production of a product

or service more efficient


3 Critical Innovation Strategies• Exploration– Involves designing the organization to

encourage creativity and the initiation of new ideas

– Stage where ideas for new products & technologies are born

– Managers establish conditions that encourage creativity & allow new ideas to spring forth

– Creativity – novel ideas that meet perceived needs or offer opportunities

– Idea incubator – a safe harbor where employees can develop ideas


Characteristics of Creative People and Organizations


The World’s Most Innovative Companies


3 Critical Innovation Strategies• Cooperation– Creating conditions and systems to facilitate

internal & external coordination and knowledge sharing

– 3 characteristics of innovative companies• People in marketing have a good

understanding of customers needs• Technical specialists are aware of recent

technological developments & make effective use of new technology• Members from key depts. cooperate in the

development of the new product or service


Cooperation• Horizontal linkage model – people from

several depts meets frequently in teams & task forces to share ideas & solve problems.

• Fast-cycle team – multifunctional team that works under stringent timelines

• Open innovation – extending the search for & commercialization of ideas beyond the organization.


Coordination Model for Innovation


3 Critical Innovation Strategies• Entrepreneurship– Put in place processes and structures to ensure

that new ideas are carried forward for acceptance and implementation

– Mangers give employees a degree of autonomy by rewarding learning and risk taking

– Foster idea champions• Person who sees the need for & champions

productive change within the organization


Four Roles in Organizational Change


3 Critical Innovation Strategies• Entrepreneurship– Facilitated through a new-venture team• Unit separate from the rest of the organization• Responsible for developing & initiating a major

innovation– Variation of new-venture team – skunkworks• Separate small, informal, highly autonomous and

often secretive group that focuses on breakthrough ideas for the business

– Related idea – new-venture fund• Provides resources from which individuals & groups

can draw to develop new ideas, products or businesses


Three Critical Innovation Strategies


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

• Offer training programs– Teamwork, diversity, emotional intelligence,

etc.

• Emphasize training managers in the hope that the managers’ behavior & attitudes influence others


Organizational Development

• Planned, systematic process of change using behavioral science to improve an organization’s health & effectiveness

• Addresses three types of problems: Mergers and acquisitions Organizational decline and revitalization Conflict management


• Team-building activities

• Survey-feedback activities

• Large-group interventions

• There is a difference between the traditional model & large group intervention

OD Activities


OD Approaches to Culture Change


• Unfreezing – participants must be made aware of problems & be willing to change– Change agent – OD specialist – performs a

systematic diagnosis of the organization to identify work-related problems

• Changing – individuals experiment with new behavior & learn new skills (intervention)

• Refreezing – individuals acquire new attitudes or values & are rewarded for them

OD Steps


Implementing Change

• Outline the Need for Change– Show the performance gap – disparity between

existing & desired performance levels

• Understand the Resistance to Change– Self-Interest – fear of personal loss

– Lack of Understanding and Trust – intentions/purpose

– Uncertainty – lack of information about future events

– Different Assessments and Goals – individuals affected


Force-Field Analysis

• Driving forces – problems or opportunities that provide motivation for change

• Restraining forces – barriers to change


Tactics for Overcoming Resistance to Change

BM_08--revised

Business

Transcript of BM_08--revised