C11 Managing Change & Innovation

• Categories of organisational change

  • Changes in structure
  • Changing technology
  • Changes in people
• Changes in structure


  Alteration in authority relationships, coordination mechanisms, degree of centralization, job design, or similar variables
• Changes in structure


  • Restructuring can result in decentralization, wider spans of control, reduced work specialization, and work teams
• Changing technology


  Modifications to the way work is done or to the methods and equipment used
• Changing technology


  • Continuous improvement initiatives, which focus on developing flexible processes to support better-quality operations
• Changes in people


  Changes in employee attitudes, expectations, perceptions, or behaviors
• Changes in people


  • Employee education and training, performance evaluation, and a reward system that supports and encourages those improvements
• Three Innovation Strategies


  • Exploration
  • Cooperation
  • Innovation Roles
• Exploration


  Involves designing the organisation to encourage and initiation for new ideas - new products and technologies are born
• Exploration


  • Creativity: generation of novel ideas that might meet perceived needs or respond to opportunities for the organization
  • Bottom-up approach: encouraging the flow of ideas from lower levels (e.g. internal contests)
  • Idea incubator: safe harbor where employees' ideas can be developed without interference from company bureaucracy or politics
• Cooperation


  Creating conditions and systems to facilitate internal & external coordination and knowledge sharing
• Characteristics of innovative companies

  • Work with customers to understand needs and develop solutions
  • Use new technology effectively
  • Share new product development process supported by top management
  • Members from key departments cooperate in development of new product or service
  • Cross-functional team guides project from beginning to end
• Internal coordination


  Horizontal linkage model: research, sales, and marketing simultaneously contribute to new products and technologies
• External coordination


  • Open innovation: search for and commercialize new ideas beyond the organization and industry
  • Crowdsourcing: tap into ideas globally
  • Innovation by acquisition: buy startup companies
• Coordination Model for Innovation – Horizontal linkage model
• Innovation Roles


  • Idea champion: person who sees the need for and champions productive change within the organization
  • New-venture team: unit separate from the rest of the organization that is responsible for developing and initiating a major innovation
  • Skunkworks: separate, small, informal, autonomous, secretive group that focuses on breakthrough ideas for the business
  • New-venture fund: provides resources for new ideas, products, or businesses
• People change


  Changes to the mind-set of a few employees
• Culture change


  Changes to the mind-set of the organization as a whole
• Tools that smooth the culture change process

  • Training and development programs
  • Organization development
• Training


  Frequently used approach to changing people's mind-sets
• Training programs can be offered to large blocks of employees
• Managers' behavior and attitudes

  Will influence people and lead to culture change
• Organization development (OD)


  Planned, systematic process of change that uses behavioral science to improve organization's health and effectiveness through its ability to adapt to the environment, improve internal relationships, and increase learning and problem-solving capabilities
• OD addresses three types of problems

  • Mergers and acquisitions
  • Organizational decline and revitalization
  • Conflict management
• OD Activities


  • Team building: activities that enhance the cohesiveness and success of organizational groups and teams
  • Survey feedback: begins with an employee questionnaire, and then an OD consultant provides feedback to the employees regarding responses and problems identified from the responses
  • Large-group intervention: bringing together participants from all parts of the organization to discuss problems or opportunities and plan for change
• OD Steps to Behavioral and Attitudinal Change

  1. Unfreezing: employees become aware of the problem and the need for change

  2. Changing: individuals experiment with new behavior and learn new skills to be used in the workplace

  3. Refreezing: individuals acquired new attitudes or values and are rewarded for them by the organization
• Change agent


  OD specialist who diagnoses problems
• Implementation is the final step in the change process
• Why Do People Resist Change?

  • Self‑interest Conflicts
  • Lack of understanding and trust
  • Uncertainty
  • Different assessments and goals
  • Breaking routines
  • Incongruent to organisation system
• Self‑interest Conflicts


  A proposed change in job design, structure or technology may lead to a perceived loss of power, prestige, pay, or company benefits
• Lack of understanding and trust


  Employees often distrust management's intentions for the change or do not understand the intended purpose of a change
• Uncertainty


  Lack information about future events, fear of the unknown, especially threatening for employees who have a low tolerance for change and fear the unusual
• Different assessments and goals

  Employees who will be affected by innovation may assess the proposed change differently than an idea champion or new‑venture team
• Create a Sense of Urgency


  A problem or crisis lowers resistance to change, managers must help people feel the need for change – influence and persuade with rational reasons and picture of change
• Need for change


  A disparity between existing and desired performance levels
• 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
• Driving forces to Unfreezing the status quo & restrain forces - Internal & external forces - Frozen – sustained over time by Kurt Lewin OD
• Tactics for Implementing Change