1. Chapter 10 Innovation and Change

2. Purpose of the Chapter Discuss how organizations change How managers can direct the innovation and change process Discuss the Role of Change Discuss the different types of change Discuss organizational structure and management techniques for influencing implementation and creation of change

3. What is change?

4. Role of Change Adapting to change is necessary for survival Importance of IT Recent trends -> Horizontal Structures

5. Incremental Vs. Radical Change

6. Strategic Types of Change Product and Service Strategy and Structure Culture Technology The types of changes are interdependent Environmental Changes

7. Group Activity The iPhone 6s Vertical to Horizontal Structure Creation of Ebay Creation of Sales Team Creation of a company soccer team

8. Group Activity The iPhone 6s – Incremental Product Change Vertical to Horizontal Structure – Radical Structure Creation of Ebay – Radical Service Creation of Sales Team – Incremental Strategy/Structure Creation of a company soccer team – Incremental Culture

9. Elements for Successful Change

10. Technology Change The Great Contradiction Ambidextrous Approach

11. Techniques for Encouraging Technology Change Switching Structures Separate Creative Departments Venture teams Corporate Entrepreneurships

12. New Products and Services Change Changing the current product or services is a special case of innovation uncertainty Based in technology of an organization

13. Success Rates 80% of new products fail upon introduction and another 10% disappear within 5 years. o Risky o (1994) study of 19 chemical, drug, electronics, and petroleum labs about success rates… success: new product had to pass 3 stages of development: technical completion, commercialization and market success.

14. Product Success Study called SAPPHO looked at 17 pairs of new product innovations with one success and one failure in each pair: o Successful innovating companies paid more attention to market and customers, made use of external advice and resources, and there was good top management support

15. Horizontal Coordination Model · Organizational design for successful product creation deals with internal communication and information sharing. 4 components: specialization, boundary spanning, and horizontal coordination

16. Specialization, Boundary Spanning Specialization There are key departments in the creation of a new product – the marketing, R&D, and the production departments o departments need to have special skills Boundary Spanning This deals with the external environment and the use of resources (boundary – outside). ·

17. Horizontal Coordination Information sharing o R&d share new technologies o Marketing people provide information on customers needs, desires, and complaints o Production – both marketing and r and d work with the production department o Cross functional teams

18. Horizontal Coordination Model

19. Why does this matter? Better chance of product success Better opportunity for different ideas

20. Achieving Competitive Advantage: the need for speed Adaptability, able to anticipate change Horizontal flow of information vs sequence Time based competition

21. Fast Cycle Teams Used to complete projects under very quick deadlines. They Used on highly important projects to deliver product or services faster than competitors Multifunctional and multinational Multinational – understanding produced trends globally, meeting diverse needs of people around the world.

22. Strategy and structure change Shift towards more horizontal structures (radical change) · Trends: o Companies changing to virtual network strategies and structures o Process of the change is different from new product or service change

23. Dual Core Approach Compares administrative and technical changes Administrative: the design and structure or the organization o Occurs less frequently than technical changes Identifies unique process of administrative change Each core has its own center for innovations

24. Organizational design for implementing administrative changes Administrative innovations - mechanistic technical innovations- organic

25. Administrative Change or Technical Change

26. Dual Core Approach Con’t. Types of organizations with two cores: (technical and administrative) hospitals, schools, welfare agencies etc. each core has own employees, tasks and environmental changes important for non-profit organizations

28. Why does this matter? Change identification G.S.S alignment Successful Implementation of change

29. Culture Change a change in the values, attitudes, expectations, beliefs, abilities, and behaviour of employees fundamentally shifts how work is done in an organization can lead to a renewed commitment and empowerment of employees can lead to a stronger bond between the company and its customers

30. Forces for Culture Change Re-engineering and Horizontal Organizing Diversity The Learning Organization

31. Organization Development Interventions for Culture Change Organization Development: a method of bringing about culture change which focuses on the human and social aspects of the organization as a way to improve the organization’s ability to adapt and solve problems Emphasizes the values of human development, fairness, openness, freedom from coercion, and individual autonomy Techniques: Large Group Intervention Team Building Interdepartmental Activities

32. Strategies for Implementing Change implementation is the most important part of the change process, but also the most difficult change is frequently disruptive and uncomfortable for managers and employees Leadership for Change Barriers to Change Techniques for Implementation

33. Leadership for Change develop the personal qualities, skills, and methods needed to remain competitive Change Leaders Continually growing need for change and the need for leaders who can successfully manage change Starts from the top management leadership style Transformational Leadership Clear and concise vision

34. Leadership for Change (cont’d) Three stages of the change commitment process Preparation Acceptance Commitment Installation Institutionalization

35. Barriers to Change Excessive focus on costs Failure to perceive benefits Lack of coordination and cooperation Uncertainty avoidance Fear of loss

36. Techniques for Implementation Establish a sense of urgency for change Establish a coalition to guide the change Create a vision and strategy for change Find an idea that fits the need Create change teams Foster idea champions Develop plans to overcome resistance for change

37. Techniques for Implementation Develop plans to overcome resistance to change: Alignment with needs and goals of users Communication and training An environment that affords psychological safety Participation and involvement Forcing and coercion

38. Kurt Lewin’s Change Model (3 Phases) Stage 1: Unfreezing Stage 2: Changing Stage 3: Refreezing The Force-field Analysis Technique