chapter 7 innovation and change ideoembrace cowboys vs farmers

Chapter 7

Innovation and Change

IDEO Embrace

Cowboys vs Farmers

Learning OutcomesAfter reading this chapter, you should beable to:

1. Explain why innovation matters to companies.2. Discuss the different methods that managers

can use to effectively manage innovation in their organizations.

3. Discuss why not changing can lead to organizational decline.

4. Discuss the different methods that managers can use to better manage change as it occurs.

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Class Activity

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Beyond the Book

• What does this brainteaser have to do with innovation?

• Discuss.

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Class Activity: Connect the DotsBeyond the Book

Cowboys vs Farmers

Why Innovation Matters

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Organizational Change: a difference in the form, quality, or condition of an organization

over time

TechnologyCycles

InnovationStreams

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Technological Innovation and S-Curves

• Technology cycle: a cycle that begins with the “birth” of a new technology and ends when that technology reaches its limits and is replaced by a newer, better technology

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Technological Innovation and S-Curves

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Class Activity: Technology Innovation Awards

• Watch the video: New Technology Awards.• Discuss the importance of technology

innovation in the business world.

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Beyond the Book

Embrace

Innovation Streams

• Patterns of innovation over time that can create sustainable competitive advantage.

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Technological Discontinuity

• A scientific advance or unique combination of existing technologies that creates a significant breakthrough in performance or function

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Innovation Streams: Technology Cycles Over Time

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Managing Innovation

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1. Managing Sources of Innovation

2. Managing during DiscontinuousChange

3. Managing during Incremental Change

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Managing Innovation:Components of Creative Work

Environments

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Managing Innovation during Discontinuous Change

Experiential approach to innovation• Innovation is occurring within an uncertain

environment.• The key to innovation is to use:

– intuition– flexible options– hands-on experience

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Experiential Approach to Innovation

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Design Iteration

Prototype

TestingMilestones

Multifunctional Teams

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Managing Innovationduring Incremental Change

Compression Approach:• Assumes that innovation

is a predictable process that can be planned in steps

• Examples: Xbox 360, Nintendo Wii

Generational Change:• Based on incremental

improvements to a dominant technological design and achieving backward compatibility with older technology

• Example: Harry Potter films

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Compression Approach to Innovation

Planning

Supplier Involvement

Shortening Time of Individual

Steps

Overlapping Steps

Multifunctional Teams

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Five Stages of Organizational Decline

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Managing Change

Change Forces

Resistance Forces

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Managing Resistance to Change

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4.14.1

UNFREEZE• Believe that change is needed. • Share reasons, communicate, and empathize.CHANGE INTERVENTION• Change behaviour/work practices.• Explain why; champion change; create opportunities

for feedback; timing; security; educate; don’t rush.FREEZE• Support and reinforce.• Make it “stick.”

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What to Do When Employees Resist Change

Unfreezing• Share reasons.• Empathize.• Communicate.

Change• Explain.• Champion.• Create opportunities

for feedback.• Time it right. • Offer security.• Educate.• Don’t rush.

4.14.1

Source: G.J. Iskat and J. Liebowitz, “What to Do When Employees Resist Change,” Supervision, 1 August 1996.

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Managing Resistance to Change

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4.14.1

• Educate/communicate• Participate• Negotiate• Managerial support• Coercion

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Errors Managers MakeWhen Leading Change

Unfreezing1. Not establishing a great enough sense of

urgency2. Not creating a powerful enough guiding

coalitionChange3. Lacking a vision4. Undercommunicating the vision by a factor of

ten

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Source: J. P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73, no. 2 (March-April 1995):59.

Errors Managers MakeWhen Leading Change

5. Not removing obstacles to the new vision 6. Not systematically planning for and creating

short-term winsRefreezing7. Declaring victory too soon8. Not anchoring changes in the corporation’s

culture

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Source: J. P. Kotter, “Leading Change: Why Transformation Efforts Fail,” Harvard Business Review 73, no. 2 (March-April 1995):59.

Change Tools and Techniques

Results-Driven Change:• Change created quickly by focusing on the

measurement and improvement of resultsGeneral Electric Workout:• A three-day meeting in which managers and

employees from different levels and parts of an organization quickly generate and act on solutions to specific business problems

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Change Tools and Techniques

Organizational Development:• A philosophy and collection of planned change

interventions designed to improve an organization’s long-term health and performance

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How to Create a Results-Driven Change Program1. Set measurable, short-term goals to improve

performance.

2. Make sure your action steps are likely to improve measured performance.

3. Stress the importance of immediate improvements.4. Solicit help from consultants and staffers to achieve

quick improvements in performance.

5. Test action steps to see if they actually yield improvements. If they don’t, discard them and establish new ones.

6. Use resources you have or that can be easily acquired. It doesn’t take much.

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Source: R. H. Schaffer and H. A. Thomson, “Successful Change Programs Begin With Results,” Harvard Business Review on Change (Boston: Harvard Business School Press, 1998), 189–213.

General Steps for Organizational Development Interventions

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Different Kinds of Organizational Development Interventions

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