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Transcript of Chapter 10
Chapter 10
Innovation and Change
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What Would You Do? Product Innovation at Kimberly-Clark Procter & Gamble is determined to lead the
market in diapers P&G responds aggressively to new innovations by
Kimberly-Clark Other products, such as toilet paper are perceived
to have little room for innovation
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After discussing this section, you should be able to:
Learning ObjectivesOrganizational Innovation
1. explain why innovation matters to companies.
2. discuss the different methods that managers can use to effectively manage innovation in their organizations.
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Why Innovation Matters
TechnologyCycles
InnovationStreams
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Blast From The PastTechnological Innovation in the 20th Century1900-1910
airplane, plastic, air conditioner1911-1920
mammogram, zipper, sonar1921-1930
talking movies, penicillin, jet engine1931-1940
radar, helicopter, computer1941-1950
atomic bomb, bikini, transistor1951-1960
DNA, oral contraceptive, Tylenol
1961-1970 video recorder, handheld calculator,
computer mouse1971-1980
compact disc, gene splicing, laser printer
1981-1990 MS-DOS, space shuttle, CD-ROM
1991-2000 taxol, Pentium processor, Java
2001-Today mapping of human genome, first
cloning of human embryo
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Technology CycleS-curve pattern of innovation
Effort
Per
form
ance
Discontinuity
NewTechnology
A
B
C
Adapted fromExhibit 10.1
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Innovation Streams
Era ofIncrementalChange (1)
Era ofFerment (1)
VariationSelection
TechnologyDiscontinuity (1)
DominantDesign (1)
Era ofIncrementalChange (2)
Era ofFerment (2)
VariationSelection
TechnologyDiscontinuity (2)
DominantDesign (2)
Era ofIncrementalChange (3)
Era ofFerment (3)
VariationSelection
TechnologyDiscontinuity (3)
DominantDesign (3)Technology
Substitution (2)
Technology Substitution (3)
Adapted fromExhibit 10.3
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Managing Innovation
Managing Sources of Innovation
Managing Innovation DuringDiscontinuous Change
Managing Innovation DuringIncremental Change
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Managing Sources of Innovation Creative work environments
workplace cultures in which workers perceive that new ideas are encouraged
Flow the psychological state of effortlessness
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Components of Creative Work Environments
OrganizationalOrganizationalEncouragementEncouragement
FreedomFreedom
Creative WorkCreative WorkEnvironmentsEnvironments
Work GroupWork GroupEncouragementEncouragement
OrganizationalOrganizationalImpedimentsImpediments
SupervisorySupervisoryEncouragementEncouragement
ChallengingChallengingWorkWork
Adapted fromExhibit 10.4
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Been There, Done That
We need to have a positive attitudes towards mistakes
Fear of failure hurts creativity Mistakes should be fixed, not concealed
John Cleese on Innovations & Creativity
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Managing Innovation During Discontinuous Change Discontinuous Change
technology discontinuity creates a significant breakthrough
Use the experiential approach to innovation innovation created by intuition, flexible options,
and hands-on experience in an uncertain environment
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Experiential Approach to Innovation
Design Iteration
Testing
Milestones
Multifunctional Teams
Powerful Leaders
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Managing Innovation during Incremental Change Compression approach to innovation
assumes that innovation is a predictable process that can be planned in steps
Generational change based on incremental improvements to a
dominant technological design and achieving backward compatibility with older technology
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Compression Approach to Innovation
Planning
Supplier Involvement
Shortening the Time ofIndividual Steps
Overlapping Steps
Multifunctional Teams
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Adapted fromExhibit 10.5
Comparing Experiential and Compression Approaches
Experiential Experiential ApproachApproach
Highly uncertain environment
Goals: speed, significant improvements
Approach: build something new and significantly better
• Design iterations• Testing• Milestones• Multifunctional teams• Powerful leaders
Compression Compression ApproachApproach
Certain environmentGoals: speed, lower costs,
incremental improvements
Approach: compress time and steps, small improvements
• Planning• Supplier involvement• Shortening time of steps• Overlapping steps• Multifunctional Teams
ApproachApproach
Assumptions
Steps
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After discussing this section, you should be able to:
Learning ObjectivesOrganizational Change
3. discuss why change occurs and why it matters.
4. discuss the different methods that managers can use to better manage change as it occurs.
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Change & Resistance Forces
NoNoChangeChange
SporadicSporadicChangeChange
DiscontinuousDiscontinuousChangeChange
ContinuousContinuousChangeChange
Res
ista
nce
Fo
rces
Strong
Weak
Change ForcesStrongWeak
Adapted fromExhibit 10.6
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Organizational Decline
BlindedStage
InactionStage
FaultyActionStage
CrisisStage
DissolutionStage
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Managing ChangeManaging Resistance
to Change
Change Toolsand Techniques
Managing Conversationsto Promote Change
What Not to Do WhenLeading Change
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Managing Resistance to Change Lewin’s Framework Methods of Managing Resistance to Change
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Lewin’s Change Process
UnfreezingUnfreezingChangeChange
InterventionInterventionRefreezingRefreezing
• Share reasons• Empathize• Communicate
• Benefits• Champion• Input• Timing• Security• Training• Pace
• Top management support
• Publicize success• Employee Services
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Methods of Managing Resistance to Change Education & Communication Participation Negotiation Top Management Support Coercion
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Change Tools and Techniques
Results-Driven Change
General Electric Workout
Transition Management Team
Organizational Development
Change Agent
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Results-Driven Change Creates quick change by focusing on
measurement and improvement of results create measurable, short-term goals use action steps likely to improve performance importance of immediate improvements consultants and staffers help managers test actions steps to see if yield improvements few resources required to get change started
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General Electric Three Day Workout Boss sets agenda and identifies targets, then
leaves Outside facilitator works with sub-groups,
who debate solutions “Town Meeting” on day three
subgroups make suggestions boss must decide on the spot
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Transition Management Team (TMT) A team of employees whose full-time job is
managing change Anticipate and manage employee reactions
to change Top management determines change
initiatives TMT accomplishes those initiatives
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Organizational Development (OD) A philosophy and collection of planned
change interventions Designed to ensure organizations long-term
survival Change Agent
the person formally charged with guiding a change effort
can be internal or external person
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1. Entry A problem is discovered and the need for change becomesapparent. Search begins for someone to deal with the problem andfacilitate change.
2. Start-up A change agent enters the picture and works to clarify the problemand gain commitment to a change effort.
3. AssessmentandFeedback
The change agent gathers information about the problem andprovides feedback about it to decision makers and those affected byit.
4. ActionPlanning
The change agent works with decision makers to develop an actionplan.
5. Intervention The action plan, or organizational development intervention, iscarried out.
6. Evaluation The change agent helps decision makers assess the effectivenessof the intervention.
7. Adoption Organizational members accept ownership and responsibility for thechange, which is then carried out through the entire organization.
8. Separation The change agent leaves the organization after first ensuring thatthe change intervention will continue to work.
General Steps for OD Interventions
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Types of OD Interventions
Large System Sociotechnical Systems Survey Feedback
Small Group Team Building Unit Goal Setting
Person-Focused Counseling/Coaching Training
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What Really Works?
Change the Work Setting or Change the People?
Changing the Work Setting
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Changing the People
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 55%
Probability of success 57%
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What Really Works? (Cont’d.)
Changing Individual Behavior & Organizational Performance
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Probability of success 76%
Change the Work Setting or Change the People? Do Both!
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Managing Conversations to Initiate Change
PotentialBreakdown:
Omitting Closure
Potential Breakdown:
Unclear Conditions of Satisfaction
InitiateConversation:
Starting aChange
Conversationsfor Understanding:
GeneratingUnderstanding
PotentialBreakdown:
Nothing Happens
Conversations forPerformance:Getting into
Action
PotentialBreakdown:
Agreement Isn’t Action
Lack of Rigor
Conversations forClosure:
Completing theChange
Adapted fromExhibit 10.13
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What Not to Do When Leading ChangeUnfreezingUnfreezing
• Not establishing a great enough sense of urgency
• Not creating a powerful enough guiding coalition
ChangeChange
•Lacking a vision•Under-communicating the vision by a factor of ten
•Not removing obstacles to the new vision
•Not systematically planning for & creating short-term wins
RefreezingRefreezing
•Declaring victory too soon
•Not anchoring the changes in the corporation’s culture
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What Really Happened? Product Innovation at Kimberly-Clark Kimberly-Clark creates a stream of its own
innovative ideas year after year Developed Cottonelle Fresh Rollwipes,
“premoistened” toilet paper disperses or breaks apart in water protected by 30 patents
Significantly improves technology behind existing personal care products