This is a 5-6 pages eassy about management called Interview Experience and Synthesis Paper.

Innovation and Change

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LEARNING OUTCOMES

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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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Why Innovation Matters

• Technology cycle: Begins with the birth of a new technology • Ends when that technology reaches its limits and

is replaced by a newer, better technology • S-curve pattern of innovation: Characterized by

slow initial progress, then rapid progress • Slow progress again as a technology matures

and reaches its limits • Occurs when there are major advances in the

knowledge, tools, and techniques of a field

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Why Innovation Matters

• Innovation streams: Patterns of innovation over time that can create sustainable competitive advantage • Begins with technological discontinuity • Followed by discontinuous change • Pursued by dominant design

• Leads to incremental change

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Methods to Effectively Manage Innovation

• Managing sources of innovation • Formation of creative work environments

• Creative work environments: Workplace cultures in which workers perceive that new ideas are welcomed, valued, and encouraged

• Creation of flow experiences • Flow: Psychological state of effortlessness

• People become completely absorbed in what they are doing and time seems to pass quickly

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Exhibit 7.3 Components of Creative Work Environments

Source: T. M. Amabile, R. Conti, H. Coon, J. Lazenby, and M. Herron, “Assessing the Work Environment for Creativity,” Academy of Management Journal 39 (1996): 1154–1184.

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Methods to Effectively Manage Innovation

• Experiential approach - Managing innovation during discontinuous change • Assumes innovation occurs within a highly

uncertain environment • Uses intuition, flexible options, and hands-on

experience • Reduces uncertainty and accelerates learning

and understanding • Aspects - Design iterations, testing, milestones,

multifunctional teams, and powerful leaders

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Methods to Effectively Manage Innovation

• Compression approach - Managing innovation during incremental change • Assumes that incremental innovation can be

planned using a series of steps • Compressing the steps can speed innovation • Aspects

• Planning, supplier involvement • Shortening the time of individual steps • Overlapping steps and multifunctional teams

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Organizational Decline - Risk of Not Changing

• Occurs when organizations don’t recognize the need for change

• Stages of organizational decline • Blinded • Inaction • Faulty action • Crisis • Dissolution

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Managing Change

• Change forces: Produce differences in the form, quality, or condition of an organization over time

• Resistance forces: Support the existing conditions in organizations • Resistance to change: Results from self-interest,

misunderstanding and distrust, and a general intolerance for change

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Managing Change

• Managing organizational change is a basic process of: • Unfreezing: Getting the people affected by

change to believe that change is needed • Change intervention: Process used to get

workers and managers to change their behaviors and work practices

• Refreezing: Supporting and reinforcing new changes so that they stick

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Managing Change

• Methods to manage resistance to change • Education • Communication • Participation • Negotiation • Top-management support • Coercion

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Managing Change

• What not to do when leading change • Not establishing a great enough sense of

urgency • Not creating a powerful enough coalition • Lack of a vision • Under communicating the vision by a factor of

ten

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Managing Change

• Not removing obstacles to the new vision • Not systematically planning for and creating

short-term wins • Declaring victory too soon • Not anchoring changes in the corporation’s

culture

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Managing Change

• Change tools and techniques • Results-driven change: Created quickly by

focusing on the measurement and improvement of results

• General Electric workout: Three-day meeting in which managers and employees generate and act on solutions to specific business problems

• Organizational development: Philosophy and collection of planned change interventions • Designed to improve an organization’s long-

term health and performance

SUMMARY

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• Organizational innovation is the successful implementation of creative ideas

• To manage innovation, the sources of innovation should be first managed

• Organizational decline occurs when companies don’t anticipate or adapt to the pressures that threaten their survival

• Change is a function of the forces that promote change and the opposing forces that slow or resist change

KEY TERMS

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• Organizational innovation

• Technology cycle • S-curve pattern of

innovation • Innovation streams • Technological

discontinuity • Discontinuous change • Technological

substitution

• Design competition • Dominant design • Technological lockout • Incremental change • Creative work

environments • Flow • Experiential approach to

innovation • Design iteration • Product prototype

KEY TERMS

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• Testing • Milestones • Multifunctional teams • Compression approach

to innovation • Generational change • Organizational decline • Change forces • Resistance forces • Resistance to change • Unfreezing

• Change intervention • Refreezing • Coercion • Results-driven change • General Electric workout • Organizational

development • Change agent

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