Final Project Part I

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Innova&on and Change

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

The Strategic Role of Change •  Organiza+ons must run fast to keep up with changes taking place all around them

•  Today’s organiza+ons must keep themselves open to con+nuous innova+on to survive

•  Three types of change: – Episodic change – Con+nuous change – Disrup+ve change

Stages of Disrup+ve Innova+on

Strategic Types of Innova+on and Change

Elements for Successful Change

•  Organiza5onal change is the adop+on of a new idea or behavior by an organiza+on

•  Organiza5onal innova5on is the adop+on of an idea or behavior that is new to the organiza+on’s industry, market, or general environment

•  Change process within organiza+ons comes from innova+on and new ideas regardless of +ming

•  Successful change includes ideas and crea+vity, need, decision to adopt, implementa+on, and resources

Successful Change Elements

Technology Change

•  Technology is a key driver of organiza+onal change

•  Change is easily embraced by organiza+ons with empowered employees

•  Innova+ve organiza+ons are flexible and free- flowing without rigid work rules

•  Mechanis+c structures s+fle innova+on and focus on rules and regula+ons

Ambidextrous Organiza+on

Incorporates structures and management processes that are appropriate for innova+on

Techniques for Encouraging Technology Change

•  Switching Structures – create an organic structure

•  Crea5ve Departments – department for innova+on

•  Venture Teams – a small company within the organiza+on

•  Corporate Entrepreneurship – promote entrepreneurial spirit

•  Bo@om-up Approach – useful ideas come from people and daily work

New Products and Services •  The failure rate for new food products is 70-80% •  Producing products that fail is part of business •  Reasons for success:

– Innova+ng companies understand customers – Innova+ng companies successfully use technology

– Top management supports innova+on

•  Horizontal Coordina5on Model: – Specializa+on – Boundary Spanning – Horizontal Coordina+on ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

New Product Success Rates

Horizontal Coordina+on for Innova+on

Open Innova+on and Crowdsourcing

•  Open Innova5on- extending the search for and commercializa+on of new products beyond the boundaries of the organiza+on and the industry

•  Crowdsourcing- solici+ng ideas, services, and informa+on from online volunteers rather than from tradi+onal employees

Achieving Compe++ve Advantage: The Need for Speed

•  The rapid development of new products and services can be a major strategic weapon

•  New product development is associated with lower development costs and greater success

•  Firms can address shi%ing customer demands

Strategy and Structure Change •  Organiza+ons need to change strategies, structures, processes, and procedures more o%en to adapt

•  Many organiza+ons are preparing for more change by:

– Cu_ng out layers – Decentralizing decision making – Shi% toward horizontal structures – Empowered teams and workers – Virtual network strategies –  Incorpora+ng eBusiness

Organiza+on Design for Implemen+ng Management Change

•  A mechanis+c organiza+on structure is appropriate for frequent management changes

•  The authority for strategy and structure change lies with top management

•  Employee input may be sought, but top managers have the responsibility to direct the change

Dual-Core Approach to Organiza+on Change

Forces for Culture Change

Ø Reengineering and Horizontal Organiza+on

Ø Diversity

Ø The Learning Organiza+on

OD Culture Change Interven+ons

Large Group Interven+on

Team Building

Interdepartmental Ac+vi+es

The Change Curve

Leadership for Change

Transforma5onal leaders - Create a compelling vision - Create an environment for risk-taking and innova+on

Leadership for Change: 80% of successful innova+ve companies have top leaders who reinforce the value and importance of innova+on. Transforma+onal leadership is well-suited for leading change.

Techniques for Change Implementa+on

•  Establish a sense of urgency for change •  Establish a coali+on to guide the change

•  Create a vision and strategy for change

•  Find an idea that fits the need •  Create change teams

•  Foster idea champions

Techniques for Overcoming Resistance

•  Top management support •  Par+cipa+on and involvement •  Alignment with needs and goals of users •  Communica+on and training •  An environment with psychological safety

Design Essen+als

vChange, not stability, is the challenge for managers v There are four types of change v Organic structures foster innova+on

Design Essen+als

v A top-down approach is best for change and strategy

v Top managers must foster culture change v The implementa+on of change can be difficult vPlanning for change can help deal with resistance