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Chapter 7

Chapter 7. Innovation and Change. Why Innovation Matters. Technology Cycles. Innovation Streams. 1. 1900-1910 airplane, plastic, air conditioner 1911-1920 mammogram, zipper, sonar 1921-1930 talking movies, penicillin, jet engine 1931-1940 radar, helicopter, computer 1941-1950

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Chapter 7

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  1. Chapter 7 Innovation and Change

  2. Why Innovation Matters TechnologyCycles InnovationStreams 1

  3. 1900-1910 airplane, plastic, air conditioner 1911-1920 mammogram, zipper, sonar 1921-1930 talking movies, penicillin, jet engine 1931-1940 radar, helicopter, computer 1941-1950 atomic bomb, bikini, transistor 1951-1960 DNA, oral contraceptive, Tylenol Why Innovation Matters 1961-1970 • video recorder, handheld calculator, computer mouse 1971-1980 • 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 1 Adapted from Exhibit 7.1

  4. 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. Technology Cycles Piano Rolls Records & LPs Tape CD’s MP3, IPod 1.1

  5. Discontinuity C New Technology Performance B A Effort S-Curves and Technological Innovation 1.1 Adapted from Exhibit 7.2

  6. ValuableResources RareResources SustainableCompetitive Advantage ImperfectlyImitableResources Non-SubstitutableResources Requirements forSustainable Competitive Advantage 1 Adapted from Exhibit 6.1

  7. Innovation Streams Patterns of innovation over time that can create sustainable competitive advantage. Technological Discontinuity A scientific advance or unique combination of existing technologies that creates a significant breakthrough in performance or function. Innovation Streams IBM 1401 IBM System/360 IBM System/370 IBM System/3 IBM AS/400 IBM Personal Computer 1.2

  8. Technological Discontinuity (2) Technological Substitution Variation Selection Era of Incremental Change (2) Era of Ferment (2) Dominant Design (2) Technological Discontinuity (1) Variation Selection Era of Incremental Change (1) Era of Ferment (1) Dominant Design (1) Innovation Streams: Technology Cycles over Time • Also called Discontinuous Change • Design Competition 1.2 Adapted from Exhibit 7.4

  9. TechnologicalSubstitution DesignCompetition Innovation Streams Technological Discontinuities Discontinuous Change Dominant Design 1.2

  10. ManagingSources of innovation Managing DuringDiscontinuous Change Managing DuringIncrementalChange Managing Innovation 2

  11. Creative work environments Workplace cultures in which workers perceive that new ideas are encouraged Flow The psychological state of effortlessness in which you become absorbed in your work and time seems to pass quickly Managing Sources of Innovation 2.1

  12. Components of Creative Work Environments Flow 2.1 Adapted from Exhibit 7.5

  13. Give Credit, Don’t Take It • Stealing others’ ideas wrong, AND • Nothing kills a creative work environment faster So…whether or not you’re the boss, give credit where it’s due. DOING THE RIGHT THING Doing the Right Thing 2.1

  14. Companies can avoid internal impediments to creativity by looking outside the organization. Customers are an important source of innovation. Sportime International followed a customer idea and created Hands-On basketballs for children who need help learning how to shoot. Expanding Sources of Innovation

  15. 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 2.2

  16. Design Iterations Testing Parts ofExperientialApproach Milestones Multifunctional Teams Powerful Leaders Experiential Approach to Innovation 2.2

  17. Managing Innovation During Incremental Change If you know where you’re going… • 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 IBM System/360 Model 25 IBM System/360 Model 30 IBM System/360 Model 40 IBM System/360 Model 50 IBM System/360 Model 65 2.3

  18. Planning Supplier Involvement Parts ofCompressionApproach Shortening Time ofIndividual Steps Overlapping Steps Multifunctional Teams Compression Approach to Innovation 2.3

  19. Experiental Approach Compression Approach Approach Environment Goals Steps Uncertain discontinuouschange: technological substitution and design competition Certain incremental changeestablished technology(i.e., dominant design) Speed Lower costs Incremental improvements in performance of dominantdesign Speed PerformanceImprovements New dominant design Compress time/steps neededto bring about small improvements Build something new,different, and better Design iterations Testing Milestones Multifunctional teams Powerful leaders Planning Supplier involvement Shorten time of steps Overlapping steps Multifunctional teams 2.3 Adapted from Exhibit 7.6 Managing Innovation

  20. Biz Flix: October Sky Are Homer and his friends working toward discontinuous change or incremental change? Which approach to innovation best describes what the “Rocket Boys” are doing? Take Two Video Click

  21. Change Managing it within your organization 4

  22. Blinded Inaction Faulty Action Crisis Dissolution Five Stages of Organizational Decline Failure to recognize change happening Recognize change but take no action Recognize change but slow to react or react inappropriately Bankruptcy/reorganization Bye-bye 3

  23. Change Forces Change Resistance Forces Managing Change Why resist? * Self Interest * Misunderstanding * Distrust * Intolerance to change 4

  24. Managing Change Managing resistanceto change What not to do whenleading change Different changetools andtechniques 4

  25. Managing Resistance to Change Unfreezing ChangeIntervention Refreezing • Share reasons • Empathize • Communicate • Benefits • Champion • Input • Timing • Security • Training • Pace 4.1

  26. Managing Resistance to Change Education and Communication Participation Negotiation Managerial Support Coercion 4.1

  27. Unfreezing • Not establishing a great enough sense of urgency. 2. Not creating a powerful enough guiding coalition. Change 3. Lacking a vision. 4. Undercommunicating the vision by a factor of 10. 5. Not removing obstacles to the new vision. 6. Not systematically planning for and creating short-term wins. Refreezing 7. Declaring victory too soon. 8. Not anchoring changes in the corporation’s culture. Errors Made when Leading Change 4.2 Adapted from Exhibit 7.8

  28. Results-Driven Change General Electric Workout Transition Management Teams Organizational Development Change Tools and Techniques 4.3

  29. Create measurable short-term goals to improve performance 2. Use action steps only if likely to improve performance • Stress the importance of immediate improvements 4. Consultants and staffers should help managers achievequick improvements in performance • Test action steps to see if they yield improvements • It takes few resources to get results-driven change started Results-Driven Change 4.3 Adapted from Exhibit 7.9

  30. General Electric Workout Day • Boss discusses agenda and targets specific business problems, then leaves • Outside facilitator works with teams, who debate solutions • “Town Meeting” • teams make suggestions • boss must decide on the spot—agree, say no, or ask for more information 4.3

  31. Transition Management Team • A team of employees whose full-time job is to manage and coordinate change • Anticipate and manage employee reactions to change • Work with the CEO to… • decide on change projects • select and evaluate people in charge • make sure change projects are complementary 4.3

  32. Transition Management Team Primary Responsibilities of TMT • Establish a context for change and provide guidance. • Stimulate conversation. • Provide appropriate resources. • Coordinate and align projects. • Ensure congruence of messages, activities, policies, and behaviors. • Provide opportunities for joint creation. • Anticipate, identify, and address people problems. • Prepare the critical mass. 4.3 Adapted from Exhibit 7.10

  33. Organizational Development • A philosophy and collection of planned change interventions • Designed to ensure organizations long-term health and performance • Change Agent • the person formally charged with guiding a change effort • can be an internal or external person 4.3

  34. LARGE SYSTEM INTERVENTIONS Sociotechnical systems Survey feedback SMALL GROUP INTERVENTIONS Team building Unit goal setting PERSON-FOCUSED INTERVENTIONS Counseling/Coaching Training Kinds of OD Interventions 4.3 Adapted from Exhibit 7.12

  35. Changing the Work Setting 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 55% Changing the People 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 57% Changing Individual Behavior & Organizational Performance 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% probability of success 76% What Really Works Change the Work Setting or Change the People?

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