CHAPTER ELEVEN Innovation and Change

1. CHAPTER ELEVENInnovationand Change

2. What Would You Do? As the director of glass and glass ceramics at Corning… • It’s your job to maintain innovation--the key to Corning’s strategy • You have to find the right balance between creativity and keeping Corning happy • What should you do to continue to encourage creativity? How do you decide which ideas deserve R&D time and Corning’s dollars?

3. Organizational Innovation After reading the next two sections, you should be able to: • explain why innovation matters to companies. • discuss the different methods that managers can use to effectively manage innovation in their organizations.

4. Why Innovation Matters TechnologyCycles InnovationStreams 1

5. Discontinuity C New Technology Performance B A Effort Technology Cycles Adapted from Exhibit 9.1 1.1

6. Technological Discontinuity (2) Technological Substitution Era of Incremental Change (2) Variation Selection Era of Ferment (2) Dominant Design (2) Technological Discontinuity (1) Era of Incremental Change (1) Variation Selection Era of Ferment (1) Dominant Design (1) Innovation Streams Adapted from Exhibit 9.3 1.2

7. 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 Technological Innovation Since 1900 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

8. ManagingSources of Innovation Managing DuringDiscontinuous Change Managing DuringIncrementalChange Managing Innovation 2

9. Managing Sources of Innovation • 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 2.1

10. OrganizationalEncouragement SupervisoryEncouragement ChallengingWork CreativeWorkEnvironments OrganizationalImpediments Work GroupEncouragement ValuableResources Flow Components of Creative Work Environments Adapted from Exhibit 9.4 2.1

11. Managing Innovation During Discontinuous Change • Discontinuous Change • technological discontinuity creates a significant breakthrough • Experiential approach to innovation • the key to innovation is to use intuition, flexible options, and hands-on experience • innovation is occurring within an uncertain environment 2.2

12. Highly uncertain environment Era of ferment—technological substitution and design competition Managing Innovation During Discontinuous Change • GoalsSpeedImprovements in performanceNew dominant design • ApproachBuild something new, different, andbetter 2.2

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

14. 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 2.3

15. Certain environment Era of incremental change—establishedtechnology • GoalsSpeedLower costsIncremental improvements in performance • ApproachCompress time and steps needed to bringabout small improvements Managing Innovation During Incremental Change 2.3

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

17. Organizational Change Afterreading the next section, you should be able to: • discuss why change occurs and why it matters.

18. Self-Interest Habit Resistance to Change BureaucraticInertia Fear Peer Pressure Resistance to Change

19. Managing resistanceto change Different changetools andtechniques What not to do whenleading Change Managing Change 3

20. Managing Resistance to Change Change Unfreezing Refreezing • Share reasons • Empathize • Communicate • Benefits • Champion • Input • Timing • Security • Training • Pace • Top management support • Reinforce Adapted from Exhibit 9.5 3.1

21. Education and Communication Participation and Involvement Facilitation and Support Resistance to Organizational Change Negotiation and Agreement Manipulation and Co-optation Coercion Reducing Resistance to Change

22. Results-Driven Change General Electric Workout Transition Management Teams Organizational Development Change Tools and Techniques 3.2

23. 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 3.2 Adapted from Exhibit 9.6

24. General Electric Workout Phase • Boss sets agenda and identifies targets, then leaves • Outside facilitator works with sub-groups, who debate solutions • “Town Meeting” • subgroups make suggestions • boss must decide on the spot 3.2

25. Transition Management Team • A team of employees whose full-time job is managing 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 3.2

26. 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. Adapted from Exhibit 9.7 3.2

27. Organizational Development • A philosophy and collection of planned change interventions • Designed to ensure an organization’s long-term survival • Change Agent • the person formally charged with guiding a change effort • can be internal or external person 3.2

28. Organizational Development General Steps for Organizational Development Interventions • Entry • Startup • Assessment and Feedback • Action Planning • Intervention • Evaluation • Adoption • Separation Adapted from Exhibit 9.8 3.2

29. Organizational Development Types of OD Interventions Large System • Sociotechnical Systems • Survey Feedback Small Group • Team Building • Unit Goal Setting Person-Focused • Counseling/Coaching • Training Adapted from Exhibit 9.9 3.2

30. What Not to Do When Leading Change UNFREEZING • Not establishing a great enough sense of urgency • Not creating a powerful enough guiding coalition CHANGE • Lacking a vision • Undercommunicating the vision • Not removing obstacles • Not planning for and creating short-term wins REFREEZING • Declaring victory too soon • Not anchoring changes in the corporation’s culture Adapted from Exhibit 9.10 3.3

31. 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 WorksChange the Work Setting or Change the People?