CHAPTER FOSTERING AN INNOVATIVE ORGANISATION © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Lecture outline • • • • The nature of change & innovation Organisation life-cycles Promoting innovation Key organisational change components © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Nature of change & innovation Change Innovation Any alteration of the status quo New idea applied to initiating or improving a process, product or service © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Nature of change & innovation Forces for change & innovation: External: External:Response Responsetotoopportunities opportunities and andthreats threatsfrom fromthe themarket, market,regulators regulators and andother otherelements elementsofofthe theenvironment environment Internal: Internal:Strategy Strategy&&plans, plans,employees’ employees’ behaviour, behaviour,change change&&innovation innovationdecisions, decisions, cultural culturalchange, change,restructures, restructures, technological technological&&leadership leadershipchange change © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational life cycles Life cycles: Predictable stages of development organisations typically follow © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational life cycles Intrepreneurial Intrepreneurialstage stage Collectivity Collectivitystage stage Formalisation Formalisationand andcontrol controlstage stage Elaboration Elaborationof ofstructure structurestage stage © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Organisational life cycles Methods of organisational termination: • Bankruptcy • Liquidation • Merger • Acquisition • Take-over © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Promoting innovation Recognition Recognitionof ofopportunity opportunity or oraaproblem problem Line Lineup uppowerful powerfulsponsors sponsors Develop Developand andcommunicate communicate aavision vision Empower Empowerothers othersto to act actout outthe thevision vision Prepare Prepareto toovercome overcomeresistance resistance Plan Planfor for&&reward rewardvisible visibleprogress progress Consolidate Consolidateimprovements improvements&& facilitate facilitatefurther furtherchange change Monitor Monitor&&institutionalise institutionalisechange change © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Promoting innovation • • • • Organisational development Innovation for competitive advantage Product development Intrepreneurship © 2003 McGraw-Hill Australia Pty Ltd PowerPoint Promoting innovation Organisational development Diagnosis Diagnosis Intervention; Intervention;44 techniques techniques ••Process Processconsultation consultation ••Team Teambuilding building ••Third Thirdparty partyintervention intervention ••Technostructural Technostructuralactivities activities Evaluation Evaluation © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 10 Promoting innovation Innovation for competitive advantage: 1)1)Hard Hardfor forcompetitors competitorstotoimitate imitate Four Fourfactors factors needed neededto to ensure ensure advantage advantage 2)2)Meeting Meetingsignificant significantcustomer customerneeds needs 3)3)Fit Fitofofinnovation innovationtotoorganisation’s organisation’stime time advantages advantages 4)4)Innovation Innovationneeds needstotorely relyon oncapabilities capabilities accessible accessibletotothe theorganisation, organisation,but butless lessso so totocompetitors competitors © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Promoting innovation Product development principles: • Establish a stage-gate development funnel • Establish cross-functional teams • Use concurrent engineering • Involve both customers & suppliers © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 12 Promoting innovation Intrepreneurship: Encourage the take-up of entrepreneurship roles by organisation members e.g: • Idea generator • Idea champion • Idea sponsor • Idea orchestrator © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Organisational change components • • • • • Structural Technological Human resource Cultural Component inter-relationship © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 14 Organisational change components Structural component: • Job definitions • Job groupings • Teams • Delegation • Reporting relationships © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Organisational change components Technological component: Technology may drive change/innovation by: • Requiring new work methods • Providing/removing competitive edge © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 16 Organisational change components Human resources is the vehicle for changing knowledge, skills, perceptions & behaviours needed for a job It utilises: • Recruitment & selection • Training • Performance appraisal • Reward systems © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Organisational change components Major organisational changes often require concomitant changes to organisational culture ‘Organisational culture can be defined as a system of shared values, assumptions, beliefs and norms linking an organisation’s members.’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 18 Organisational change components Inter-relationship amongst components: Change to one component creates tensions on other components until they are adjusted accordingly • Minor change May relate to only one component • Major change May relate to all four components © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Nature of change & innovation – Distinguishing change from innovation – External & internal forces for change & innovation • Organisation life cycles – Life cycle stages – Termination © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 Lecture summary • Promoting innovation – Organisational development (OD) – Innovation for competitive advantage – Product development – Entrepreneurship • Organisational change – Key components © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 21 [...]... changes to organisational culture ‘Organisational culture can be defined as a system of shared values, assumptions, beliefs and norms linking an organisation s members.’ © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 18 Organisational change components Inter-relationship amongst components: Change to one component creates tensions on other components until they are adjusted accordingly • Minor change... McGraw-Hill Australia Pty Ltd PowerPoint 16 Organisational change components Human resources is the vehicle for changing knowledge, skills, perceptions & behaviours needed for a job It utilises: • Recruitment & selection • Training • Performance appraisal • Reward systems © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 17 Organisational change components Major organisational changes often require concomitant...Promoting innovation Innovation for competitive advantage: 1)1)Hard Hardfor forcompetitors competitorstotoimitate imitate Four Fourfactors factors needed neededto to ensure ensure advantage advantage 2)2)Meeting Meetingsignificant significantcustomer customerneeds needs 3)3)Fit Fitofofinnovation innovationtotoorganisation’s organisation stime time advantages advantages 4)4)Innovation Innovationneeds needstotorely... change May relate to only one component • Major change May relate to all four components © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 19 Lecture summary • Nature of change & innovation – Distinguishing change from innovation – External & internal forces for change & innovation • Organisation life cycles – Life cycle stages – Termination © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 Lecture summary... McGraw-Hill Australia Pty Ltd PowerPoint 12 Promoting innovation Intrepreneurship: Encourage the take-up of entrepreneurship roles by organisation members e.g: • Idea generator • Idea champion • Idea sponsor • Idea orchestrator © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 13 Organisational change components • • • • • Structural Technological Human resource Cultural Component inter-relationship © 2003 McGraw-Hill... McGraw-Hill Australia Pty Ltd PowerPoint 14 Organisational change components Structural component: • Job definitions • Job groupings • Teams • Delegation • Reporting relationships © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 15 Organisational change components Technological component: Technology may drive change/innovation by: • Requiring new work methods • Providing/removing competitive edge © 2003 McGraw-Hill... oncapabilities capabilities accessible accessibletotothe theorganisation, organisation, but butless lessso so totocompetitors competitors © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 11 Promoting innovation Product development principles: • Establish a stage-gate development funnel • Establish cross-functional teams • Use concurrent engineering • Involve both customers & suppliers © 2003 McGraw-Hill... cycle stages – Termination © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 20 Lecture summary • Promoting innovation – Organisational development (OD) – Innovation for competitive advantage – Product development – Entrepreneurship • Organisational change – Key components © 2003 McGraw-Hill Australia Pty Ltd PowerPoint 21