Management by chuch williams chapter 07

Chapter Innovation and Change MGMT Chuck Williams Designed & Prepared by B-books, Ltd Copyright ©2008 by Cengage Learning All rights reserved Organizational Innovation After reading these 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 Copyright ©2008 by Cengage Learning All rights reserved Why Innovation Matters Technology Cycles Innovation Streams Copyright ©2008 by Cengage Learning All rights reserved Why Innovation Matters 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 • oral contraceptive, Tylenol 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 • first cloning of human embryo Copyright ©2008 by Cengage Learning All rights reserved Technology Cycles 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 1.1 Copyright ©2008 by Cengage Learning All rights reserved S-Curves and Technological Innovation Performance Discontinuity C New Technology B A Effort 1.1 Copyright ©2008 by Cengage Learning All rights reserved Innovation Streams 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 1.2 Copyright ©2008 by Cengage Learning All rights reserved Innovation Streams: Technology Cycles over Time Technological Technological Discontinuity Discontinuity(2) (2) Technological Substitution Era Eraof of Incremental Incremental Change Change(2) (2) Variation Selection Discontinuous Discontinuous Change(2) Change(2) Dominant Dominant Design Design(2) (2) Technological Technological Discontinuity Discontinuity(1) (1) Era Eraof of Incremental Incremental Change Change(1) (1) 1.2 Variation Selection Dominant Dominant Design Design(1) (1) Discontinuous Discontinuous Change(1) Change(1) Copyright ©2008 by Cengage Learning All rights reserved Innovation Streams Technological Technological Discontinuities Discontinuities Discontinuous Discontinuous Change Change Technological Technological Substitution Substitution Design Design Competition Competition Dominant Dominant Design Design 1.2 Copyright ©2008 by Cengage Learning All rights reserved Managing Innovation Managing Sources of innovation Managing During Discontinuous Change Managing During Incremental Change 10 Copyright ©2008 by Cengage Learning All rights reserved Organizational Change After reading these sections, you should be able to: discuss why not changing can lead to organizational decline discuss the different methods that managers can use to better manage change as it occurs 18 Copyright ©2008 by Cengage Learning All rights reserved Five Stages of Organizational Decline Blinded Blinded Inaction Inaction Faulty Faulty Action Action Crisis Crisis Dissolution Dissolution 19 Copyright ©2008 by Cengage Learning All rights reserved Circuit City in Retrenchment Beyond the Book • Circuit City had only one profitable quarter in 20072008 In November 2008, it had $2.3 billion in debts with only $3.4 billion in assets • Former CEO Philip Schoonover moved to reduce 3,400 higher-paid management positions in March 2007 He was ousted by Circuit City’s board in September 2008 • Circuit City filed for Chapter 11 in November 2008 and aims to liquidate 155 U.S stores and lay off 20% of its workforce in an effort to regroup Source: K Hudson, “Circuit City Enters New Turnaround Stage,” The Wall Street Journal, 31 May 2007, B5; M Bustillo, “Circuit City Seeks Haven In Bankruptcy Protection,” The Wall Street Journal, 11 November 2008 Copyright ©2008 by Cengage Learning All rights reserved 20 Managing Change Change Change Forces Forces Change Change Resistance Resistance Forces Forces 21 Copyright ©2008 by Cengage Learning All rights reserved Managing Change Managing Managing resistance resistance to tochange change What Whatnot not to todo dowhen when leading leadingchange change Different Differentchange change tools toolsand and techniques techniques 22 Copyright ©2008 by Cengage Learning All rights reserved Managing Resistance to Change Unfreezing • Share reasons • Empathize • Communicate Change Intervention • • • • • • • Benefits Champion Input Timing Security Training Pace Refreezing • Top management support • Reinforce 4.1 23 Copyright ©2008 by Cengage Learning All rights reserved Managing Resistance to Change Education Education and and Communication Communication Participation Participation Negotiation Negotiation Managerial Managerial Support Support Coercion Coercion 4.1 24 Copyright ©2008 by Cengage Learning All rights reserved Errors Made when Leading Change Unfreezing Unfreezing 1 Not Notestablishing establishingaagreat greatenough enoughsense sense of ofurgency urgency 2 Not Not creating creatingaapowerful powerful enough enough guiding guiding coalition coalition Change Change 3 Lacking Lackingaavision vision 4 Undercommunicating Undercommunicatingthe the vision visionby byaafactor factorof of10 10 5 Not Not removing removingobstacles obstaclesto to the the new new vision vision 6 Not Not systematically systematicallyplanning planningfor forand andcreating creatingshort-term short-termwins wins Refreezing Refreezing 7 Declaring Declaringvictory victorytoo too soon soon 4.2 8 Not Not anchoring anchoringchanges changesin inthe the corporation’s corporation’sculture culture 25 Copyright ©2008 by Cengage Learning All rights reserved Change Tools and Techniques Results-Driven Results-DrivenChange Change General GeneralElectric ElectricWorkout Workout Transition TransitionManagement ManagementTeams Teams Organizational OrganizationalDevelopment Development 4.3 26 Copyright ©2008 by Cengage Learning All rights reserved Results-Driven Change 1 Create Create measurable measurable short-term short-term goals goals to to improve improve performance performance 2 Use Use action action steps steps only only ifif likely likely to to improve improve performance performance 3 Stress Stress the the importance importance of of immediate immediate improvements improvements 4 Consultants Consultants and and staffers staffers should should help help managers managers achieve achieve quick quick improvements improvements in in performance performance 5 Test Test action action steps steps to to see see ifif they they yield yield improvements improvements 4.3 6 ItIt takes takes few few resources resources to to get get results-driven results-driven change change started started 27 Copyright ©2008 by Cengage Learning All rights reserved 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 28 Copyright ©2008 by Cengage Learning All rights reserved Beyond the Book 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 29 Copyright ©2008 by Cengage Learning All rights reserved Organizational Development • A philosophy and collection of planned change interventions • Designed to ensure an organization’s longterm health and performance • Change Agent – the person formally charged with guiding a change effort – can be an internal or external person 4.3 30 Copyright ©2008 by Cengage Learning All rights reserved Organizational Development General General Steps Steps for for Organizational Organizational Development Development Interventions Interventions 4.3 Entry Startup Assessment and Feedback Action Planning Intervention Evaluation Adoption Separation 31 Copyright ©2008 by Cengage Learning All rights reserved Kinds of OD Interventions LARGE LARGESYSTEM SYSTEMINTERVENTIONS INTERVENTIONS Sociotechnical Sociotechnicalsystems systems Survey Surveyfeedback feedback SMALL SMALLGROUP GROUPINTERVENTIONS INTERVENTIONS Team Teambuilding building Unit Unitgoal goal setting setting PERSON-FOCUSED PERSON-FOCUSEDINTERVENTIONS INTERVENTIONS Counseling/Coaching Counseling/Coaching Training Training 4.3 32 Copyright ©2008 by Cengage Learning All rights reserved ... Schoonover moved to reduce 3,400 higher-paid management positions in March 2 007 He was ousted by Circuit City’s board in September 2008 • Circuit City filed for Chapter 11 in November 2008 and aims to... technology and ends when that technology reaches its limits and is replaced by a newer, better technology 1.1 Copyright ©2008 by Cengage Learning All rights reserved S-Curves and Technological Innovation... ©2008 by Cengage Learning All rights reserved Managing Innovation Managing Sources of innovation Managing During Discontinuous Change Managing During Incremental Change 10 Copyright ©2008 by Cengage