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Lecture 11

BU398 Lecture 11: Chapter-10
BU398 Lecture 11: Chapter-10

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Wilfrid Laurier University
Jennifer Komar

Chapter 10 – Innovation and Change Innovate or Perish: The Strategic Role of Change Two Types of Change: Incremental Versus Radical Change • Incremental change – represents a series of continual progressions that maintain the organization’s general equilibrium and often affects only one organizational part, e.g. implementation of sales teams in the marketing department o Continuous progression, affects organizational part, through normal structure and management processes, technology or product improvements • Radical change – breaks the frame of reference of the organization, often transforming the entire organization, e.g. shifting the entire organization from vertical to horizontal structure o Paradigm breaking burst, transforms entire organization, creates new structure and management, breakthrough technology, new products create new markets Different Types of Change • Product and service changes – pertain to the product or service outputs of an organization, could be small adaptation of existing produces or entirely new product lines • Strategy and structure changes – pertain to the administrative domain in an organization, e.g. supervision and management changes, organizational structure, policies, reward systems, labour relations • Culture changes – refers to changes in the values, attitudes, expectations, beliefs, abilities, and behavior of employee, pertains to change in how employees think • Technology changes – changes in an organization’s production process, including its knowledge and skill base that enable distinctive competence, designed to make things more efficient, e.g. change in method, equipment or workflow Elements for Successful Change • Organizational change – the adoption of a new idea or behavior by an organization • Organizational innovation – the adoption of an idea or behavior that is new to the organization’s industry, market, or general environment 10 Faces of innovation • Learning Faces o Anthropologist – looks at human interactions o Experimenter – prototypes new ideas o Cross-pollinator – explores other industries and culture • Organizing Faces o Hurdler – develops ways to deal with roadblocks o Collaborator – brings together an eclectic group o Director – sparks creative talents • Building faces o Experience architect – creates experiences that go beyond product/service’s functionality o Set designer – creates the right space o Caregiver – delivers special service o Storyteller – builds internal morale and external awareness Steps/Elements of the Change Process • 1.) Ideas – some techniques for spurring internal creativity are to increase the diversity within the organization, and ensuring employees to have plenty of opportunities to interact with different people and freedom for experimentation • 2.) Needs – ideas aren’t considered unless there is a perceived need for change, this occurs when managers see a gap between actual performance and desired performance • 3.) Adoption – occurs when decision makers choose to proceed with a proposed idea • 4.) Implementation – occurs when organization members use a new idea, technique or behavior, often the most difficult part of the change process, may need to acquire new equipment and train workers • 5.) Resources – resources are needed to bring about change, such as time and human energy, such as workers Technology Change Ambidextrous Approach • Ambidextrous approach – to incorporate structures and management processes that can help the creation and the implementation of innovation Techniques for Encouraging Technology Change and to maintain an ambidextrous approach • Switching structures – means an organization creates an organic structure when such a structure is needed for the initiation of new ideas, e.g. Toyota creates a team to design production processes for new car and truck models and once they are done and go into production, the workers return to their regular jobs on the shop floor • Separate creative departments – having separate creative departments, main purpose is to discover new ideas o Idea incubator – provides a safe harbor where ideas from employees throughout the organization can be developed without interference from company bureaucracy or politics • Venture Teams – like a small company within a large company, used to free creative people from the bureaucracy of a large corporation, giving them a separate location and facilities so they can have the freedom to explore and develop o Skunkworks – type of venture team, is a separate, small, informal, highly autonomous, often secretive group that focuses on breakthrough ideas for the business o New venture fund – provides financial resources for employees to develop new ideas, products, or business • Corporate entrepreneurship – attempts to develop an internal entrepreneurial spirit, philosophy, and structure that will produce a higher than average number of innovations, can create systems and structures to encourage entrepreneurship o Idea champions – provides the time and energy to make things happen, they fight to overcome resistance to change and to convince others to agree with the new idea ▪ Technical champion or product champion – is a person who generates or adopts and develops an idea for a technological innovation and is devoted to it ▪ Management champion – acts as a supporter and sponsor the shield and promote an idea within the organization New Products and Services New product success rate • About 80% of new products fail upon introduction and another 10% disappear within 5 years • To be successful the new product had to pass three stages of development: technical completion, commercialization, and market success Reasons for new product success • Better understood customer needs • Making effective use of technology and outside advice • Having influential top managers support the project Horizontal Coordination Model for New product innovation • Horizontal coordination model in achieving new product innovation has 3 components: o Departmental specialization – e.g. R&D, marketing, and production, the three departments are differentiated from each other and have skills, goals, and attitudes appropriate for t
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