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Chapter 7 Innovation And Change
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Chapter 7 Innovation And Change


Management 4th Edition written by Chuck Williams

Management 4th Edition written by Chuck Williams

Published in Business , Education
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  • 1. Chapter 7 Prepared by Deborah Baker Texas Christian University Innovation and Change Management 4th Edition Chuck Williams
  • 2. What Would You Do?
    • W. L. Gore Headquarters, Newark, Delaware
    • W. L. Gore is best known for Gore-Tex, a fabric that is waterproof, windproof, and temperature resistant.
    • For two decades, Gore-Tex was a unique product, but today, many cheaper entries are available— and sales have declined.
    • Historically Gore has increased revenues by developing innovative products.
    • How do you manage innovation to produce dramatically different and better products? What role should company leaders play in encouraging innovation and creativity?
  • 3. 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.
  • 4. Why Innovation Matters Technology Cycles Innovation Streams 1
  • 5. 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
    • DNA, 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
    • mapping of human genome, first cloning of human embryo
    Adapted from Exhibit 7.1 1
  • 6. Technology Cycles 1.1 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.
  • 7. S-Curves and Technological Innovation Adapted from Exhibit 7.2 1.1 Effort Performance Discontinuity New Technology A B C
  • 8. Innovation Streams 1.2 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.
  • 9. Innovation Streams: Technology Cycles over Time Adapted from Exhibit 7.4 1.2 Era of Ferment (1) Variation Selection Technological Discontinuity (1) Dominant Design (1) Era of Incremental Change (2) Era of Ferment (2) Variation Selection Technological Discontinuity (2) Dominant Design (2) Technological Substitution Era of Incremental Change (1)
  • 10. Innovation Streams 1.2 Discontinuous Change Dominant Design Technological Discontinuities Technological Substitution Design Competition
  • 11. Managing Innovation 2 Managing Sources of innovation Managing During Discontinuous Change Managing During Incremental Change
  • 12. Managing Sources of Innovation 2.1 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
  • 13. Components of Creative Work Environments 2.1 Adapted from Exhibit 7.5 Creative Work Environments Challenging Work Work Group Encouragement Lack of Organiz. Impediments Supervisory Encouragement Organizational Encouragement Freedom Flow
  • 14. Doing the Right Thing 2.1
    • 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.
  • 15. Expanding Sources of Innovation
    • 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.
  • 16. 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
  • 17. Experiential Approach to Innovation 2.2 Parts of Experiential Approach Milestones Design Iterations Testing Multifunctional Teams Powerful Leaders
  • 18. 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
  • 19. Compression Approach to Innovation 2.3 Parts of Compression Approach Shortening Time of Individual Steps Planning Supplier Involvement Overlapping Steps Multifunctional Teams
  • 20. Managing Innovation Adapted from Exhibit 7.6 2.3 Experimental Approach Compression Approach Environment Goals Approach Steps Uncertain discontinuous change: technological substitution and design competition Certain incremental change established technology (i.e., dominant design) Compress time/steps needed to bring about small improvements Planning Supplier involvement Shorten time of steps Overlapping steps Multifunctional teams Build something new, different, and better Design iterations Testing Milestones Multifunctional teams Powerful leaders Speed Lower costs Incremental improvements in performance of dominant design Speed Performance Improvements New dominant design
  • 21. 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.
  • 22. Five Stages of Organizational Decline 3 Blinded Inaction Faulty Action Crisis Dissolution
  • 23. Managing Change 4 Resistance Forces Change Forces Change
  • 24. Managing Change Managing resistance to change 4 What not to do when leading change Different change tools and techniques
  • 25. Managing Resistance to Change Unfreezing Change Intervention Refreezing
    • Share reasons
    • Empathize
    • Communicate
    • Benefits
    • Champion
    • Input
    • Timing
    • Security
    • Training
    • Pace
    • Top management support
    • Reinforce
  • 26. Managing Resistance to Change 4.1 Education and Communication Participation Negotiation Managerial Support Coercion
  • 27. Errors Made when Leading Change 4.2 Adapted from Exhibit 7.8 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.
  • 28. Change Tools and Techniques 4.3 Results-Driven Change General Electric Workout Transition Management Teams Organizational Development
  • 29. Results-Driven Change Adapted from Exhibit 7.9 4.3
    • 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 achieve quick improvements in performance
    • Test action steps to see if they yield improvements
    • It takes few resources to get results-driven change started
  • 30. General Electric Workout
    • 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
    Day 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
  • 32. Transition Management Team
    • 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.
    Primary Responsibilities of TMT Adapted from Exhibit 7.10 4.3
  • 33. Example of TMT TMTs helped BoA cut the number of days it takes to open a new branch from 500 to 350 days, resulting in tremendous cost savings.
  • 34. 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
  • 35. Organizational Development
    • Entry
    • Startup
    • Assessment and Feedback
    • Action Planning
    • Intervention
    • Evaluation
    • Adoption
    • Separation
    Adapted from Exhibit 7.11 General Steps for Organizational Development Interventions 4.3
  • 36. Kinds of OD Interventions Adapted from Exhibit 7.12 4.3 LARGE SYSTEM INTERVENTIONS Sociotechnical systems Survey feedback SMALL GROUP INTERVENTIONS Team building Unit goal setting PERSON-FOCUSED INTERVENTIONS Counseling/Coaching Training
  • 37. What Really Works Change the Work Setting or Change the People? 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%