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Chapter 12
Organizational Learning,
Innovation, and Change
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 2
Purpose and Overview
• Purpose
– To understand innovation and change as
complex and nonlinear sequences of events
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 3
Purpose and Overview
• Overview
– Change in an Unpredictable, Unknowable
World
– Health Care Organizations as Complex
Adaptive Systems
– Organizational Learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 4
Purpose and Overview
• Overview
– Limits of Organizational Learning
– Managing Organizational Innovation
– Implementing Large-Scale Organizational
Change
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 5
Change in an Unpredictable,
Unknowable World
• Quantum Theory
– World is unpredictable and unknowable
– Change, activity, and interconnectedness add
unpredictability
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 6
Change in an Unpredictable,
Unknowable World
• Chaos Theory
– Future state of world is unknowable
– Small differences in conditions can lead to
different outcomes
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 7
Change in an Unpredictable,
Unknowable World
• Quantum Theory & Chaos Theory
– Changing the way we think about
organizations and roles of leadership and
management
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 8
Health Care Organizations as
Complex Adaptive Systems
• Complex Adaptive Systems
– Individual agents have freedom to act
unpredictable ways
– Actions are interconnected and can change
context for others
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 9
Health Care Organizations as
Complex Adaptive Systems
• Two Forms of Complexity
– Combinatorial
• Number of constituent elements
• Number of interrelationships
– Dynamic-Feedback Loops
• Reinforcing
• Balancing
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 10
Organizational Learning
• Learning is a feedback process
• Organizational learning embraces both
adaptive and generative learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 11
Organizational Learning
• Single-Loop Learning
– Look for solutions within organization’s
policies, plans, values, and rules
– Error-and-correction process
– Promotes adaptive learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 12
Organizational Learning
• Double-Loop Learning
– Closes gap between desired and actual states
of affairs by questioning
– Modifies organization’s policies, plans, values,
and rules to guide action
– Promotes generative learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 13
Organizational Learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 14
Organizational Learning
• Learning Organizations
– Continual expansion to create desired results
– New patterns of thinking are nurtured
– Collective aspiration is set free
– People learn to learn together
– New knowledge and capabilities remain even
if individuals leave
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 15
Organizational Learning
• Learning Disciplines
– Five disciplines
– Combine to “expand its capacity to create its
future”
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 16
Organizational Learning
• Learning Disciplines
– Systems Thinking
– Personal Mastery
– Mental Models
– Shared Vision
– Team Learning
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 17
Limits of Organizational Learning
• Challenges to Building Learning
Organizations
– Limited information available for decisions
– Unscientific reasoning
– Many practical problems and competing
priorities
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 18
Managing Organizational
Innovation
• Learning at center of innovation and
change
– Innovation
• Process using a technology or practice for
first time
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 19
Managing Organizational
Innovation
• Learning at center of innovation and
change
– Change
• Broader concept modifying organizational
composition, structure, or behavior
• New or not new to organization
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 20
Managing Organizational
Innovation
• Innovation is unpredictable and complex
– May differ significantly for different types of
innovations
– Strong pro-innovation bias
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 21
Managing Organizational
Innovation
• The Innovation Model - Overview
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 22
Managing Organizational
Innovation
• The Innovation Model – Agenda Setting
– Identify important problems and search for
innovations
– Triggered by performance gaps
– Two key factors
• Who participates in agenda process
• How participants perceive information
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 23
Managing Organizational
Innovation
• The Innovation Model – Matching
– Needs and capacities matched to innovation
– Feasibility
– Decision to adopt or not adopt an innovation
– Interplay of factors
• Innovation characteristics
• Social system characteristics
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 24
Managing Organizational
Innovation
• The Innovation Model – Matching
– Innovation Characteristics
• Relative Advantage
• Compatibility
• Complexity
• Trial ability
• Observability
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 25
Managing Organizational
Innovation
• The Innovation Model – Matching
– Social System Characteristics
• Network Structure
• Homogeneity
• Opinion Leaders
• Boundary Spanners
• Absorptive Capacity
• Organizational Readiness
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 26
Managing Organizational
Innovation
• The Innovation Model – Restructuring
– Transition period
– Implementation involves adaptation of
innovation within organization
– Organizational adaptation generally involves
implementation of policies and practices
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 27
Managing Organizational
Innovation
• The Innovation Model – Clarifying
– Organizational members
• Gain experience
• Learn about its implications
• Compare actual versus expected benefits
and costs of innovative
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 28
Managing Organizational
Innovation
• The Innovation Model – Clarifying
– Innovation either diffuses or stalls
– Critical factors for success
• Innovation effectiveness
• Implementation effectiveness
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 29
Managing Organizational
Innovation
• The Innovation Model – Clarifying
– Disseminating innovations throughout
organization
• Diffusion
• Dissemination
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 30
Managing Organizational
Innovation
• The Innovation Model – Routinization
– Final stage in innovation process
– Incorporated into regular activities
– Loses its identity as something new and
different
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 31
Managing Organizational
Innovation
• The Innovation Model – Routinization
– Depends on whether members perceive
innovation as legitimate and valued
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 32
Managing Organizational
Innovation
• The Innovation Model – Routinization
– Depends on allocation of resources
• Budgetary
• Personnel
• Training programs
• Organizational policies and procedures
• Supply and maintenance operations
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 33
Managing Organizational
Innovation
• The Innovation Model – Routinization
Strategies
– Encourage participation by end-users in
decision-making processes
– Provide members latitude to "reinvent" or
"adapt" the innovation
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 34
Implementing Large-Scale
Organizational Change
• Large-scale change implemented in a top-
down, linear manner is questionable
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 35
Implementing Large-Scale
Organizational Change
• Emergent and Incremental Steps
– Problems and solutions arise through
interactions across organization
– Communication with members is important
– Consider work processes and environmental
factors
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 36
Implementing Large-Scale
Organizational Change
• Kotter’s Transformation Model
– Eight steps to create and sustain change
1) Establish urgency
2) Create guiding coalition
3) Develop vision
4) Communicate change vision
Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 37
Implementing Large-Scale
Organizational Change
• Kotter’s Transformation Model
– Eight steps to create and sustain change
5) Empower broad-based action
6) Create short-term wins
7) Consolidate gains
8) Anchor new approaches in culture

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Hcm iml 12

  • 2. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 2 Purpose and Overview • Purpose – To understand innovation and change as complex and nonlinear sequences of events
  • 3. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 3 Purpose and Overview • Overview – Change in an Unpredictable, Unknowable World – Health Care Organizations as Complex Adaptive Systems – Organizational Learning
  • 4. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 4 Purpose and Overview • Overview – Limits of Organizational Learning – Managing Organizational Innovation – Implementing Large-Scale Organizational Change
  • 5. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 5 Change in an Unpredictable, Unknowable World • Quantum Theory – World is unpredictable and unknowable – Change, activity, and interconnectedness add unpredictability
  • 6. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 6 Change in an Unpredictable, Unknowable World • Chaos Theory – Future state of world is unknowable – Small differences in conditions can lead to different outcomes
  • 7. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 7 Change in an Unpredictable, Unknowable World • Quantum Theory & Chaos Theory – Changing the way we think about organizations and roles of leadership and management
  • 8. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 8 Health Care Organizations as Complex Adaptive Systems • Complex Adaptive Systems – Individual agents have freedom to act unpredictable ways – Actions are interconnected and can change context for others
  • 9. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 9 Health Care Organizations as Complex Adaptive Systems • Two Forms of Complexity – Combinatorial • Number of constituent elements • Number of interrelationships – Dynamic-Feedback Loops • Reinforcing • Balancing
  • 10. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 10 Organizational Learning • Learning is a feedback process • Organizational learning embraces both adaptive and generative learning
  • 11. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 11 Organizational Learning • Single-Loop Learning – Look for solutions within organization’s policies, plans, values, and rules – Error-and-correction process – Promotes adaptive learning
  • 12. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 12 Organizational Learning • Double-Loop Learning – Closes gap between desired and actual states of affairs by questioning – Modifies organization’s policies, plans, values, and rules to guide action – Promotes generative learning
  • 13. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 13 Organizational Learning
  • 14. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 14 Organizational Learning • Learning Organizations – Continual expansion to create desired results – New patterns of thinking are nurtured – Collective aspiration is set free – People learn to learn together – New knowledge and capabilities remain even if individuals leave
  • 15. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 15 Organizational Learning • Learning Disciplines – Five disciplines – Combine to “expand its capacity to create its future”
  • 16. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 16 Organizational Learning • Learning Disciplines – Systems Thinking – Personal Mastery – Mental Models – Shared Vision – Team Learning
  • 17. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 17 Limits of Organizational Learning • Challenges to Building Learning Organizations – Limited information available for decisions – Unscientific reasoning – Many practical problems and competing priorities
  • 18. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 18 Managing Organizational Innovation • Learning at center of innovation and change – Innovation • Process using a technology or practice for first time
  • 19. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 19 Managing Organizational Innovation • Learning at center of innovation and change – Change • Broader concept modifying organizational composition, structure, or behavior • New or not new to organization
  • 20. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 20 Managing Organizational Innovation • Innovation is unpredictable and complex – May differ significantly for different types of innovations – Strong pro-innovation bias
  • 21. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 21 Managing Organizational Innovation • The Innovation Model - Overview
  • 22. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 22 Managing Organizational Innovation • The Innovation Model – Agenda Setting – Identify important problems and search for innovations – Triggered by performance gaps – Two key factors • Who participates in agenda process • How participants perceive information
  • 23. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 23 Managing Organizational Innovation • The Innovation Model – Matching – Needs and capacities matched to innovation – Feasibility – Decision to adopt or not adopt an innovation – Interplay of factors • Innovation characteristics • Social system characteristics
  • 24. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 24 Managing Organizational Innovation • The Innovation Model – Matching – Innovation Characteristics • Relative Advantage • Compatibility • Complexity • Trial ability • Observability
  • 25. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 25 Managing Organizational Innovation • The Innovation Model – Matching – Social System Characteristics • Network Structure • Homogeneity • Opinion Leaders • Boundary Spanners • Absorptive Capacity • Organizational Readiness
  • 26. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 26 Managing Organizational Innovation • The Innovation Model – Restructuring – Transition period – Implementation involves adaptation of innovation within organization – Organizational adaptation generally involves implementation of policies and practices
  • 27. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 27 Managing Organizational Innovation • The Innovation Model – Clarifying – Organizational members • Gain experience • Learn about its implications • Compare actual versus expected benefits and costs of innovative
  • 28. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 28 Managing Organizational Innovation • The Innovation Model – Clarifying – Innovation either diffuses or stalls – Critical factors for success • Innovation effectiveness • Implementation effectiveness
  • 29. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 29 Managing Organizational Innovation • The Innovation Model – Clarifying – Disseminating innovations throughout organization • Diffusion • Dissemination
  • 30. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 30 Managing Organizational Innovation • The Innovation Model – Routinization – Final stage in innovation process – Incorporated into regular activities – Loses its identity as something new and different
  • 31. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 31 Managing Organizational Innovation • The Innovation Model – Routinization – Depends on whether members perceive innovation as legitimate and valued
  • 32. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 32 Managing Organizational Innovation • The Innovation Model – Routinization – Depends on allocation of resources • Budgetary • Personnel • Training programs • Organizational policies and procedures • Supply and maintenance operations
  • 33. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 33 Managing Organizational Innovation • The Innovation Model – Routinization Strategies – Encourage participation by end-users in decision-making processes – Provide members latitude to "reinvent" or "adapt" the innovation
  • 34. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 34 Implementing Large-Scale Organizational Change • Large-scale change implemented in a top- down, linear manner is questionable
  • 35. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 35 Implementing Large-Scale Organizational Change • Emergent and Incremental Steps – Problems and solutions arise through interactions across organization – Communication with members is important – Consider work processes and environmental factors
  • 36. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 36 Implementing Large-Scale Organizational Change • Kotter’s Transformation Model – Eight steps to create and sustain change 1) Establish urgency 2) Create guiding coalition 3) Develop vision 4) Communicate change vision
  • 37. Copyright © 2006 by Thomson Delmar Learning. ALL RIGHTS RESERVED. 37 Implementing Large-Scale Organizational Change • Kotter’s Transformation Model – Eight steps to create and sustain change 5) Empower broad-based action 6) Create short-term wins 7) Consolidate gains 8) Anchor new approaches in culture

Editor's Notes

  1. The world is both unpredictable and fundamentally unknowable The very act of measurement alters the physical systems we hope to understand. Continuous change, activity, and interconnectedness add an element of unpredictability to any system. Planned, controlled, orderly approaches to innovation or change are unlikely to perfectly achieve their intended outcomes
  2. The future state of the world is unknowable because physical systems are highly sensitive to initial conditions. Small differences in initial conditions can lead to radically different outcomes
  3. Reinforcing feedback loops Amplify or intensify whatever is happening in a system Balancing feedback loops Counteract or oppose whatever is happening in a system
  4. Promotes adaptive learning Adjusting behavior and processes in response to changing events or trends Promotes generative learning Eliminate problems by changing the underlying structure of the system.
  5. Promotes adaptive learning Adjusting behavior and processes in response to changing events or trends Promotes generative learning Eliminate problems by changing the underlying structure of the system.
  6. Five disciplines that each involve a body of theory and techniques that must be practiced in order for mastery to develop. When combined, these produce an organization capable of “expanding its capacity to create its future.”
  7. Systems Thinking Seeing wholes, perceiving the structures that underlie dynamically complex systems, and identifying high-leverage change opportunities Personal Mastery Individual learning, without which organizational learning cannot occur Mental Models Constantly surfacing, testing, and improving our assumptions Shared Vision Generating a common answer to the question, “What do we want to create?” Team Learning Creating alignment Team members think insightfully about complex problems, synergize their knowledge and skills, and produce coordinated action
  8. Relative Advantage Innovation perceived as superior to current practice Compatibility Consistent with the values, beliefs, history, current practices Complexity Difficult to understand or use Trialability Experiment with the innovation on a limited basis Observability Results of an innovation are visible to others
  9. Network Structure Greater variation between local communities than within them. Homophily – changed to homogeneity Similarity between individuals, groups, or organizations Opinion Leaders Hubs in social and professional networks Boundary Spanners Significant social ties both inside and outside the organization Absorptive Capacity Ability to acquire, assimilate, and apply new knowledge Organizational Readiness Function of motivation, resources, and climate
  10. Transition period Targeted organizational members ideally become increasingly skillful, consistent, and committed in their use of an innovation Implementation commonly involves mutual adaptation of the innovation and the organization Organizational adaptation generally takes the form of implementation policies and practices Formal strategies to put the innovation into use, and the actions that follow from those strategies
  11. Critical factors for success Innovation effectiveness The benefits the organization realizes from innovation use Implementation effectiveness The overall consistency and quality of organizational members’ use of an innovation
  12. Critical factors for success Innovation effectiveness The benefits the organization realizes from innovation use Implementation effectiveness The overall consistency and quality of organizational members’ use of an innovation
  13. Diffusion A passive process Information about an intervention, product, or technology is initially absorbed and acted upon by a small body of highly motivated recipients. Dissemination An active process Special efforts are made to ensure that intended users become aware of, receive, accept and use an innovation
  14. Questionable whether successful large-scale change efforts can be implemented in a top-down, linear, planned manner. Successful large-scale organizational change often occurs through emergent, incremental steps Both problems and solutions arise through repeated interactions among leaders, organizational members, work processes, and environmental factors
  15. Questionable whether successful large-scale change efforts can be implemented in a top-down, linear, planned manner. Successful large-scale organizational change often occurs through emergent, incremental steps Both problems and solutions arise through repeated interactions among leaders, organizational members, work processes, and environmental factors