Management of Innovation in Engineering

Copyright © AMGI 2014

31st March2 20141

ILead – Introduction to the Management of Innovation

ILead: Graduate Workshop Series-

Introduction to Management of

Innovation Workshop – A Primer

3rd April 2014

Stephen C Armstrong

University of Toronto


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Time

Topic

Time

Topic

6:00 – 6:05 PM Welcome – Set the Stage and Scope

6:05–6:20 PM I Lecture-Introduction To Innovation –
What is Innovation? What are the challenges of
strategic leadership and innovation?

!  4 Types of Innovation

!  7 Critical Components of Innovation

!  4 Quadrants of Innovation Impact and Risk

6:20 - 6:40 PM

I Breakout Session

!  Provide examples of innovation in each of the 4 quadrants and
present

6:40 –7:00 PM II Lecture – Managing Strategic
Change - What is the nature of organizational change?
How can organizational change be managed and
“engineered”?

!  Design thinking - Setting Direction and Visioning

! Managing Change – Engineering Success

! Case Study- BAE Systems

7:00 – 7:20 PM II Breakout Session

! Provide examples of resistance to change

! Provide remedies

7:20 – 7:40 PM III - Introduction Effective
Organizational Teamwork - What is organization
development? How can stress be managed in a
change environment?

!  Components of EOT

!  Core Foundation Principles

!  Problem Solving and Decision Making

7:40 – 8:00 PM II Breakout Session

!  Provide examples you have experienced of poor
EOT

!  Provide Remedies

Introduction to the Management of Innovation Workshop Agenda


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ILead – Introduction to the Management of Innovation

Study Questions To Answer…….

1.  What is Innovation?

2.  What are the challenges of strategic leadership
and innovation?

3.  What is the nature of organizational change?

4.  How can organizational change be managed
and “engineered”?

5.  What is organization development?

6.  How can stress be managed in a rapidly
changing environment?


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Student Pre -Seminar input -challenges of strategic
innovation and leadership

•  The biggest challenge: does anyone even know what strategic
innovation and leadership means?

•  In any case, the biggest challenge is identifying the true
problem, and understanding WHY you need to resolve it. If
you don't know WHY, you can't motivate others to
strategically solve it through strategic innovation by
employing strategic leadership techniques.

•  Bringing together technical and management skills. People
with technology background lack management skills, and vice
versa. Allocation of resources would be the biggest.

•  The difﬁculty with strategic innovation is getting buy-in from
other members of the organization, customers, investors, etc.
An innovative idea is only good if others can buy into it.

•  Ensuring you invest in the most fruitful endeavors and not in
bottomless pits.


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Student Pre -Seminar input -challenges of strategic
innovation and leadership

•  In the end, it boils down to the people and what they get from
doing their part. This is the key to sustainability and innovation.

•  Once you attract the right people, they will naturally work well
together, innovate and attract their friends to follow in their
steps in following years.

•  The major challenge would be to establish a culture of
innovation where mistakes are not frowned upon. I

•  think in most traditional engineering businesses, the idea of
taking risks is not encouraged and that is detrimental to a
culture of innovation


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Student Pre -Seminar input - Organization Change

•  Organization change is the adaptation of an organization to meet the needs
of its changing customer base, social trends, etc.

•  Organizations are forced to change to keep up with the rest of the world.

•  This sometimes involved rethinking the way they operate and do business.

•  When this happens, the same people cannot keep doing the same task over
and over as their jobs might have evolved.

•  These changes are not easy and the challenge for leaders is to change their
organization but keep its value clear.

•  Change in the basic ideas of the organization, as well as adapting to the
changing environment Organization change is any change that affects the
regular operation or culture of an organization.

•  That can include position changes, implementation of new procedures, or
shift in operational focus.

•  Being willing to be dynamic and accept market changes by revising
strategies and not staying comfortable.

•  Introducing TRUST into the organization.

•  Changing structure to ﬁt function


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Student Pre -Seminar input How can you engineer and
optimize organization change?

•  I think companies working within a matrix structure are getting close to an optimized result.

•  Most changes nowadays can have measurable impact on a number of recordable metrics.

•  The engineer's job is to guide the analysis of these metrics and help design an optimized
solution that will maximize or minimize these metrics.

•  A good example of this is the growing place of engineers in management consulting firms.

•  You can engineer organization change by firstly doing a thorough analysis of what the
intended outcomes should be. From there, a problem definition and scope can be generated.

•  Afterwards, it would be important to identify the relevant state of the organizational
environment and see which stakeholders would be most affected or influential in your change
process. After that, it would generally be down to a human factors issue of being able to
introduce the change that you want in a way that is conducive to the working capabilities and
acceptable norms of the organization.

•  Optimizing it can start with seeking consulting help from an external company. To approach it
internally a well developed and thought out plan is essential. Involving all members for input is
also a benefit.

•  Revisit roles and strategies within teams to ensure consistent overall organizational objectives.
Inter department cooperation and communication.

•  Start thinking more about the people, and not so much about the product. Through co-operation
and team-work under a visionary leader of the organization You can predict potential
change and make adjustments early on so that when the change occurs it has less impact to the
organization


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Student Pre -Seminar input How -can organizations manage stress?

•  Introduce TRUST, where colleagues feel comfortable in their work environments.

•  Innovation incentives - gives the employees the opportunity to work on what they think is
right

•  constant open communication. Due to the fact that things are always changing, deadlines
can easily be missed, work changed, and people put in positions where they lack
knowledge, skills, or expertise.

•  Instead of trying to ﬁgure things out as individuals and worrying about failure, it's
important that organizations promote the vocalization of issues collaboratively

•  You often need to have a leader to follow, someone that will guide you in this change.

•  Instead, what is best to do is to have everyone attend an introduction session on the new
program and teach the program in depth to one one of two workers which were chosen by
management to guide and help their fellow coworkers when they have question.

•  Organizations can ensure that their deadlines and expectations do not exceed the
capabilities of the working staff. Leaders attending to the needs of the team.

•  Ensuring that everyone is informed of objectives and goals. Try to strengthen the
relationships between the various levels of the organization.

•  This can be done by introducing sports activities and inter murals within the company/
organization Always foster a creative progressive work environment.

•  Allowing for work at home if needed, and work activities such as exercise programs.

•  When in doubt look at companies which are thriving – best practices (google)


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I Introduction To Innovation

1)  What is innovation?

!  4 Types of Innovation

!  7 Critical Elements in Applying Innovation

!  4 Classifications of Technology

!  Creativity and Innovation

!  The 4 Quadrants of Innovation Impact

!  Drivers of Innovation

!  The Economic Conception of Innovation - Schumpeter

!  Kondratiev Waves – Innovation at Faster Pace

!  Collision of Economic waves -Toffler

!  The Economic Benefits from Innovation - Productivity
Gains?

!  Diffusion of Innovation


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4 Types of Innovation


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7 Critical Elements in Applying Innovation
AI ELEMENTS:

1) Strategy: Organizational strategy should be
developed in a timely manner and kept in dynamic
balance- driven by compelling future state vision.

2) Technology: Technology enables innovation and is
the key source for enterprises to accumulate core
competence and accordingly to obtain the competitive
sustainable advantage. Technology drives new
product and process performance

3) Management Philosophy: This refers to the
innovation of managerial science, thought, paradigms,
methods, and tools. For example IPD/CE, Lean, CQI
or 6 Sigma management mode of GE is one of typical
management innovation. Socio Tech Systems.


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AI ELEMENTS:

4) Organization: Organizational structure must be
adjusted correspondingly according to the demands
of innovation including new business processes, and
workﬂow.

5) Culture: Changes in mind set and culture is the
prerequisites to carry out all innovation. In Google for
instance there is a strong innovative culture to
encourage innovation and tolerating failures.

6) People Systems: System innovation means the
innovation of rules and regulations about
enterprise’s routine, performance evaluating, staff
rewards and punishments, salary system, training
and promotion and so on.


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Systemic Approach to Innovation

Marketing
Innovation

Organizational
Innovation

Product
Innovation

Strategy
Innovation

Technology
Innovation

Process
Innovation

Business
Innovation

Source: Vadim Kotelnikov



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4 Classiﬁcations of Technology

•  Emerging Technology – Technologies that are not
widely known e.g. bio-chips

•  Pacing Technology - have the potential to change the
entire basis of competition, but have not yet been
embodied in a product or process

•  Key Technology - currently yielding competitive
advantage

•  Base Technology - although necessary and essential to
practice, offer little competitive advantage


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What is Creativity Innovation?

They are symbiotic but not the
same……..


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Expertise

Motivation

Creative
Thinking
Skills


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Creativity Thinking Skills in Innovation

1.  Multi-Screen Thinking vs. Spot Thinking

2.  Abstract Thinking vs. Speciﬁc Thinking

3.  Breakthrough Thinking vs. Trade-off Thinking

4.  Intensiﬁcation Thinking vs. Sheltered Thinking

5.  Non-linear Thinking vs. Linear Thinking

6.  Diversity Thinking vs. Uniformity Thinking

7.  Structured Thinking vs. Random Thinking

8.  Ideality Thinking vs. Consumption Thinking

9.  Ultimate Goal Thinking vs. Shallow Thinking

10.  Evolutionary Thinking vs. Random Thinking

11.  Long-Term Thinking vs. Short-Term Thinking

12.  Wild Thinking vs. Grounded Thinking

13.  Analytical Thinking vs. Jump-to-Solution Thinking

14.  Problem Flow Thinking vs. Single Solution Thinking

Source: Valeri Souchkov, Power Thinking Skills For Innovative Leadership


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Some of Creativity Tools For Applying Innovation


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V Types of Innovation Impact

• Incremental innovation:
Improvements within a given frame of
solutions (“doing better what we
already do”);

• Disruptive Innovation: (“doing what
we already do in new spaces”)

• Radical innovation: A
change of frame (“doing what we did
not do before”).


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4 Quadrants of Innovation Impact

Technology

Market


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Incremental

Innova-on

Radical
Innova-on

2.
It’s
competence-‐enhancing

because
it
builds
upon

exis-ng
knowledge,

resources
and
enters
new

markets

3
It’s
competence-‐destroying

because
it
needs
new

knowledge
and
resources
to

create
new
technology
and

markets

1.
It
brings
about
changes

wherein
the
exis-ng

products
will
s-ll
be
viable
in

exis-ng
markets

4
It
brings
about
very
great

development

that
push
down

exis-ng
products
into

obsolescence
exis-ng
markets

4 Quadrants of Innovation Impact


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Incremental vs. Radical Change


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4 Quadrants of Innovation Risk Analysis


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Relative risks (a la Darryl)…

4 Quadrants – Risk Analysis
Ref: 2005 Dr R Siriram adapted from Darryl Aberdein 2001


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Examples of Disruptive Innovations

Here are some examples pulled together from Clayton Christensen’s work
and elsewhere:

•  The Personal computer: When first introduced, the PC did not provide the computational
power or speed of existing mainframe or minicomputers. The PC created completely new
segments of computer users such as home users, small office home office (SOHO) users,
and students.

•  Low-cost airlines: When they started, low-cost airlines like Southwest did not provide
many of the features that business customers expected like fixed seating, first class, meals
on-board, or interline connections to other flights. Southwest, in particular, created a new
market of short-haul air travelers by offering a service that competed with travelling by
road.

•  Table-top copiers: First introduced by Japanese companies Ricoh and Canon, table-top
photocopiers were much slower and offered less flexibility than the large copiers being sold
by Xerox. But, these sleek copiers met the limited needs of individual managers or
departments in corporations to get a few quick copies made to meet immediate needs.

•  Microfinance: This social innovation does not have all the sophistication of a traditional
banking product but meets the financial needs of people who were traditionally outside the
purview of the banking system.

•  Online education: While online classes sacrifice some of the rich discussions possible in a
face-to-face classroom setting, they offer an opportunity for people who can’t spare the time
to attend classes to educate themselves. With cheaper bandwidth and improvements in
technology, they have the potential to displace classroom teaching in several contexts.


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Drivers of Innovation: Market Pull - RD Push

•  Market pull

!  looking for the best way of satisfying a newly
emerging customer demand

!  Improvement of the existing products, extension of
the existing offer or decrease of price

!  Impulses for continuous, incremental product
innovations or for process innovations

•  Research and Development Push

!  looking for commercial use of new impulses
resulting from the RD results

!  Generating new markets for conceptually different
products


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Drivers of Innovation - Open Innovation

! Open Innovation is an intentional course of
action for identifying and exploiting internal
and external novel initiatives in order to
develop new products and services.

! It involves multi-stage collaboration with
other entities outside a ﬁrm, in order to value
capture and optimize the standard and value
of the ﬁnal product.


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Sources of External Novel Initiatives in Open
Innovation……………

! Competitors

! Distributors

! Suppliers

! Freelance Commentators

! Contract Research Organizations

! Independent Research Organizations

! Practicing Experts Consultants

! Customers

Drivers of Innovation - Open Innovation


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Joseph Schumpeter - – Creative Destruction

In the Theory of Economic Development 1934,

Joseph Schumpeter deﬁned economic innovation as:

1. The introduction of a new good, or of a new quality of a
good

2. The introduction of a new method of production, which
does not need to be founded on new scientiﬁc discoveries,
but can exist in a new way of commercially handling a
commodity

3. The opening of a new market into which a particular
manufacturer has not previously entered, whether or not
this market has existed before

The Economic Conception of Innovation


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Joseph Schumpeter – Creative Destruction

In the Theory of Economic Development 1934,

Joseph Schumpeter defined economic innovation as:

4. The securing of a new source of supply of raw
materials or half manufactured goods, irrespective of
whether this source already exists or whether it has first
to be created.

5. The creation of a new organization in an industry, or a
new monopoly position through trustification
(monopolistic system – Oil)

The Economic Conception of Innovation


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Big Innovation Cycles-Schumpeter


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Big Innovation Cycles-Schumpeter


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Kondratiev Waves – Innovation at Faster Pace

in honor of Nikolai Kondratiev, the Russian economist who ﬁrst postulated their existence.


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Collision of Economic waves - Tofﬂer


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The Economic Beneﬁts from Innovation - Productivity Gains?
1980 – Realization Innovation is all about knowledge assets -
more important than physical assets


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Economics Beneﬁts - The National Level

Country - 2006
Labour
Productivity
Labour
Utilization
GDP MFP
% Labour
Productivity
Explained
by MFP
Innovation
Ranking
Japan 1.1 0.9 2.0 1.1 100% 1
Germany 2.8 0.3 3.1 2.5 89% 2
France 2.7 -0.5 2.2 2.0 74% 3
UK 2.3 0.5 2.8 1.6 70% 4
USA 0.8 1.8 2.6 0.4 50% 5
Italy 0.3 1.7 2.0 0.1 33% 6
Canada 1.0 1.8 2.8 0.3 30% 7
Source: OECD Database
One can reasonable conclude that Canada's lower rate of MFP (Multi
Factor Productivity) growth reflects a slower pace of organizational and
technological change.
Canada versus G7 nations - 2006


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Transformational Innovation - Beyond R D

Economics Beneﬁts - The National Level


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A big picture - decision making process
The rate of awareness-knowledge for
an innovation is more rapid than its rate of adoption
Stages in the innovation Diffusion


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I Introduction To Innovation

2) What are the challenges of
strategic leadership and
innovation?


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Study Question 2: What are the challenges of strategic innovation?

 Strategic leadership creates the capacity
for ongoing strategic change.

 Components of strategic leadership:

! Determining the organization’s purpose or
vision.

! Exploiting and maintaining the organization’s
core competencies.

! Developing the organization’s human capital.

! Sustaining an effective organizational culture.

! Emphasizing and displaying ethical practices.

! Establishing balanced organizational controls.


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Business Strategy



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Top Management Role in Organization Direction, Design, and Effectiveness

©2000

South-Western College Publishing

Cincinnati, Ohio

Daft, Organization Theory and Design 7/e

CEO, Top

Management

Team

External Environment

Opportunities

Threats

Uncertainty

Resource Availability

Internal Environment

Strengths

Weaknesses

Distinctive competence

Leadership Style

Past Performance

Strategic Management

Organization

Design

Effectiveness

Outcomes

Define

mission,

official

goals

Select

operational

goals,

collaborative

strategies

Resources

Efficiency

Goal attainment

Stakeholders

Competing values

• Structural Form –

learning vs.

efficiency

• Information and

control systems

• Production

technology

• Human resource

policies,

incentives

• Organizational

culture

• Interorganizational

linkages

Source: Adapted from Arie Y. Lewin and Carroll U. Stephens,

“Individual Properties of the CEO as Determinants of Organization

Design,” unpublished manuscript, Duke University, 1990; and Arie Y. Lewin

and Carroll U. Stephens, “CEO Attributes as Determinants of Organization Design:

An integrated Model,” Organization Studies 15, no. 2 (1994): 183-212


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! Sustainable competitive advantage relies
on creativity and innovation.

! Creativity is the generation of a novel idea
or unique approach to solving problems
or crafting opportunities.

! Innovation is the process of creating new
ideas and putting them into practice.

! Solving Problems on existing issues is
also a major innovation practice


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Study Question 2: What are the challenges of strategic leadership and innovation?

In highly innovative organizations …

!  Corporate strategy and culture should:

• Emphasize an entrepreneurial spirit.

• Expect innovation.

• Accept failure.

• Be willing to take risks.

!  Organization structure should:

• Be organic.

• Have lateral communications.

• Use cross-functional teams and task forces.


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In highly innovative organizations …

! Top management should:

• Understand the innovation process.

• Be tolerant of criticism and differences of opinion.

• Take all possible steps to keep goals clear.

• Maintain the pressure to succeed.

• Break down barriers to innovation.

!  Staffing should fulfill five critical innovation roles:

• Idea generators.

• Information gatekeepers.

• Product champions.

• Project managers.

• Innovation leaders.


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Leadership responsibilities for the
innovation process:

! Imagining

! Designing

! Experimenting

! Assessing

! Scaling


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Four steps of the product innovation
process:

! Idea creation.

! Initial experimentation.

! Feasibility determination.

! Final application.


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Process of commercializing innovation in organizations:
the case of new product development.



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Iterations of an Innovation Funnel


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7 Dimensions of the Process of Strategic Innovation

1.  A Managed Innovation Process: Combining non-traditional and
traditional approaches to business strategy.

2.  Strategic Alignment: Building support.

3.  Industry Foresight: Understanding articulated emerging
trends.

4.  Consumer/ Customer Insight: Understanding articulated and
unarticulated needs.

5.  Core Technologies and Competencies: Leveraging and
extending corporate assets.

6.  Organizational Readiness: The ability to take action.

7.  Disciplined Implementation: Managing the path from
inspiration to business impact.

Source: Innovation Point


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Traditional Ideas Funnel

Ideas

Targeting, Evaluation, Selection

Products

or
Services


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“Open” Innovation Funnel


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Filling the Funnel with concepts

Opportunities

Ideas

Technologies

Products

“Inside” the corporation

Trends

Ideas

Technologies

From internal RD

From brainstorming, idea management systems

Ideas

Technologies

Products

From open innovation, crowdsourcing, suggestion systems

From partners, proprietary networks, RFPs

From entrepreneurs, business partners, acquisitions

“Outside”” the corporation

To partners or entrepreneurs

“Spin out”

“Spin in”

Customers, Prospects,
Partners, Competitors


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Innovation Funnel Planning

Task 1

Task 6

Task 5

Task 4

Task 3

Task 2

Develop

Criteria

Trends

Research

Interview

Preparation

interviews

Key innovation

Step

Task 7

Creative

Clustering

and

Screening

Evolution

Final

Ranking

 Form team

 Deﬁne goal

 Develop

Screening and

Ranking criteria

 Interview

Experts with

broad know-

ledge

 Identify key

Market trends

 Identify target

Segments to

interview

 Construct draft

innovation map

 Interview user

with a good know-

ledge of target

consumer

 Interview users

from other markets

facing similar

challenges

 Use networking

to identify

interviewees

 Collect ideas and feeds

insights into innovation

map after every

interview stage to reﬁne

interview scope and

direction

 Cluster ideas

/insights into

proposition

for product

and services

 Apply screening

criteria into

proposition

 Workshop with

project team

and key

Experts

 Evolve

propositions

 Rank to

select most

promising

concepts

 Further

desk-based

research/

interviews

 Rank to select

best concepts

The interview step is just part of a more complex process to nurture innovation

8 - 12 Weeks

The Innovation Process Work Program

Task 1

Task 6

Task 5

Task 4

Task 3

Task 2

Develop

Criteria

Interview

program

Brainstorming

session

Creative

Clustering

screening

Task 7

Evolution
and initial

ranking

Concept

Evolution

Consumer

Test

Final

Ranking

 Deﬁne scope

Agreed list of

calibrated

Criteria

for screening

and ranking

 Interview with

external Experts,

to understand

the consumer

needs and

requirements

 400 ideas

documented

 20-25 ideas

clusters,

documented

 Up to 10

outline concepts

 4-6 qualiﬁed

concepts

 3-5 concepts

ready for

development

These insights were used to stimulate an internal brainstorming session

Case studies- Case study 1


Task 1-3

Task 6

Task 5

Task 4

Initial

Workshops

And

research

interviews

Task 7

Creative

Clustering

and

Screening

Concept

Evolution

Final

Ranking

 State objective

 Deﬁne

agree screening

ranking criteria

 Produce a draft

solutions map to

outline the

direction of search

 Target market-feet on ground practical approach to

the task to identify incrementally better solutions

 Interview with experts in cosmetics hair removal and

user hair removal products alternative markets-blue sky

 Radical approach to the task to identify unique solutions

 Interview with experts in alternative markets who use

similar technology-have similar needs, e.g. in medical

Experts in baldness and hair removal, surgeon.

Anesthesiologists, etc, etc.

 Combine ideas

Into value

propositions

 Use screening

criteria to select

the most

promising

propositions

 Workshop with

project team

and key

lead users

 Evolve

Proposition

Towards

Completed

Concepts

 Rank to select

most promising

concepts

 Further

desk-based

research/

interviews

 Rank to select

best concepts

Users from both the target market and alternative markets were interviewed

as part of the key innovation step within the Innovation Process

Product
Successfully

Launched

Three years ago



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Six Steps in the Managerial Decision Making Process


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VI Six Steps in the Managerial Decision Making Process


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Phase 1 — Steps 1-8 Get processes under control
7.
Conﬁrm process/issue focus
9. to 17.
Process Improvement
Phase
8.
Set Improvement
Objectives
and Schedule
6.
Implement Processes,
Standards, Measures
Next level
analysis
?
Yes
1.
2.
No
1.
Start-up Team
5.
Agree on Standards
Design
Performance Measures
2.
Research Customer Needs
and Expectations
3.
Select Issue
and process
4.
Deﬁne/Design the
Process
Design
Required ?
NoYes


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Phase II - Steps 9 to 17 - Process improvement
1 to 8

Process Analysis

9.

Detail causes

Level 1

Level 2

Level 3

10.
Gather data on root
causes and analyze
(optional)
11.
Select root cause to
eliminate/investigate
Can we deﬁne

solutions

?

12.
Formulate alternative
solutions
13.
Evaluate and select
best solution
14.
Conduct experiment
(optional)
Is root cause

eliminated

?

15.
Document solutions
16.
Implement solutions
17.
Confirm improvement and
continuously monitor
9

11

12

13

7

10

2

No

YES

No

Yes

or

or

or


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X. Consensus decision making tools

•  Index of tools and techniques used in problem/opportunity
solving

Tools and techniques

Action planning

Bar chart

Brainstorming

Cause and effect diagrams

Check sheets

Column charts

Control charts

Cost/benefit analysis

Cost of quality

Design of experiments

Dot or scatter diagrams

Flowcharts

Force field analysis

Gantt chart

Is/is not analysis

Pareto charts

PERT chart

Pie chart

Shewhart cycle

Work flow analysis

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Effective problem solving requires the use of number of tools

Plan

Implement

Define


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• Bar Charts

!  Sample bar chart: packaging line cost per hundred


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How to brainstorm….

!  Strive for quantity

!  Ensure full participation

!  Don't criticize or evaluate

!  Encourage free thinking

!  Combine and build upon others’ ideas

!  Allow team members to pass

!  Prepare

!  Decide on an approach

!  Review rules

!  State and write topic

!  Repeat and record all ideas

!  Prompt additional responses

!  Reinforce participation

!  Don’t evaluate


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• Storyboarding or meta-planning

! Structured brainstorming which reinforces
participation

! Useful for encouraging all members to
contribute ideas

! Useful when a topic is fairly well deﬁned


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•  Cause And Effect Diagrams (Fishbone)


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•  Cause And Effect Diagrams – Example

!  Example of a cause and effect diagram


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Decomposing and Coding method


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• Multi-voting


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Task 13.2 — Select a solution


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Task 16.1 — Develop a brief implementation plan
❒  Interface with solution owners
❒  Do not use this form if only few tasks


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II Managing Strategic Change

3) What is the nature of
organizational change?


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Study Question 3: What is the nature of organizational change?

Change leader…….

! A change agent who takes leadership
responsibility for changing the existing pattern
of behavior of another person or social system.

Change leadership……

! Forward-looking.

! Proactive.

! Embraces new ideas.


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Change leaders versus status quo managers.



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Top-down change……..

! Strategic and comprehensive change that is
initiated with the goals of comprehensive
impact on the organization and its
performance capabilities.

! Driven by the organization’s top leadership.

! Success depends on support of middle-level
and lower-level workers.


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Bottom-up change…….

! The initiatives for change come from any and
all parts of the organization, not just top
management.

! Crucial for organizational innovation.

! Made possible by:

• Employee empowerment.

• Employee involvement.

• Employee participation.

• Employee self direction


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Integrated change leadership….

!  Successful and enduring change combines
advantages of top-down and bottom-up approaches.

!  Top-down:

• Breaks up traditional patterns- transformative.

• Implements difﬁcult economic adjustments.

!  Bottom-up:

• Builds capability for sustainable change.

• Builds capability for organizational learning.


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Transformational and Incremental change…..

! Unplanned change.

• Response to unanticipated events.

• Good leaders act on opportunities for reactive change.

! Planned change

• Aligning the organization with anticipated future
challenges.

• Activated by proactive leaders who are sensitive to
performance gaps.

• Transformational change = major and comprehensive
redirection.

• Incremental change = adjusting existing systems and
practices.


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How to lead transformational change….

!  Establish a sense of urgency for change.

!  Form a powerful coalition to lead the change.

!  Create and communicate a compelling change vision.

!  Empower others to move change forward.

!  Celebrate short-term “wins” and recognize those
who help.

!  Build on success; align people and systems with new
ways.

!  Stay with it - keep the message consistent; champion
the vision.


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External forces for change:

!  Globalization.

!  Market competition.

!  Local economic conditions.

!  Government laws and regulations.

!  Technological developments.

!  Market trends.

!  Social forces and values

Internal forces for change:

!  Arise when change in one part of the system creates
the need for change in another part of the system.

!  May be in response to one or more external forces.


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Organizational targets for change:

!  Tasks and activities

!  Workﬂow

!  People competencies

!  Culture

!  Technology and capabilities

!  Structure


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TIME
Rewarding CompletionUninformed Optimism
Hopeful Realism
Informed Pessimism
Informed Optimism
•  Honeymoon period
•  Ideas look good
•  Major obstacles appear to be
anticipated
•  Problems surface
•  Few solutions obvious
•  Morale drops
•  Resistance from within the team
•  Politics within the team fragmented
•  Turning point occurs
•  Sense of accomplishment
•  Problems still there, but
hopes based in reality
•  Steering group gets hands
on
•  Optimism continues to develop
•  Fresh burst of energy
•  Increasingly positive reporting
•  Continued visible support from steering group
•  Successful change made
•  “Official” change complete
•  Things different and better
•  New System institutionalized
Emotional Stages in the innovation Diffusion


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Stages of change commitment

Source: D.R. Conner, 1993
Negative
Perception
Decision
not to
Implement
DegreeofSupportfortheChange
Time
Understanding
Positive Perception
Installation
Adoption
Institutionalization
Internalization
Commitment
Threshold
Disposition
Threshold
Acceptance Phase
Commitment Phase
Contact

Awareness

Preparation

Phase

Unawareness

Confusion

Aborted
after initial
Implementation
Aborted after
extensive
Implementation


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II Managing Strategic Change

5) How can organizational
change be managed and
“engineered”?


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Study Question 4: How can planned org change be managed?

Phases of planned change………

! Unfreezing

• The phase in which a situation is prepared for
change and felt needs for change are developed.

! Changing

• The phase in which something new takes place
in the system, and change is actually
implemented.

! Refreezing

• The phase of stabilizing the change and
creating the conditions for its long-term
continuity.


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Lewin’s three phases of planned organizational change.



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Force-coercion strategy of change……

! Uses power bases of legitimacy, rewards, and
punishments to induce change.

! Relies on belief that people are motivated by
self-interest.

! Direct forcing and political maneuvering.

! Produces limited and temporary results.

! Most useful in the unfreezing phase – it shakes
things up – usually a tough individual


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Rational persuasion strategy of change…….

! Bringing about change through persuasion backed
by special knowledge, empirical data, and rational
argument.

! Relies on expert power.

! Relies on belief that reason guides people’s
decisions and actions.

! Useful in the unfreezing and refreezing phases.

! Produces longer-lasting and internalized change.


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Shared power strategy of change……

! Engages people in a collaborative process of
identifying values, assumptions, and goals from
which support for change will naturally emerge.

! Time consuming but likely to yield high
commitment.

! Involves others in examining socio-cultural
factors related to the issue at hand.

! Relies on referent power and strong
interpersonal skills in team situations.

! Relies on belief that people respond to socio-
cultural norms and expectations of others.


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Alternative change strategies and their leadership implications.



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Reasons for people resisting change…..

! Fear of the unknown

! Disrupted habits

! Loss of conﬁdence

! Loss of control

! Poor timing

! Work overload

! Loss of face

! Lack of purpose


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Methods for dealing with resistance to
change………

! Education and communication

! Participation and involvement

! Facilitation and support

! Facilitation and agreement

! Manipulation and co-optation

! Explicit and implicit coercion


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The Cultural Change Management Methodology

Monitor
Implement
Plan
1. Define the Change
6. Create Cultural Fit
7. Build Agent Capacity
8. Motivation Planning
9. Communication
Planning
10. Integrate Planning
4. Generate Sponsorship
3. Identify Change
Approach
5. Develop Target
Readiness
2. Assess the Climate


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III Introduction Effective Organizational Teamwork
5) Organizational Teamwork -
What is organization
development?


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Study Question 5: What is organization development?

Organization development (OD) is a…….

! comprehensive approach to planned
organizational change

! that involves the application of behavioral
science

!  in a systematic and long-range effort

! To improve organizational effectiveness.


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Organization development goals:

! Outcome goals focus on task accomplishments.

! Process goals focus on the way people work
together.

! OD seeks to develop the organization members’
capacity for self-renewal.

! OD is committed to change through freedom of
choice, shared power, and self-reliance.

! OD takes advantage of knowledge about human
behavior in organizations.


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The organization development process..

! Establish a working relationship.

! Diagnosis.

! Intervention.

! Evaluation.

! Achieve a terminal relationship.


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Organization development and the planned change process.



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Action research……

! The process of systematically collecting data on an
organization,

! feeding it back to the members for action planning,

! and evaluating results by collecting more data and
repeating the process as necessary.

! Is initiated when someone senses a performance
gap

! First stage in change management - listen


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Steps in the action research process….

! Problem sensing.

! Data gathering.

! Data analysis and feedback.

! Action planning.

! Action implementation.

! Evaluation and follow-up.


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Action research as a foundation of organization development.



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Individual OD interventions……..

! Sensitivity training (T-groups)

! Management training

! Role negotiation

! Job redesign

! Career planning


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Team OD interventions………

! Team building

! Team Facilitation

! Process consultation

! Inter-group team building

! Individual Coaching


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Organization-wide OD interventions……..

! Survey feedback

! Confrontation meeting

! Structural redesign

! Management by objectives (MBO)


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III - Introduction Effective Organizational Teamwork

6) How can stress be managed in a
change environment?


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Study Question 6: How can stress be managed in a changing environment?

Stress….

!  A state of tension experienced by individuals facing
extraordinary demands, constraints, or opportunities.

Stressors…..

!  Things that cause stress

!  Originate in work, personal, and non-work situations.

!  Have the potential to inﬂuence work attitudes,
behavior, job performance, and health.


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Study Question 6: How can stress be managed in a change environment?
Work factors as potential stressors:

! Includes:

• Excessively high or low task demands.

• Role conﬂicts or ambiguities.

• Poor interpersonal relationships.

• Too slow or too fast career progress.

! Work-related stress syndromes:

• Set up to fail.

• Mistaken identity.


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Personal factors as potential stressors…..

!  Includes needs, capabilities, and personality.

!  Stressful behavior patterns of the Type A personality:

• Always moving, walking, and eating rapidly.

• Acting impatient, hurrying others, disliking
waiting.

• Doing, or trying to do, several things at once.

• Feeling guilty when relaxing.

• Trying to schedule more in less time.

• Using nervous gestures such as a clenched ﬁst.

• Hurrying or interrupting the speech of others.


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Non-work factors as potential stressors……

! Includes:

• Family events.

• Economics.

• Personal affairs.

! “Spill-over” effect on the stress an individual
experiences at work.


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Consequences of stress….

! Constructive stress.

• Acts as a positive inﬂuence.

• Can be energizing and performance
enhancing.

! Destructive stress.

• Acts as a negative inﬂuence.

• Breaks down a person’s physical and mental
systems.

• Can lead to job burnout and/or workplace
rage.


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Potential negative consequences of a destructive
job stress-burnout cycle…



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Personal wellness:

! The pursuit of personal and mental potential
though a personal health-promotion program.

! A form of preventative stress management.

! Enables people to be better prepared to deal
with stress.

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