Title: MGTO120s Managing Change and Innovation
1 MGTO120s Managing Change and Innovation
2Where We Are
Basic Concepts (Ch1)
Basic Concepts (Ch1)
Organize (Ch 10, 11,12,13)
Context (ch3,4, 5)
Retrospect (ch2)
Plan (ch6, 7,8, 9)
Organize (Ch 10
Lead
Control
Context (ch3,4, 5)
Retrospect (ch2)
Plan (ch6, 7,8, 9)
Lead
Control
Innovation (Ch13)
Managing Change Innovation (Ch13)
3 Learning Objectives
- What Is Change?
- Define organizational change.
- Explain how managers are affected by change.
- Forces for Change
- Discuss the external and internal forces for
change. - Contrast internal and external change agents.
- Two Views of the Change Process
- Contrast the calm waters and white-water rapids
metaphors of change. - Explain Lewins three-step model of the change
process. - Discuss the environment that managers face today.
4Learning Objectives (contd)
- Managing Change
- Explain how managers might change structure,
technology, and people. - Explain why people resist change and how
resistance might be managed. - Contemporary Issues in Managing Change
- Explain why changing organizational culture is so
difficult and how managers can do it. - Discuss what it takes to make change happen
successfully.
5Learning Objectives (contd)
- Stimulating Innovation
- Explain why innovation isnt just creativity.
- Explain the systems view of innovation.
- Describe the structural, cultural, and human
resource variables that are necessary for
innovation.
6What Is Change?
- Organizational Change
- Any alterations in the people, structure, or
technology of an organization - Characteristics of Change
- Is constant yet varies in degree and direction
- Produces uncertainty yet is not completely
unpredictable - Creates both threats and opportunities
- Managing change is an integral partof every
managers job.
7Forces for Change
- External forces
- Marketplace
- Governmental laws
- and regulations
- Technology
- Labor market
- Economic changes
- Internal Forces
- Changes in organizational strategy
- Workforce changes
- New equipment
- Employee attitudes
How is the situation in HK?
8Change Process Viewpoints
- The Calm Waters Metaphor
- The environment is stable and predictable, so
change can be planed. - White-Water Rapids Metaphor
- The environment is uncertain and dynamic. It
requires that managers and organizations
continually adapt (manage change actively) to
survive.
9Kurt Lewins Model
- Successful change can be achieved through three
steps - Unfreezing the status quo
- Changing to a new state
- Refreezing to make the change permanent
- The limitation of this model
- Lewin described the change process as a break in
the organizations equilibrium state - It is impossible in a dynamic period
10The Change Process
11Three Categories of Change
12Types of Change
- Workforce
- Changing attitudes, expectations, perceptions,
and behaviors of the workforce - Organizational development (OD) to change
people and the quality of interpersonal work
relationships.
- Structural
- Changing the organizations structure or its
structural components - Technological
- Adopting new equipment or operating methods that
displace old skills and require new ones - Automation
- Computerization
13Managing Resistance to Change
- Why People Resist Change?
- The ambiguity and uncertainty that change
introduces - The comfort of old habits
- A concern over personal loss of status, money,
authority, friendships, and personal convenience - The perception that change is incompatible with
the goals and interest of the organization
14Figure 1. Manifestation of resistance to change.
Adapted from King Anderson (1995)
15Fortune Magazine, April 2005
- People around here agree we need to change, but
90 of them do not want to change themselves - -Ex-CEO Nobuyuki Idei, who picked Howard
Stringer, photo on right, as new Sony CEO, to
SHOCK the culture into change
16The Institutionalization in Cultural Persistence
- Take 5 monkeys in a cage, and place a banana in
the cage. One of the monkeys takes the banana.
Next do the same, but when the monkey takes the
banana throw freezing water on the monkeys. - Now remove one of the monkeys and replace with a
new monkey. Repeat process. The new monkey will
attempt to get the banana, but the other monkeys
will attack it to stop it. The new monkey doesnt
understand why, but it doesnt go for the banana. - Again replace an existing monkey with a new
monkey. Repeat process. The other monkeys,
including the monkey that doesnt know why, will
attack the new monkey when it goes to take the
banana.
17The Institutionalization in Cultural Persistence
(contd)
- Continue process until none of the original
monkeys is left. Even though they dont know why,
they will attack any monkey going for the banana. - Why? Thats the way things are done around here
- Zucker, 1977, ASR, 42 726-743.
18How to Change Organizational Culture
- To utilize comprehensive and coordinated strategy
- unfreeze the current culture
- implement new ways of doing things
- reinforce those new values
- To understand situational factors which make
cultural change more likely - dramatic crisis occurs
- leadership changes hands
- organization is young and small
- culture is weak
19Stimulating Innovation
- Creativity
- The ability to combine ideas in a unique way or
to make an unusual association. - Innovation
- Turning the outcomes of the creative process into
useful products, services, or work methods
20Systems View of Innovation
21- Mistakes will be made, but if a person is
essentially right, the mistakes he or she makes
are not as serious in the long run as the
mistakes management will make if it is
dictatorial and undertakes to tell those under
its authority exactly how they must do their job.
Management that is destructively critical when
mistakes are made kills initiative, and it is
essential that we have many people with
initiative if we are to continue to grow. - William
L. McKnight
22Which can kill innovation and creativity?
- Thats impossible!
- We dont do things that way around here.
- We tried it before.
- I wish it were that easy.
- Its against policy.
- When youve been here longer, youll see why.
- The experts say
- Who gave you permission to change the rules?
23Which can kill innovation and creativity?
- Lets get real, okay?
- thats not logical
- whats the evidence?
- the right answer
- avoid ambiguity
- to err is wrong
- please do not screw up again!
- quit horsing around and get to work
- follow the rules
- Im not creative
24How to stimulate innovation?
25Creating the Right Environment for Innovation
- Structural Variables
- Adopt an organic structure
- Make available plentiful resources
- Engage in frequent interunit communication
- Minimize extreme time pressures on creative
activities - Provide explicit support for creativity
26Creating the Right Environment for Innovation
(contd)
- Cultural Variables
- Accept ambiguity
- Tolerate the impractical
- Have low external controls
- Tolerate risk taking
- Tolerate conflict
- Focus on ends rather than means
- Develop an open-system focus
- Provide positive feedback
27Creating the Right Environment for Innovation
(contd)
- Human Resource Variables
- Actively promote training and development to keep
employees skills current. - Offer high job security to encourage risk taking.
- Encourage individual to be champions of change.
283M
Vision is the engine that drives our
enterprise.
--- Dr. William E. Coyne
Senior vice president, research and
development
29The 3M Model for Innovation
- One of the ten most admired corporations
Fortune annual poll of American CEOs. - The 3M model
- Continuous technological innovation
- Institutionalized individual entrepreneurship
- Market responsiveness
303M A Brief History
- Minnesota Mining and Manufacturing Company
- Established in 1902, producing abrasives and
adhesives products. - The McKnight era, 1929-1966
- Organizational design for continuous changes
- The Lou Lehr era, 1980-1985
- Reorganization and reorientation
- The Jake Jacobson era 1986-1991
- The orientation to competition in existing
markets
31Example Innovations in 3M
- Laptop
- How to balance the conflicting demands of longer
battery life with the size and weight
consideration - Power problem?
- No! it is screen brightness.
- Post-it
- Transparent
323M Way for Innovation Structural
- Decentralization
- Locus of decision at lower lab units. Divisional
autonomy response to customers need - Organizational design to facilitate lateral
communication - 3Ms Technical Forum
- The strategy of growth through new niches, rather
than competition in existing markets. - 30 of all sales MUST from products that had been
no longer than 4 years
333M Way for Innovation Cultural
- Innovation is the center of organizational
culture - Resistance to bureaucratic intervention is
encouraged - The 15 percent solution
- Contribution to innovation is greatly
respectedlegends, institutional memories,
ceremonies. - Carlton Society Honorary organization for
extraordinary contribution.
343M Way for Innovation HR
- Rewards for innovation
- Salary increase and promotion Golden Step Award
(team5 million) Technical Cycle of Excellence
- Dual track of promotion and recognition
- Genesis Grants for technicians
- Alpha Grants for administrative, marketing and
other non-technical areas - Tolerance of well-intentioned failures
- Regard failure as an opportunity to learn rather
than an occasion for punishment
35Final Presentation
36Further readings
- Harvard business review on innovation HD58.8
.H3694 2001 - Innovation Breakthrough thinking at 3M, DuPont,
GE, Pfizer, and Rubbermaid HD45 .I53726 1997 - HKUST Forum on the Future Development of Hong
Kong HC470.3 .H625 2002 sess 2 (media resource)
37Summary
- Understand the two views about organizational
change - Explain Lewins model
- Why people resist change
- Understand creativity and innovation
- Discuss how to stimulate innovation