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MIZAN-TEPI UNIVERSITYCOLLEGE OF BUSINESS AND
ECONOMICSDEPARTMENT OF MANAGEMENTMBA PROGRAM

• Innovation and Change ManagementCredit Hours
  2 ECTS 5

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Part-I Innovation Management

• Unit-1 Overview of Innovation Management
• Defining Innovation and Innovation Management
• Innovation, Invention, Creativity, Improvement
  and Entrepreneurship
• Characteristics of Innovation
• Components of Effective Innovation in an
  organization
• Drivers for Innovation
• Barriers to Innovation
• Steps for Innovation
• Management of Innovation
• Dos Do nots in innovation
• Conditions for Innovation
• Unit-2 Types and Models of Innovation
• Types of Innovation
• Categories of Innovation
• Models of Innovation
• The technology adoption life cycle

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Part-II Change Management

• Unit Three
• Overview of Change Management
• Unit Four
• Types of Organizational Change and Models for
  Managing Changes
• Unit Five
• Change Management Process and Challenges
• Unit Six
• Types of Change

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• Unit-1
• Overview of Innovation Management

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Defining Innovation and Innovation Management

• Innovation is the process by which the
  opportunities that have been identified through
  individual and organizational creativity are
  exploited.
• Innovation is the process and outcome of creating
  something new, which is also of value.
• Innovation is an essential element in enterprise
  by creating new business activity, in generating
  growth and ensuring survival for an existing
  business.

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Defining Innovation and Innovation Management

• Innovation management refers to planning for,
  organizing, leading and controlling all the
  resources and activities needed to introduce
  something new, which in practice means things
  like coming up with ideas, developing,
  prioritizing and implementing them, as well as
  putting them into practice.
• Innovation management involves the process of
  managing an organization's innovation procedure,
  starting at the initial stage of ideation, to its
  final stage of successful implementation.
• It encompasses the decisions, activities and
  practices of devising and implementing an
  innovation strategy.

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Invention, Innovation, Creativity, Improvement
and Entrepreneurship

• Creativity
• combining new ideas in unique ways or associating
  ideas in unusual ways.
• Invention
• the first occurrence of an idea for a new product
  or process.
• Innovation
• Putting new ideas into practice or using existing
  ideas in new ways.
• the first attempt to carry invention out into
  practice.
• Entreprenuership
• The process of bringing about change to achieve
  some benefit.
• A market-based perspective of innovation
• Improvement
• Eliminating or removing existing system faults.
• .

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Innovation, Invention, Creativity, Improvement
and Entrepreneurship

• Innovation involves the whole process from
  opportunity identification, ideation or invention
  to development, prototyping, production marketing
  and sales, while entrepreneurship only needs to
  involve commercialization.
• All innovation begins with creative ideas.
• Innovation is the successful implementation of
  creative ideas within an organization.
• Creativity by individuals and teams is a starting
  point for innovation.

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Innovation, Invention, Creativity, Improvement
and Entrepreneurship
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Characteristics of Innovation

• Innovative Organizations demonstrate the
  following characteristics.
• Divergent thinking
• Risk Taking
• Failure tolerance
• Agility Flexibility

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Characteristics of Innovation

• Divergent thinking
• Thinking that is different than the norm.
• Thought processes that dont move towards a
  single solution.
• Considering many options.
• Creative, open minded, process.

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Characteristics of Innovation

• Risk Taking
• Calculated, intentional risk taking.
• Willing to pilot alternatives before rolling
  out more broadly.
• Ideas for encouraging risk-taking behaviours.
• Introduce/educate
• Refrain
• Complete
• Communicate

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Characteristics of Innovation

• Failure Tolerance
• Learn from failure.
• Organizational Agility Flexibility
• Agility ability to adjust quickly as a result of
  planned changes.
• Flexibility ability to provide different
  outcomes with the same resources.

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Characteristics of Innovation

• Ways of Improving Agility Flexibility
• Develop strategies that reward agility
  flexibility
• Hire employees able/willing to change based on
  needs
• Anticipate stay abreast of market, environment
  and changing landscape
• Create teams that can innovate if urgently needed
  (critical market changes)
• Encourage share vision and empower teams
• Avoid demotivators and overconfidence

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Components of Effective Innovation in Organization

• Integrate the Expectation
• Not an initiative
• Doesnt compete with current process improvement
• Build a framework
• Employee Feedback
• Engagement/willingness to participate
• Creativity
• Teamwork
• Readiness

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Components of Effective Innovation in Organization

• Employee Engagement
• Employees at the front line know what the
  challenges areand often know how to solve the
  issues.
• Shared governance/employee council provides a
  strong framework for innovation.
• Education
• Consider educating staff on
• LEAN
• PDSA (Plan-Do-Study-Act)
• Design thinking

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Components of Effective Innovation in Organization

• Protected Time
• Providing opportunities to think and participate
  
• Shared governance meetings
• Improvement activities
• Education/Project time
• Rewards
• Innovators often comment that their greatest
  reward is having their idea acknowledged and
  acted upon.

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Components of Effective Innovation in Organization

• Design Thinking
• Human centred design
• Start with the question
• Whats the why?

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Components of Effective Innovation in Organization

• Design Thinking
• Desirability tests whether your innovation is
  solving the right customer problem.
• Are we solving for the right pain point?
• Feasibility tests whether your innovation
  strengthens your business
• Are we building on our core operational
  strengths?
• Viability tests your value chain for long-term
  sustainability
• Does our solution contribute to long-term growth?

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Components of Effective Innovation in Organization

• Leadership
• Provide opportunities for innovation, from
  incremental or disruptive type innovation.
• Identify mentors that can cultivate innovators
  among leaders and staff.
• Talk about it ask about it.
• Publically reward innovative ideas.
• Model innovation.

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Drivers for Innovation

• Financial pressures to reduce costs, increase
  efficiency, do more with less, etc
• Increased competition
• Shorter product life cycles
• Value migration
• Stricter regulation
• Industry and community needs for sustainable
  development
• Increased demand for accountability
• Demographic, social and maket changes
• Rising customer expectations regarding service
  and quality
• Changing economy
• Greater availability of potentially useful
  technologies coupled with a need to exceed the
  competition in these technologies

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Barriers to Innovation

• Players
• Employees
• Customers
• Managers
• Other stakeholders
• Policy
• Regulation
• Laws
• Policies
• Resources
• Finance
• Technology
• Experts
• Other inputs and physical resources

• Accountability
• Proactively communicate safety, effectiveness and
  value early.
• Obtain pre- and post measures for ideas and
  concept trials to demonstrate benefit

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Steps for Innovation

• The key steps of the innovation process are
• using the information available to signal the
  opportunities for the organization
• considering the alternative strategic options and
  choosing a way forward that will encourage and
  support innovation
• developing an implementation plan to efficiently
  manage the process.

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Steps for Innovation

• Searching for the trigger signals
• Deep reflection of the key information indicators
  is likely to be of greater benefit than
  superficial analysis of large quantities of
  information in producing the trigger signals that
  initiate the innovation process.
• It is worthwhile considering many ideas at an
  early stage rather than prematurely deciding on
  one or two ideas to take forward.

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Steps for Innovation

• Selecting from the strategic options
• By the very nature of innovation there are many
  different directions that the organization could
  take.
• In making decisions about which options to pursue
  it is necessary to determine a set of criteria
  against which the decisions should be made.

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Steps for Innovation

• Assessing the strategic options in innovation
• In developing a strategy for innovation it is
  essential that it fits with the corporate
  strategy of the organization and some of the key
  issues to ensure the acceptability, feasibility
  or suitability of the innovation strategy.
• The organization will decide which of these
  elements the innovation must fit.

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Steps for Innovation

• Implementation
• The implementation stage of the innovation
  strategy is concerned with managing and
  supporting the innovation process.

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Management of Innovation

• Solve the correct problem correctly be
  effective and efficient
• Manage innovation as a project
• Analyze risks
• Use models, scenarios, computer simulation
• Study examples of succesful and unsuccesful
  innovation projects

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Dos Dont dos in innovation

• WHAT TO DO
• Start with analysis and study of opportunities.
• Go among people, ask questions, listen
• Effective innovations are surprisingly simple.
• They must be focused on specific needs and on
  specific final products.
• Effective innovation start on a small scale.
• A successful innovation always tries to win a
  leading position, otherwise you create
  opportunities for your competitors.

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Dos Dont dos in innovation

• WHAT TO AVOID
• Dont try to be too clever.
• All that is too sophisticated will almost
  certainly go wrong.
• Dont try to do too many things at once.
• Focus on the core of the problem.
• Dont try to make innovations for the future but
  for today.
• An innovation can have a long-term impact but
  there must be an immediate need for it.

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Conditions for Innovation

• Innovation means work hard, concentrated and
  thorough work.
• If these qualities are lacking then there is no
  use for the big talent, cleverness or knowledge.
• Successful innovations must build on your strong
  points.
• The innovation must be important to the
  innovator.
• Innovation must focus on a market, must be
  controlled by the market (market-pull).

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• Unit-2
• Types and Models of Innovation

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Categories of Innovation

• Business Model Innovation
• the ability to rethink your current business to
  find new revenue streams and maintain competitive
  advantage.
• It can be done either by improving an existing
  business model or by looking for new ways to
  provide value.
• Technology innovation
• Generating new ideas based on technology,
  capability or knowledge to produce a new solution
  to a real or perceived need and to develop this
  solution into viable entity.
• Marketing innovation
• finding new markets and creating new value
  propositions that others arent able to (or do
  not want to) provide.
• This can be done by launching technology, product
  or business model in new unconventional places or
  by promoting your existing offering in a way it
  hasnt been promoted before.

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Types of Innovation

• Disruptive Vs. Sustaining innovation
• Disruptive innovation refers to a concept,
  product or service that creates a new value
  network either by disrupting an existing market
  or creating a completely new market.
• Sustaining innovation refers to the type of
  innovations that exist in the current market and
  instead of creating new value networks, it rather
  improves and grows the existing ones.

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Types of Innovation

• Radical Vs. Incremental innovation
• Radical innovation happens when a new technology
  completely disrupts existing business or economy
  and creates a new business model.
• Incremental innovation refers to a series of
  small, gradually built improvements to existing
  products, processes or methods to maintain
  competitive position over time.
• The majority of innovations are incremental,
  because these types of innovations are often the
  easiest and most cost-efficient to implement.

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Types of Innovation

• Both sustaining and disruptive innovation can be
  either radical or incremental.

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Types of Innovation

• Both sustaining and disruptive innovation can be
  either radical or incremental.
• Radically disruptive  Innovation that harnesses
  new technology and creates a new business model.
• Has no clear competitors.
• Radically sustaining  Improvement on a product
  or process in an existing market that provides
  new value for the customer.
• Incrementally disruptive  An incremental
  improvement in technology that leads to a
  dramatic disruption.
• Incrementally sustaining  Small and cumulative
  changes in an existing product, technology or
  service.

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Types of Innovation

• Architectural vs. Modular innovation
• Architectural innovation is described as the
  reconfiguration of existing product technologies.
• The main point in architectural innovation is
  that while the core components of the product
  remain the same, the relationship between these
  components changes.
• It entails the overall design, system or the way
  components interact.
• Modular innovation (or component innovation) is
  the exact opposite of architectural innovation.
• In modular innovations, one or more components of
  a product is changed while the overall design
  stays the same.

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Models of Innovation

• Innovation Matrix

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Models of Innovation
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The Technology Adoption Life Cycle

• Diffusion of innovations
• The diffusion of innovations is defined as the
  process by which an innovation is communicated
  through certain channels over time among the
  members of a social system.
• These channels can be any channels through which
  information is transmitted, all the way
  from interpersonal communication channels to mass
  media.
• The diffusion theory attempts to
  identify the aspects that influence the rate of
  adoption of an innovation.
• The main aspects that affect the distribution of
  a new idea or innovation are time, communication
  and social systems, also referred to as adopter
  categories.
• Adopter categories are individuals, organizations
  or larger clusters within a social system on the
  basis of their innovativeness.

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The Technology Adoption Life Cycle

• The adopter categories are
• Innovators  People who are enthusiastic about
  new technology and have a high risk tolerance.
  They are keen to be the first ones to try out a
  new technology and allow to adopt innovation,
  even if it might eventually fail.
• Early adopters  More discreet in their adoption
  choices compared to innovators, but appreciative
  to potential products that may give them or their
  organization a competitive advantage.
• Early majority  People who adopt an innovation
  after a significantly longer time compared to
  innovators or even early adopters. Makes up the
  majority of the market.
• Late majority  Adopt an innovation after the
  average participant, extremely cautious and
  willing to see proof of results and usefulness
  before buying.
• Laggards  The last ones to adopt an innovation.
• Extremely skeptic and will buy a new technology
  only if they really must.

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The Technology Adoption Life Cycle
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The Technology Adoption Life Cycle

• In addition to adopter categories, the following
  factors have been identified to affect the
  adoption rate of the innovation in the market
• Compatibility  is the innovation perceived to be
  consistent with the needs of potential adopters?
• Relative advantage  is the innovation perceived
  to outperform the competition?
• Complexity  is the innovation easy to understand
  or does the adoption process require new
  knowledge and skills?
• Trialability  can it be experimented before
  purchasing?
• Observability  are the benefits visible for
  others?

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Part-II Change Management

• Unit Three
• Overview of Change Management
• Unit Four
• Types of Organizational Change and Models for
  Managing Changes
• Unit Five
• Change Management Process and Challenges
• Unit Six
• Types of Change

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• Unit Three
• Overview of Change Management

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Defining Change and Change Management

• The term Change refers to any event or program
  the enterprise undertakes that causes major
  disruption to daily operations.
• e.g. A new ERP installation or digital
  transformation.
• An alteration of an organizations environment,
  structure, technology, or people
• A constant force
• An organizational reality
• An opportunity or a threat

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Defining Change and Change Management

• Change management- is a collective term for all
  approaches to prepare, support, and
  help individuals, teams, and organizations in
  making organizational change. 
• It is a systematic approach to dealing with the
  transition or transformation of an organization's
  goals, processes or technologies.
• The purpose of change management is to implement
  strategies for effecting change, controlling
  change and helping people to adapt to change.
• Such strategies include having a structured
  procedure for requesting a change, as well as
  mechanisms for responding to requests and
  following them up.

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Defining Change and Change Management

• Organizational change management (OCM) considers
  the full organization and what needs to
  change, while change management may be used
  solely to refer to how people and teams are
  affected by such organizational transition.
• It deals with many different disciplines, from
  behavioral and social sciences to information
  technology and business solutions.

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Change Vs. Reform

• Reform is amendment of what is defective,
  vicious, corrupt, or depraved reformation. 
• To put into a new and improved form or condition
• Change is the process of becoming different.
• To become something different.

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Reform Vs. Revolution

• The key difference between the two processes lies
  in the way in which goals are achieved.
• Reforms imply that changes are made to the
  existing state.
• Revolution entails the complete disruption and
  the radical change of the status quo.

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Reasons for Change

• Globalization and constant innovation of
  technology result in a constantly evolving
  business environment.
• Phenomena such as social media and mobile
  adaptability have revolutionized business and the
  effect of this is an ever-increasing need for
  change, and therefore change management.

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Reasons for Change

• The growth in technology also has a secondary
  effect of increasing the availability and
  therefore accountability of knowledge.
• Easily accessible information has resulted in
  unprecedented scrutiny from stockholders and the
  media and pressure on management.
• With the business environment experiencing so
  much change, organizations must then learn to
  become comfortable with change as well.

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Reasons for Change

• Why Organizations Change?
• Organizations change for a number of different
  reasons, so they can either react to these
  reasons or be ahead of them. These reasons
  include
• Crisis
• Performance Gaps
• New Technology
• Identification of Opportunities
• Reaction to Internal External Pressure
• Mergers Acquisitions
• Change for the Sake of Change
• Sounds Good
• Planned Abandonment

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Internal and External Forces of Change
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Components of Change
Components of Change
Structure
People
Technology
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Components of Change

• There are three main components of change
  structure, technology, and people.
• Changes in structure consist of altering
  relationships, redesigning jobs, coordinating
  mechanisms, and modifying spans of control.
• Changes in technology consist of revising work
  processes, revamping work methods, and acquiring
  new equipment.
• Changes in people consist of altering
  expectations, attitudes, perceptions, and
  behavior.

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Key Factors Involved in Change

• Change agent
• A change agent is an individual or team of people
  whose main responsibility is to initiate,
  suggest, and even force change efforts within an
  organization.
• The Role of Change Agent
• Identifies major problem areas
• Identifies the opportunities for change
• Builds readiness and commitment
• Builds a renewing system via creating a climate
  for change, and
• Establishes internal capacity to sustain the
  change effort, evaluate and review it

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Key Factors Involved in Change

• Change agent
• Qualities of Change Agent
• Homophily The degree of closeness and similarity
  between the change agent and the client.
• The closer the relationship the easier and more
  successful the change will be.
• Empathy Involves understanding of feelings,
  emotions and thoughts of other people.
• Linkage Refers to the degree of collaboration
  between the change agent and the client.
• The tighter the linkage, the more likely is the
  success.
• Proximity The client and the change agent should
  have easy access to each other.
• Structuring Involves proper and clear planning
  of all activities that are related to change.

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Key Factors Involved in Change

• Change agent
• Qualities of Change Agent
• 6.Capacity organizations capacity to provide
  the resources that are needed for a successful
  implementation.
• 7. Openness The degree of openness between the
  change agent and the client affect the out-come
  of the program.
• 8. Reward The greater the potential for rewards,
  the more determined is the effort in making the
  change.
• 9. Energy Refers to the effort put into the
  change process. involves both the physical and
  the psychological energy.
• 10. Synergy This implies people, resources,
  energies, and activities result in synergy.

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Key Factors Involved in Change

• Change agent
• Change Agent Competence Areas
• Technical Competence With respect to the
  substance of the changes to be implemented.
• Planning and monitoring techniques Monitoring
  progress should enable plans to be rescheduled
  and updated as appropriate.
• Process Competence This includes a range of
  communication, team building, influencing and
  negotiating skills.

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Key Factors Involved in Change

• Change agent
• Types of Change Agents
• Internal Change Agents managers and staff
  specialists
• Outside consultants

Staff Specialists
Managers
Outside Consultants
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Key Factors Involved in Change
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Key Factors Involved in Change
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Key Factors Involved in Change
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Key Factors Involved in Change
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Key Factors Involved in Change
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Key Factors Involved in Change

• 2. Performance Gaps
• The difference between the status quo and the
  desired new standard of performance.
• Situations where outcomes are less than those
  stated in the strategic objectives.

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Importance and Effects of Change Management

• Change management increases the success of
  critical projects and initiatives and improves a
  companys ability to adapt quickly.
• Business change is constant and inevitable, and
  when poorly managed has the potential to cause
  organizational stress as well as unnecessary, and
  costly re-work.
• Change management helps employees to understand
  their new roles and build a more process-driven
  culture.
• Change management encourages future company
  growth by allowing it to remain dynamic in the
  marketplace.

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• Unit Four
• Types of Organizational Change and Models for
  Managing Changes

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Types of Organizational Change

• Change management can be used to manage many
  types of organizational change. The three most
  common types are
• Developmental change - Any organizational change
  that improves on previously established processes
  and procedures.
• Transitional change - Change that moves an
  organization away from its current state to a new
  state in order to solve a problem, such as
  mergers and acquisitions and automation.
• Transformational change - Change that radically
  and fundamentally alters the culture and
  operation of an organization.
• In transformational change, the end result may
  not be known.
• For example, a company may pursue entirely
  different products or markets.

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Models for Managing Changes

• The popular models include
• ADKAR The ADKAR model, created by Prosci founder
  Jeff Hiatt, consists of five sequential steps
• Awareness of the need for change
• Desire to participate in and support the change
• Knowledge about how to change
• Ability to implement change and behaviors and
• Reinforcement to sustain the change.

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Models for Managing Changes

• The popular models include
• ADKAR

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Models for Managing Changes

• The popular models include
• 2. Bridges' Transition Model Change consultant
  William Bridges' model focuses on how people
  adjust to change.
• The model features three stages a stage
  for letting go, a stage of uncertainty and
  confusion and a stage for acceptance.
• Bridges' model is sometimes compared to the
  Kübler-Ross five stages of grief (denial, anger,
  bargaining, depression and acceptance).

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Models for Managing Changes

• The popular models include
• 2. Bridges' Transition Model

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Models for Managing Changes

• The popular models include
• 3. Kübler-Ross Grief Cycle Model

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Models for Managing Changes
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Models for Managing Changes

• The popular models include
• 4. Kotter's 8-Step Process for Leading Change
  Harvard University professor John Kotter's model
  has eight steps
• Increasing the urgency for change
• Creating a powerful coalition for change
• Creating a vision for change, communicating the
  vision
• Enlist a Volunteer Army
• Removing obstacles
• Creating short-term wins
• Building on them and
• Anchoring the change in corporate culture.

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Models for Managing Changes

• The popular models include
• 4. Kotter's 8-Step Process for Leading Change

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Models for Managing Changes

• The popular models include
• 5. Lewin's Change Management Model
• Psychologist Kurt Lewin created a three-step
  framework that is also referred to as the
• Unfreeze
• Change
• Freeze (or Refreeze) model.

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Models for Managing Changes

• The popular models include
• 5. Lewin's Change Management Model

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Models for Managing Changes

• The popular models include
• 6. McKinsey 7S
• Designed by business consultants Robert H.
  Waterman Jr. and Tom Peters.
• The seven factors that affect change
• Shared Values guiding principles that make the
  organization what it is.
• Strategy organizational goals and plan, use of
  resources
• Structure the organization chart and how roles,
  responsibilities and accountabilities are
  distributed in furtherance of the strategy
• Systems processes, IT systems, HR systems,
  knowledge management systems.
• Style leadership style and culture.
• Staff important categories of people within
  the organization, the mix, the diversity,
  retention, the development and the maximizing of
  their potential
• Skill distinctive capabilities, knowledge and
  experience of key people

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Models for Managing Changes

• The popular models include
• 6. McKinsey 7S

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• Unit Five
• Change Management Process and Challenges

85
Techniques for Managing Changes

• Change is an alteration of an organizations
  environment, structure, technology, or people.
• As change is an organizational reality, handling
  it is an integral part of every managers job.
• Changing structure means altering authority
  relationships, coordination mechanisms,
  centralization of authority, job design, or
  similar structural variables.
• Changing technology means modifying methods and
  equipment used to complete work processes.
• Changing people involves adjusting employee
  attitudes, expectations, perceptions, or
  behaviors.

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Techniques for Managing Changes
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Change Management Process

• Organization is constantly experiencing change.
• Whether caused by new technology implementations,
  process updates, compliance initiatives,
  reorganization, or customer service improvements,
  change is constant and necessary for growth and
  profitability.
• A consistent change management process aids in
  minimizing the impact it has on your organization
  and staff.

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Change Management Process
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Change Management Challenges

• Resource management 
• Managing the physical, financial, human,
  material, informational and intangible
  assets/resources that contribute to an
  organizations strategic plan becomes
  increasingly difficult when implementing change.
• Resistance 
• The executives and employees who are most
  affected by a change may resist it.
• Since change may result in unwanted extra work,
  ongoing resistance is common.
• Transparency, training, planning and patience can
  help handle resistance and improve overall morale.

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Change Management Challenges

• Communication
• Companies often fail to consistently communicate
  change initiatives or include its employees in
  the process.
• Change-related communication requires an adequate
  number of messages, the involvement of enough
  stakeholders to get the message out and multiple
  communication channels.
• New technology 
• The application of new technologies can disrupt
  an employees entire workflow.
• Failure to plan ahead will stall change.
• Companies may avoid the delay by creating a
  network of early learners who can champion the
  new technology.

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Change Management Challenges

• Multiple points of view
• In change management, success factors differ for
  everyone based on their role in the organization.
  
• This creates a challenge in terms of managing
  multiple priorities simultaneously.
• Scheduling issues
• Deciding whether a change program will be long or
  short-term, and clearly defining milestone
  deadlines is complicated.
• Some organizations believe that shorter change
  programs are most effective.
• Others prefer a more gradual approach, as it may
  reduce resistance and errors.

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Change Management Difficulties

• It takes a great deal of time to change attitudes
  and behaviors.
• OCM managers have a much harder time measuring
  progress gauging support can be tricky.
• Just when it appears that a key individual
  supports the change, the person raises another
  objection and returns to old behaviors.
• Executives, often assume that everyone impacted
  will find the business case so compelling they
  will automatically accept the new way of
  operating.
• But most people resist change or are
  unpredictable.
• This creates several difficulties for the OCM
  team

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Change Management Difficulties

• This creates several difficulties for the OCM
  team
• Change management is not deterministic 
• Unlike computer programs, people can be
  unpredictable and illogical.
• OCM activities that are effective with one group
  may be ineffective with another.
• Messages may resonate with some people but not
  with others.
• Change management is a contact sport
• The OCM team needs to interact one-on-one with
  individuals who will need to change.
• Emails, videos, and other mass communication can
  reinforce a message, but these dont make people
  feel the enterprise cares about their
  difficulties.
• Change is personal sometimes people whose jobs
  have been transformed need someone else to listen
  to their frustrations before they will accept the
  new reality.

94
Change Management Difficulties

• This creates several difficulties for the OCM
  team
• Midlevel and frontline staff engagement
• Midlevel and frontline staff can make or break a
  major program.
• Since they understand the operational details of
  the current processes, they can anticipate
  potential problems and likely customer reactions.
  
• Individuals who are not sensitive to the
  disruption that major change can create often
  believe it is more efficient to involve fewer
  people early in the process.
• While involving more people in the change process
  creates additional work for the OCM team, it also
  builds commitment.
• Midlevel and frontline staff who see their
  suggestions accepted are more likely to support
  the final result.

95
Change Management Difficulties

• This creates several difficulties for the OCM
  team
• Cultural differences can make OCM difficult
• Cultural norms are different around the globe.
• The OCM effort needs to be aware of local customs
  even with a global system intended to standardize
  enterprise operations.
• Care needs to be taken to be sensitive to these
  and other cultural norms.
• Change Management May Be an Afterthought 
• If the OCM effort is not started concurrently
  with the rest of the program, it may only be
  started when the program team experiences
  resistance from end users.
• Even enterprises that assert that OCM is critical
  sometime reduce or eliminate the OCM budget if
  the overall program gets too expensive.

96
Change Management Difficulties

• This creates several difficulties for the OCM
  team
• Change Management Can Be Started too Early 
• The OCM effort needs to be tightly coupled to the
  rest of the change program.
• This is particularly difficult with major IT
  programs when the OCM efforts begin before new
  system details have been finalized.
• In the absence of tangible information about the
  new system, the OCM team either sounds vague or
  describes what they hope the new system will do.
• When the new system fails to materialize quickly
  or has less functionality than anticipated,
  supporters often become disillusioned.

97
Change Management Difficulties

• This creates several difficulties for the OCM
  team
• OCM and the Change Program may be Disconnected
• The rational and emotional cases for change need
  to be integrated tightly.
• Frequently, executives communicate a rational,
  logical case for change that lacks emotional
  appeal.
• People respond to calls to action that make them
  feel they are part of something that is more
  important than any single person and are
  energized by visions that capture their hearts as
  well as their minds.

98
Requirements for Change Management Success

• Organization change management programs require
  several things to be successful
• The right executive sponsor
• Sponsorship is critical. The OCM sponsor is
  responsible for developing the case for change
  and obtaining the necessary OCM resources.
• The sponsor needs the support of the CEO to make
  it clear that the effort is important.
• The sponsor must understand the case for change
  clearly enough have a detailed discussion about
  the challenges that created the need for a
  different way of operating.
• He/she should be confident enough to confront
  skeptics and close enough to the details to
  justify the approach selected and the reasons the
  alternatives were rejected.

99
Requirements for Change Management Success

• Organization change management programs require
  several things to be successful
• The right executive sponsor
• The sponsor needs to understand the impact on the
  staff.
• Good sponsors are concerned about the people who
  will be affected by the change.
• These sponsors communicate honestly while
  treating everyone fairly and respectfully.
• Rather than merely relating the facts, they take
  the time to listen to people and to empathize
  with the individuals who dislike the new way of
  operating.
• If people are to be terminated or reassigned,
  sponsors should know when it will happen and how
  everyone will be treated.
• They explain why the change is necessary, and do
  what they can to smooth the transition for
  individuals whose jobs are transformed.
• The best sponsors help everyone losing a job find
  the next opportunity.

100
Requirements for Change Management Success

• Organization change management programs require
  several things to be successful
• Cultural willingness to adapt and change
• All organizations resist change to some degree,
  but ones that follow the dictum if it isn't
  broke dont fix it often need a major wake-up
  call to behave differently.
• Skilled change management teams embrace the
  organizations emotional energy.
• They use company stories, language, and behavior
  to emphasize those parts of the current culture
  that are aligned with the planned change.
• These teams celebrate behaviors they wish to
  encourage by publicly recognizing individuals
  exhibiting these behaviors.
• Change management teams use every opportunity to
  reinforce the way the change helps the enterprise.

101
Requirements for Change Management Success

• Organization change management programs require
  several things to be successful
• Individual willingness to change 
• Individuals must be willing to examine new
  information and adopt new behaviors and
  approaches.
• Since most people prefer the status quo, this can
  be difficult.
• Typically, most people only accept changes that
  make sense and improve their job content or their
  work environment.

102
Requirements for Change Management Success

• Organization change management programs require
  several things to be successful
• Rewards and consequences 
• Major changes need to be reinforced by rewards
  and consequences.
• Individual performance plans with specific,
  measurable results need to reinforce the desired
  future state.
• Individuals who meet their objectives need to be
  rewarded appropriately and those that do not need
  to face consequences.
• When the compensation plan does not reward them
  sufficiently for the additional firm revenue to
  offset their decreased client revenue, they are
  very unhappy.
• The firms leadership team has to adjust the
  compensation plan quickly in order to prevent the
  partners from leaving.

103
Resistance to Change

• Managers make changes to increase the
  effectiveness of their organizations.
• Change can be a threat to managers and
  non-managers alike.
• So, organizations resist change, even when it is
  beneficial.
• People resist change for three reasons.
• change substitutes ambiguity and uncertainty for
  the known.
• Even if workers do not like the current system of
  management, at least they know the ropes.
• they fear losing something they already possess.
• The greater their investment in the status quo,
  the more they resist change because they fear
  losing their position, money, friendships, or
  personal conveniences.
• they do not believe in the organizations best
  interests.

104
Resistance to Change
Uncertainty and Ambiguity Fear of Personal
Loss Lack of Faith in Change
105
Techniques for Reducing Resistance

• Six tactics can be used by change agents to deal
  with resistance.
• Education and communication can help employees to
  understand why change is necessary.
• Participation encourages individuals to support
  the changes that they decided upon.
• Facilitation and support can be used to reduce
  resistance.
• Negotiation means exchanging something of value
  for lessening resistance.
• Manipulation involves covert influence attempts
  cooptation uses participation and manipulation.
• Coercion is the application of direct threats or
  force on the resisters.

106
Techniques for Reducing Resistance
Education and Communication
Participation
Negotiation
Facilitation and Support
Coercion
Manipulation and Cooptation
107
Factors of Successful Change Management

• Successful change management is more likely to
  occur if the following are included
• Define measurable stakeholder aims and create a
  business case for their achievement (which should
  be continuously updated)
• Monitor assumptions, risks, dependencies, costs,
  return on investment, dis-benefits and cultural
  issues
• Effective communication that informs various
  stakeholders of the reasons for the change
  (why?), the benefits of successful implementation
  (what is in it for us, and you) as well as the
  details of the change (when? where? who is
  involved? how much will it cost? etc.)

108
Factors of Successful Change Management

• Successful change management is more likely to
  occur if the following are included
• Devise an effective education, training and/or
  skills upgrading scheme for the organization
• Counter resistance from the employees of
  companies and align them to overall strategic
  direction of the organization
• Provide personal counseling (if required) to
  alleviate any change-related fears
• Monitoring implementation and fine-tuning as and
  when required

109

• Unit Six
• Types of Change

110
Content of the Chapter

• Planned Vs. Unplanned Change
• Revolutionary Vs. Evolutionary Change
• Other kinds of Change

111
Planned Vs. Unplanned Change

• Planned change 
• A change that occurs when managers or employees
  make a conscious effort to change in response to
  a specific problem.
• Unplanned change 
• Occurs randomly and spontaneously without any
  specific intention on the part of managers or
  employees of addressing a problem.

112
Revolutionary Vs. Evolutionary Change

• Evolutionary Change
• Gradual, incremental, and narrowly focused.
• Total quality management, Kaizen and
  Organizational Development are among the known
  evolutionary changes.
• Revolutionary Change
• A rapid, dramatic, and broadly focused change.
• Reengineering, restructuring, and quantum
  innovation are the three important instruments
  for revolutionary change.

113
Other Kinds of Change

• Operational Change
• Introducing changes in the existing operations
  for realizing the intended goals.
• Strategic Change
• Implemented at the organizational level, which
  may affect the various components of an
  organization and also the organizational
  strategy.
• e.g. A change in the management style

114
TQM as Evolutionary Change

• The following steps are necessary for mangers to
  implement a successful TQM program.
• Build organizational commitment to quality
• Focus on customers
• Find ways to measure quality
• Set goals and create incentives
• Solicit input from employees
• Identify defects and trace them to their sources
• Design for ease of production
• Break down barriers between functions

115
Kaizen as Evolutionary Change

• Kai Change Zen Good
• Kaizen Good Change, Change for the Better,
  Continuous Improvement
• Small, incremental changes break apart and put
  back together better
• Focus on small, quick changes for long-term
  success 
• Rapid improvement in a particular work cell, work
  station, small process, factory location, office
  area, etc.

116
Kaizen as Evolutionary Change

• Kaizen Targets 
• Eliminate waste (non value added activities)
• Increase productivity / output
• Reduce inventory (less material and labor)
• Reduce cycle time (less time to produce specific
  part)
• Reduce space (work cell, office area)
• Improve On-Time Delivery (OTD)
• Improve quality of product and process
• Improve housekeeping, 5S and visual management
• Reduce downtime (setup time, maintenance)
• Reduce transport time and distance
• Standardize the process (less variation)
• Reduce operating costs

117
Kaizen as Evolutionary Change

• Waste 
• Non-essential steps
• 8 Wastes 
• Overproduction 
• Inventory 
• Motion 
• Waiting 
• Transportation 
• Over processing 
• Rework/Defects
• Underutilized People 

118
Kaizen as Evolutionary Change

• 5S 
• Workplace organization standard focused on
  efficiency, effectiveness, and safety
• Sort (Seiri)
• Straighten, Set in order (Seiton)
• Shine, Sweep (Seiso)
• Standardize (Seiketsu)
• Sustain (Shitsuke)

119
Kaizen as Evolutionary Change

• 5S Before

Office (Before)
Factory (Before)
120
Kaizen as Evolutionary Change

• 5S - After

Office (After)
Factory (After)
121
OD as Evolutionary Change

• Organization Development (OD) is a planned
  approach to improve organizational effectiveness.
  
• A normal OD process can be phased as
• Problem Identification
• Data Collection
• Diagnosis
• Planning and Implementation
• Evaluation and Feedback

122
Reengineering as Revolutionary Change

• Business process reengineering (BPR) is the
  fundamental rethinking and radical redesign of
  business process to achieve dramatic improvements
  in critical, contemporary measures of
  performance, such as cost, quality, service, and
  speed.
• Fundamental Rethinking ask basic questions about
  the company and how they operate.
• Why do we do what we do?
• Why do we do it the way we do it?
• Radical redesign reengineering is about throwing
  the already existing system away and starting
  with a clean slate and redesign how you do your
  work.
• Dramatic improvement it is about achieving
  quantum performance growth.
• Business process process is the core of the
  reengineering. Process is an organized group of
  related activities that together create value to
  customers. It is about how work is done.

123
Reengineering as Revolutionary Change

• What is not reengineering?
• Reengineering is not downsizing
• Reengineering is not restructuring
• Reengineering is not automation
• Reengineering is not outsourcing

124
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase One Preparation for Change/Planning Stages
• Assessing the preconditions for change
• Leadership commitment
• Identifying the business process
• Since organization cannot reengineer all of its
  process all together at a time, the followings
  are the major criterion of choosing this process
• Dysfunctional-processes that are broken and in
  the deepest trouble
• Important processes that are the greatest impact
  on the companys customer and highest link to its
  mission and
• Feasibility are most susceptible to successful
  redesign at the moment.
• Forming organizational structure

125
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase One Preparation For Change/Planning
  Stages/
• Design team
• Team leader or facilitator
• Subject matter experts
• Steering team
• Process owner
• Preparing TOR (terms of reference)
• The TOR should explicitly specify
• The objective of the reengineering project,
• Methodology of reengineering, and
• Have concrete action plan indicating what to do,
  when, how and by whom.

126
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase Two Understanding the Current Business
  Process (As-Is)
• Mapping the current process-gives a picture of
  how work flows through the organization.
• It is very helpful in viewing the existing
  process.
• Produces an accurate picture of the process and
  its current performance i.e. baseline of the
  current performance.
• Shows how the end-to-end process actually
  works.
• Mapping the current process helps to identify
  steps, costs, and cycle time look for
  bottlenecks and identify current assumptions.

127
Reengineering as Revolutionary Change

• As-is business process for purchasing a book from
  a physical bookstore

128
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase Three Redesigning the Business Process
• Establish the desired outcomes there are several
  steps involved to start at the end with the
  desired outcomes. These are
• Identify the key customers and/or stakeholders
  the design team begins by brainstorming a list of
  external and internal customers/stakeholders.
• Choose a way of learning about customers/stakehold
  ers needs and expectations.
• Interview or survey customers/stakeholders to
  determine desired outcomes.
• Compare and analyzed data from customers/stakehold
  ers, synthesizing desired outcomes. Compare the
  customers/stakeholders requirement with the
  current performance or benchmarked performance.
• Decide whether you are ready to move on to the
  next design step.

129
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase Three Redesigning the Business Process
• Setting stretched objectives stretch objectives
  reach far beyond what process currently produces.
  Stretched objectives are another name for
  performance measures.
• Here are the sub-steps involved in creating
  stretched objectives
• Review customers/stakeholders needs and
  expectation.
• Identify the needs and expectations that form the
  foundations of stretch objectives.
• Brainstorm possible stretched objectives they
  can come from
• benchmarking the same processes performed by
  leading organizations.
• customer and stakeholders requests and
  preferences.
• the organizations its own best performance of
  the process.
• Decide whether you are ready to move on to the
  next design step

130
Reengineering as Revolutionary Change

• Stages to Reengineering
• Phase Three Redesigning the Business Process
• Breaking old assumptions