Innovation and Change BA 152 Pressures for Innovation

Innovation and Change BA 152

Pressures for Innovation and Change Competition Global Markets ORGANIZATIONAL CHANGE Faster Cycle Times Demographics Technology New Work Structures

Possible Targets for Change Strategy Technology Processes Environment Products/ Services ! T I F People Goals Culture Structures Systems

One Model of Change Step 1 Determine the need for change - Current Situation - Desired Situation - Is the gap big enough to make a difference?

One Model of Change: Step 2 Overcome obstacles to change - Organizational - Functional - Group - Individual

One Model of Change: Step 3 Determine the strategy for change - Revolutionary / Top Down - Evolutionary / Bottom Up

One Model of Change: Step 4 Solidify or Institutionalize the Change

Overcoming Obstacles to Change: Force Field Analysis STATUS QUO DRIVING FORCES RESISTING FORCES Competition Focus on costs New Technologies Lack of benefits Changes in Strategy Lack of coordination New opportunities Uncertainty avoidance FELT NEED FOR CHANGE Fear of loss

To Overcome Obstacles What can you do? More TIME Less • Education • Participation • Facilitation • Negotiation • Manipulation • Coercion More COMMITMENT Less

Making the Change How Can You Do It? Factors Donald Trump Speed Fast Slow Employee Involvement Little/None Much Resistance Destroy/Ignore Win Over Power Have Don’t have Careful Planning Evolving/ Adapting Execution Mr. Rogers

Implementation Options Goal or purpose of the change Approach to the change Breadth of the change Pace of the change Amount of resources needed Type of change Order of implementation steps

Implementation Options

The 7 S’s of Implementing Change STYLE Top-Down-Bottom-Up SCOPE Isolated-Org. Wide ! T I F SUBSTANCE Soft--Hard STRATEGIC INTENT Precise--Broad SPEED Slow--Fast SEQUENCE Hard-Soft-Hard SCALE Small--Large

To Insure It Works What should be done? • Get top administration support • Involve those most affected by the change, if. . . • Minimize surprises, unless. . . • Start small and build, unless. . . • Make sure the pieces “fit” • Publicize successes • Reinforce the new • Evaluate results, modify as needed • Be prepared to change, again.

Remember. . . b If change is the only constant in organizations, then. . . b Organizations must be constantly ready to change.

Sustaining versus Disruptive Innovation b What do successful companies do well? • They become good at responding to evolutionary changes in their markets. • They typically do this with sustaining technologies.

Sustaining versus Disruptive Innovation b Sustaining Technologies • Those technological changes that improve the performance of established products along dimensions of performance that mainstream customers in major markets have historically valued. b Examples? • Automobiles • Disk drives • Department stores

Product Performance Technological change and the market to ies e u olog d ss chn e r e og g t r P nin i sta Performance demanded at the high end of the market su Performance demanded at the low end of the market Time

The Innovator’s Dilemma b Disruptive Technologies • Those technological changes that initially underperform established products in mainstream markets. However, the resulting products are often cheaper, simpler, smaller, and, frequently more convenient to use than existing products. b Examples? • Disk drives • Discount department stores • Automobiles?

Product Performance Technological change and the market to ies e u olog d s n es ech r og g t r P nin i a t s Performance demanded at the high end of the market su Disruptive technological innovation to ies e u log d s hno s e gr tec o Pr tive up r s di Time Performance demanded at the low end of the market

The Innovator’s Dilemma b What keeps organizations from recognizing and surviving disruptive innovations? • Companies depend on current customers and current investors for resources. • Small markets (those most likely served by disruptive technologies) don’t solve the growth needs of large companies. • Markets that don’t exist (like those most likely served by disruptive technologies) can’t be analyzed. • Technology supply may not equal market demand.

The Innovator’s Dilemma b What can organizations do to prosper from potential disruptive Innovations: • Align the disruptive technology with the right set of (probably new) customers. • Match the size of the (new) organization with the size of the market. • Recognize failure as a step toward success. • Develop new markets that value the disruptive technology.

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