Managing Change and Innovation

CHAPTER 11
 Learning Objectives

 Define organizational change and explain the forces

driving innovation and change in today’s organizations.
 Identify three innovation strategies managers implement
for changing products and technologies.
 Explain the value of creativity, idea incubators, horizontal
linkages, open innovation, idea champions, and new-
venture teams for innovation.
 Discuss why changes in people and culture are critical to
any change process.
 Define organizational development (OD) and large group
interventions.

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 Learning Objectives (contd.)

 Explain the OD stages of unfreezing, changing,

and refreezing.
 Describe the sequence of change activities that
must be performed in order for change to be
successful.
 Identify sources of resistance to change.
 Explain force-field analysis and other
implementation tactics that can be used to
overcome resistance.

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 Turbulent Times
The Changing Work Place
 Today’s organizations need to continuously
adapt to new situations if they are to survive
and prosper

 One of the most dramatic elements is the shift

to a technology- driven workplace

 Ideas, information, and relationships are

becoming critically important

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 Organizational Change

 The adoption of a new idea of behavior

by an organization

 A product change is a change in the

organization’s product or service
outputs.
 A technology change is a change in the
organization’s production process – how
the organization does its work.

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 Coordination Model for Innovation
Exhibit 11.3

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 Idea Champion
Change does not occur by itself

A person who sees the need for and

champions productive change within
the organization

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 Four Roles in Organizational Change

Exhibit 11.4

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 New Venture Teams

 New Venture Team = Unit separate

from the mainstream of the organization
that is responsible for developing and
initiating innovations
 Skunkworks = separate small, informal,
highly autonomous, and often secretive
group that focuses on breakthrough
ideas for the business

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 New Venture Fund

 Fund providing resources from which

individuals and groups can draw to
develop new ideas, products, or
businesses

 Idea Incubator = in-house program that

provides a safe harbor where ideas from
employees throughout the organization
can be developed without interference
from company bureaucracy or politics

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 Model of Change Sequence of Events
Exhibit 11.6

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 OD Activities

Team building

Survey feedback

Large group
intervention

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 OD Approaches to Cultural Change
Exhibit 11.5

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 Three Stages for Achieving
Behavioral and Attitudinal Change

 Unfreezing
 Changing
 Refreezing

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 Forces for Change

 Environmental Forces
– Customers
– Competitors
– Technology
– Economic
– International arena
 Internal Forces – activities and decisions

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 Need for Change
Based on external or internal forces

 Performance gap = disparity between

existing and desired performance
levels.

 Current procedures are not up to standard

 New idea or technology could improve
current performance

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 Resistance to Change
 Self-Interest: fear of personal loss is perhaps the biggest
obstacle to organizational change
 Lack of Understanding and Trust: do not understand the
intended purpose of a change or distrust the intentions
 Uncertainty: lack of information about future events
 Different Assessments and Goals: people who will be
affected by innovation may assess the situation differently

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 Force-Field Analysis Kurt Lewin

 The process of determining which forces

drive and which resist a proposed change

Driving Forces Restraining Forces (Barriers)

•Thought of as problems or •Lack of resources
opportunities that provide •Resistance from middle managers
motivation for change
•Inadequate employee skills

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 Traditional to Just-In-Time Inventory
Systems
Exhibit 11.7

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 Tactics for Overcoming
Resistance to Change
Approach When to Use

 Communication  Change is technical;

 Education users need accurate
information &
analysis

 Participation
 Users need to feel
involved; design
requires information
from others; have
power to resist

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 Tactics for Overcoming
Resistance to Change (contd.)
Approach When to use
 Negotiation  Group has power over
implementation; will
lose out in the change
 Crisis exists; initiators
 Coercion clearly have power;
other techniques have
failed
 Top management
support  Involves multiple
departments or
reallocation of
resources; users doubt
legitimacy of change

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