TMIA

MBA1 ASSIGNMENT
INNOVATION
SUBMITTED BY
SHABAZZ .Y. ABDULRAHMAN
L0830MIMI0210
LECTURER: UMA MOHAN

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Contents
Introduction...........................................................................................................................................3
Category of innovation and changes derived.........................................................................................3
The triggers of the innovation................................................................................................................3
Implementation Mechanism..................................................................................................................4
Evaluating the change management for the innovation.........................................................................4
Staff perception of change.....................................................................................................................4
The role played by the management in managing the change and the innovation.................................5
The Benefits of the innovation..............................................................................................................5
Discussion and Conclusion....................................................................................................................7
Reference...............................................................................................................................................8

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Introduction
In the retail industry effectiveness at the point of exit sales (checkouts) is a very important factor that
cannot be ignored, management has always recruited workers that are very sharp and fast in dealing
with customer shopping at the checkout- two of the major reason for these is 1.) it reduce the queues
(thereby improving customer’s over all shopping experience) and 2.) it drives up the volume of
customers served by the minute (thereby increasing the conversion rate per customer head count for
the company which in turns increase sales volume).

This report focuses on the use of innovation in the retail industries (especially super markets and
mega stores) to improve the way it provides its services to their customers. The innovation we are
talking about here is the introduction of self-service check outs at the tills in super markets.

Category of innovation and changes derived.

This innovation can be categorized in several facets of innovation technologies, first of all the need to
provide effective and efficient series is the driving force behind management’s decision to introduce
this technology into their business so we can say this type of innovation is falls under product and
services innovation (the later i.e. services more appropriate) because it applies to how services at the
supermarket is improved to provide efficient shopping experience to customers.

The type of innovation can also be classified under operational innovation- because it improves the
effectiveness and efficiency of one of the core processes and function of business operation in this
particular industry.

The type of change that this innovation leads to can be classified as a Transformational change,
because the innovation has fundamentally transformed the way the business operates to drive revenue.

The triggers of the innovation

The innovation was triggered by the following:

 The needs for the company to operate efficiently and save cost
 Thereby reducing the number of manned tills, replacing them with self-service checkouts.
 Long term profitability.
The above key points are the drivers for change [BURN 2004]. As the need for management
to improve services is derived from operational efficiency, the key motivating factor is the
fact that there will be a long term saving with the introduction of this type of innovation. Even
though the initial cost of implementing it is high, the new technology will very much provide
the company with long term overall all saving looking at it from HR perspectives, various
cost of managing real employees are eliminated (wages, benefits, holiday pay etc.).

Approaches adopted in managing this innovation

The approach or approaches adopted by the management in dealing with this innovation can
be broken down into several facets; first of all there is the realization of the need for the
company to move in the direction of saving cost and most of all operate efficiently by provide
value added service to their esteemed customers, so a need for the change was established by
the management. This can be done in various ways- first there will be a high level
management decision that must be taking regarding which direction the company is moving

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 and why they need to change. Once this is established at the top management level (that is
after all the market research and feasibility studies have been carried out).
The next move by the top management is to involve the line managers who will then discuss
the proposed changes that will be taken place due to the introduction of the innovation with
the various parries that will be affected by the innovation (for example the checkout staff) this
meeting will be between the checkout line managers and the check-out staff and some of the
issues that will be addressed in the meeting will include:
 The new role the staff will assume when the innovation is finally introduced
 How will this affect their position in the company?
 What training will be provided etc.?
Once all these are in place then the issue of staff resistance to the proposed changes will be
reduced (if not eliminated).

Implementation Mechanism
In order to successfully implement this innovation and manage the change that comes with it,
the management first must commit to the course by understanding the need for the changes
themselves, and also factor in the entire possible scenario involved with staff initial
apprehensiveness to the change that will be take place.

Evaluating the change management for the innovation

The pervasive nature of the staff involved and organizational culture means that if change is
to be brought about successfully, it is likely to involve changes to culture [MULL 2007], and
in reality any changes that would require or trigger a change in the way people go about their
cultural activities are most likely to be met with a certain degree of resistance. One may be
pushed into asking the question, where does the impetus for change comes from? The simple
answer to this question is that the impetus for change actually comes from the environment.
Leaders with the grasp of strategic planning understand that change in a strategic environment
is a continuous process

Staff perception of change

This relates to how the staff view the change, a change could be thought of as a condition and a
process:- here change as a condition describes what is occurring in the environment, it is usually part
of the reality we have to put up with. This sort of changes tends to take place externally while change
as change as a process is usually what we develop internally in response to changes in the
environment.

Changes could be planned or unplanned, planed changes as described by Robbins and Cenzo, are
change activities that are intentional and goal oriented [ROBB and CENZ 2008] planned change is
focused on maintaining an organization’s relevance in the light of environmental pressures. While
unplanned change just happens in reaction to unforeseen or unanticipated influences.

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Other perceptions of change include viewing a change as been Tactical or strategic, tactical been a
type of change which occurs in the short-term and usually short-lived.

The role played by the management in managing the change and the
innovation
In response to the anticipated resistance by the check-out staff, the management followed some
underlying principal approach to overcoming resistance to change, we can point out some of the key
ones which were really crucial to the perception and the psychology of the employees below:

 Education and Communication:- the company was able to overcome the resistance for the fear
of the un-known by providing training course to educate the staff on the new retail priorities
of the company and how to overcome any retail obstacle they may face while dealing with
customers that will be using these new systems. This in turn helped to enlighten the staff and
gave them a reassurance about the future of their job.

 Facilitation and Support: the company also helps to facilitate the overall change experience
the employees went through ensuring that all the necessary support and facilities they needed
for coping with the changes were in place.

 Negotiation; - this was another important approach in the sense that this approach has a direct
economic consequence of the outcome. And it further helps to re-enforce the commitment of
the company to cater for the welfare of their staff.

By providing the appropriate education and training and facilitating support for the staff, the
management was able to bring the check-out staff on their side and together they work to
support the implementation of this new innovation.

The Benefits of the innovation

The self-service check-out was introduces with the intension of bringing an end to the long
queues to in the super market and to help drive up sales volume through improved efficiency
at the check-out, key issue here is that even though this technology was introduces in the mid-
1990s, it still remains ever so new as if it was just introduced yesterday.

The innovation of self-service check-outs has been very beneficial to the company and to
customers alike, like with every new technological innovation, there will always be some
dissatisfy factions and there will always be some pleased ones!

Over all the company benefited from the introduction of the technology because it was able to
cut cost and improve customer experience for the better. A survey on the BBC [BBC web]
shows that there are over 256 Tesco stores use self-service checkouts, processing about 25%
of transactions. Some of the benefit derived from the introduction of this innovation can be
enumerated below:

 Cost cutting and operational efficiency

 Speeding up of customer shopping thereby improving their shopping experience:- as
noted by the comments of this customer during a survey “I  always use self-service

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 checkouts, I rarely have issues and it is much quicker. I don't understand why people moan
about these tills, after all it’s a choice, if you don't like them, don't use them.”
Sarah, Essex [BBC web].
 The privacy of shoppers is now much more guaranteed:- this is a very important point
to some customers, as gathered by one customer during the (BBC survey) –“I  love
self-service checkouts. I can buy those embarrassing items without anyone knowing, don't
have to stand behind women or old people fiddling with their purses, and can avoid all form of
contact or "conversation" with the checkout assistants.” -Mike Wright, Birmingham [BBC
Website]
 The benefits of the innovation to the organization also includes the ability for the
organization to compete in the ever challenging environment of the retail industry
where the need to improve and maximise customer throughput by positive conversion
is a key factor. They are able to provide the facilities to customers and having their
staff trained on how to use this new technology also help to reinforce support for staff
and also help for customers who are going to be using the system. This will inspire
confidence in the overall shopping experience of the customers.

The overall benefit of the innovation will have to be in the way the management was able to handle
the changes that accompanied the introduction of this innovation, management has been able to gain
an insight into how such an innovation is managed from the various stages of its introduction up to the
point of operation. This provides an invaluable experience to the management.

Recommendation for improvement

Just like every new innovation driven by the use of technology, there will always be a room for
improvements and making necessary adjustment to cater for unexpected behaviour of the new system,
or even the usual suspect of staff mal-handling the equipment in order to jeopardise the facilities (due
to resistance sometimes).

With respect to the view point expressed above, here are some recommendations that can come handy
as the innovation is been used within the organization:

 There should be the need to seek for ways in which the innovation can be improved, to cater
for other customer demands.
 The affected staff should be involved at the key stages of implementing the innovation to
foster a health sense of appreciation (of efforts) and belonging, and this will in general
increase the level of trust between staff and management.
 To manage the innovation effectively in the future; it will be important if management uses a
clear performance measures to justify how teams will be appraised on how best they have
been able to maintain the innovation.
 Management should also thrive to always keep the communication channel open to
suggestion at all times, this is important because any sudden impromptu change in plans could
re-ignite the old trust problems that may exist between the management and the staff
members.

 There should also be the need for management to focus on cultural changes within the system
as a whole; this will help the management to understand how some external factors might
affect the performance of the new innovation.

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Discussion and Conclusion

As pointed out by experts in the fields of change management (Atkinson for example) as narrated in
[MULL 2007], one of the major problem in championing and implementing change in an organization
when there is the need to use technology to innovate new processes at work, is the ability to deal with
and manage the resistance that is often encountered. The resistance should be welcomed as a healthy
response, as in the case of the managements of these retail company (Tesco) even though the recent
economic situation favours the company in the sense that if any staff threating’s to quit due to the
introduction of the proposed changes, a lot of people would be willing to take a job offer on the go
That option might not be an economically viable one as they would be employing less experience
staff and then have to start from scratch with regards to training, process and deployment training etc.

We can hence conclude that in order to successfully implement a new operational procedure that is
driven by technological innovation, and best practices in an organization, the willingness and effective
co-corporation of staff, managerial colleges and unions alike are very paramount to the overall
success of the change process and resistance to change should always be viewed as an opportunity to
improve rather that looked at as a negative thing, as the innovation is introduced in order to make life
easy for all parties involved (customers, staff, and the management), it would also provide
opportunities that are endless in the area of training to keep up with the best practice.

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Reference
1. [BURN 2004] Burnes B (2004) Managing Change, 4th edition, FT Prentice Hall

2. [MULL 2007] Mullins, L.J (2007) “management and organizational behavior”, Essex,
England. Prentice Hall

3. [ROBB and CENZ 2008] Robbins, S, Cenzo, D (2008) “Fundamentals of management;

Essential Concepts and Applications”. UK Pearson Education

4. [HELM et al 2009] (2009). Jean H.M, Kelly, D. and Albert J.M “understanding
Organizational Change”. Abingdon, Oxon. Routledge Publishers

5. [The BBC website] “survey on the use of self-service check out” –[internet]
http://news.bbc.co.uk/1/hi/8399963.stm

6. Fitzsimmons, J. A & Fitzsimmons, M. J. (2006) Service Management: Operations Strategy,

Information Technology, 5th edition, Singapore: McGraw Hill International Edition

7. Lecture notes

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