Innovation and Change

BA 152

Pressures for Innovation and Change

Competition Global Markets

Technology

New WorkStructures

Demographics

ORGANIZATIONALCHANGE

Faster CycleTimes

Possible Targets for Change

Environment

Culture

Technology Products/Services

Goals

Structures

People

Processes

FIT!FIT!

Strategy

Systems

Determine the need for change- Current Situation- Desired Situation- Is the gap big enough to make a difference?

One Model of ChangeStep 1

Overcome obstacles to change- Organizational- Functional- Group- Individual

One Model of Change: Step 2

Determine the strategy for change- Revolutionary / Top Down- Evolutionary / Bottom Up

One Model of Change: Step 3

Solidify or Institutionalize the Change

One Model of Change: Step 4

DRIVING FORCES

Competition

New Technologies

Changes in Strategy

New opportunities

FELT NEED FOR CHANGE

RESISTING FORCESSTATUS QUO

Overcoming Obstacles to Change: Force Field Analysis

Focus on costs

Lack of benefits

Lack of coordination

Uncertainty avoidance

Fear of loss

• Education

• Participation

• Facilitation

• Negotiation

• Manipulation

• Coercion Less

More

COMMITMENTTIME

Less

More

To Overcome ObstaclesWhat can you do?

Fast Slow

Little/None Much

Destroy/Ignore Win Over

Have Don’t have

Careful PlanningEvolving/Adapting

Factors

Speed

EmployeeInvolvement

Resistance

Power

Execution

Making the ChangeHow Can You Do It?

Mr. RogersDonald Trump

Implementation Options

Strategic Intent Precise BroadStyle Top-Down Bottom-UpScope Isolated Org.-WideSpeed Fast SlowScale Small LargeSubstance Hard SoftSequence Hard-Soft Soft-Hard

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

Strategic Intent Precise BroadStyle Top-Down Bottom-UpScope Isolated Org.-WideSpeed Fast SlowScale Small LargeSubstance Hard SoftSequence Hard-Soft Soft-Hard

The 7S’s of Implementing Change

STYLETop-Down--Bottom-Up

SCOPEIsolated--Org.Wide

SUBSTANCESoft--Hard

SPEEDSlow--Fast

SCALESmall--Large

SEQUENCEHard-Soft--Soft-Hard

STRATEGICINTENT

Precise--BroadFIT!

FIT!

• 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.

To Insure It WorksWhat should be done?

Remember . . .

If change is the only constant in organizations, then . . .

Organizations must be constantly ready to change.

Sustaining versus Disruptive Innovation

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 Technologies• Those technological changes that improve the

performance of established products along dimensions of performance that mainstream customers in major markets have historically valued.

Examples?• Automobiles• Disk drives• Department stores

Sustaining versus Disruptive Innovation

Technological change and the market

Time

Pro

du

ct P

erf

orm

an

ce

Performancedemanded at the high

end of the market

Performancedemanded at the low

end of the market

Progress due to

susta

ining tech

nologies

The Innovator’s Dilemma

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.

Examples?• Disk drives• Discount department stores• Automobiles?

Time

Pro

du

ct P

erf

orm

an

ce

Performancedemanded at the high

end of the market

Performancedemanded at the low

end of the market

Progress due to

susta

ining tech

nologies

Progress due to

disruptiv

e tech

nologies

Disruptivetechnological

innovation

Technological change and the market

The Innovator’s Dilemma

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

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.

Next Time

Shoe Corporation of Illinois