MCO 101

Unit 4: Innovation and change

MANAGEMENT

Managing Expectations
TOPIC DETAILS:
After going through UNIT 4, you should be able to:

MCO 101
Issue : 2016

explain why innovation matters to companies.

discuss the different methods that managers can use to
effectively manage innovation in their organizations.
Discuss why the changing can lead to organizational decline.
Discuss the different methods that managers can use to
better manage change as it occurs.

MANAGEMENT

2
Source: by South-Western, a division of Thomson Learning. All rights

Why Innovation Matters

Technology
Cycles

MCO 101
Issue : 2016

Innovation
Streams

MANAGEMENT

3
Source: by South-Western, a division of Thomson Learning. All rights

Why Innovation Matters

1900-1910
airplane, plastic, air
conditioner
1911-1920
mammogram, zipper, sonar
1921-1930
talking movies, penicillin, jet
engine
1931-1940
radar, helicopter, computer
1941-1950
atomic bomb, bikini,
transistor
1951-1960
DNA, oral contraceptive,
Tylenol
MCO 101
Issue : 2016

1961-1970
video recorder, handheld
calculator, computer mouse
1971-1980
compact disc, gene splicing,
laser printer
1981-1990
MS-DOS, space shuttle,
CD-ROM
1991-2000
taxol, Pentium processor,
Java
2001-Today
mapping of human genome,
first cloning of human
embryo

MANAGEMENT

4
Source: by South-Western, a division of Thomson Learning. All rights

Technology Cycles
Technology Cycle
A cycle that begins with the
birth of a new technology and
ends when that technology
reaches its limits and is replaced
by a newer, better technology.

MCO 101
Issue : 2016

MANAGEMENT

5
Source: by South-Western, a division of Thomson Learning. All rights

S-Curves and
Technological Innovation
Technological Discontinuity

Patterns of innovation over

time that can create
sustainable competitive
advantage.

A scientific advance or unique

combination of existing technologies
that creates a significant
breakthrough in performance or
function.

Performance

Innovation Streams

Discontinuity

New
Technology

B
A
Effort

MCO 101
Issue : 2016

MANAGEMENT

6
Source: by South-Western, a division of Thomson Learning. All rights

Technological Innovation

Technological
Discontinuities
Technological
Substitution
Discontinuous
Change
Design
Competition
Dominant Design

MCO 101
Issue : 2016

MANAGEMENT

7
Source: by South-Western, a division of Thomson Learning. All rights

Managing Innovation
Organizational
Encouragement
Challenging
Work

Lack of Organiz.
Impediments

Supervisory
Encouragement
Creative
Work
Environments

Work Group
Encouragement

Flow
Freedom

MCO 101
Issue : 2016

MANAGEMENT

8
Source: by South-Western, a division of Thomson Learning. All rights

Managing Innovation
Experimental
Approach

Environment

Uncertain discontinuous
change:
technological substitution
and design competition

Certain incremental change

established technology
(i.e., dominant design)

Speed
Performance Improvements
New dominant design

Speed
Lower costs
Incremental improvements
in performance of dominant
design

Build something new,

different, and better

Compress time/steps needed

to bring about small
improvements

Design iterations
Testing
Milestones
Multifunctional teams
Powerful leaders
MANAGEMENT

Planning
Supplier involvement
Shorten time of steps
Overlapping steps
Multifunctional teams

Goals

Approach

Steps
MCO 101
Issue : 2016

Compression
Approach

Source: by South-Western, a division of Thomson Learning. All rights

Five Stages of Organizational

Decline
Blinded
Blinded
Inaction
Inaction
Faulty
Faulty
Action
Action
Crisis
Crisis
Dissolution
Dissolution
MCO 101
Issue : 2016

MANAGEMENT

10
Source: by South-Western, a division of Thomson Learning. All rights

Managing Change
Change
Change Forces
Forces

Change
Change

Resistance
Resistance Forces
Forces
MCO 101
Issue : 2016

MANAGEMENT

11
Source: by South-Western, a division of Thomson Learning. All rights

Managing Change

Managing
Managing
resistance
resistance
to
tochange
change
What
Whatnot
not
to
todo
dowhen
when
leading
leadingchange
change
Different
Differentchange
change
tools
toolsand
and
techniques
techniques
MCO 101
Issue : 2016

MANAGEMENT

12
Source: by South-Western, a division of Thomson Learning. All rights

Managing Resistance to
Change

Unfreezing

Share reasons
Empathize
Communicate

MCO 101
Issue : 2016

Change
Intervention

Benefits
Champion
Input
Timing
Security
Training
Pace

MANAGEMENT

Refreezing

Top management
support
Reinforce

13
Source: by South-Western, a division of Thomson Learning. All rights

Managing Resistance to
Change
Education
Education and
and Communication
Communication
Participation
Participation
Negotiation
Negotiation
Managerial
Managerial Support
Support
Coercion
Coercion
MCO 101
Issue : 2016

MANAGEMENT

14
Source: by South-Western, a division of Thomson Learning. All rights

Errors Made when Leading

Change
Unfreezing
Unfreezing
1.
1. Not
Not establishing
establishingaagreat
greatenough
enoughsense
senseof
ofurgency.
urgency.
2.
2. Not
Notcreating
creatingaapowerful
powerfulenough
enoughguiding
guidingcoalition.
coalition.
Change
Change
3.
3. Lacking
Lackingaavision.
vision.
4.
4. Undercommunicating
Undercommunicatingthe
thevision
visionby
byaafactor
factorof
of10.
10.
5.
5. Not
Notremoving
removingobstacles
obstaclesto
tothe
thenew
new vision.
vision.
6.
6. Not
Notsystematically
systematicallyplanning
planningfor
forand
andcreating
creatingshort-term
short-termwins.
wins.
Refreezing
Refreezing
7.
7. Declaring
Declaringvictory
victorytoo
toosoon.
soon.
8.
8. Not
Notanchoring
anchoringchanges
changes in
inthe
thecorporations
corporationsculture.
culture.
MCO 101
Issue : 2016

MANAGEMENT

15
Source: by South-Western, a division of Thomson Learning. All rights

Change Tools and Techniques

Results-Driven
Results-DrivenChange
Change
General
General Electric
ElectricWorkout
Workout
Transition
TransitionManagement
Management Teams
Teams
Organizational
OrganizationalDevelopment
Development
MCO 101
Issue : 2016

MANAGEMENT

16
Source: by South-Western, a division of Thomson Learning. All rights

Results-Driven Change
1.
1. Create
Create measurable
measurable short-term
short-term goals
goals to
to improve
improve performance
performance
2.
2. Use
Use action
action steps
steps only
onlyifif likely
likelyto
to improve
improve performance
performance
3.
3. Stress
Stress the
the importance
importance of
of immediate
immediate improvements
improvements
4.
4. Consultants
Consultants and
and staffers
staffers should
should help
help managers
managers achieve
achieve
quick
quick improvements
improvements in
in performance
performance
5.
5. Test
Test action
action steps
steps to
to see
see ifif they
theyyield
yield improvements
improvements
6.
6. ItIt takes
takes few
few resources
resources to
to get
get results-driven
results-driven change
change started
started
MCO 101
Issue : 2016

MANAGEMENT

17
Source: by South-Western, a division of Thomson Learning. All rights

General Electric Workout

Day
1.Boss discusses agenda and targets specific business
problems, then leaves
2.Outside facilitator works with
teams, who debate solutions
3.Town Meeting
teams make suggestions
boss must decide on the spotagree, say no, or ask for more information

MCO 101
Issue : 2016

MANAGEMENT

18
Source: by South-Western, a division of Thomson Learning. All rights

Transition Management Team

A team of employees whose full-time job is to

manage and coordinate change

Anticipate and manage employee reactions to

change
Work with the CEO to
decide on change projects
select and evaluate people in charge
make sure change projects are complementary
MCO 101
Issue : 2016

MANAGEMENT

19
Source: by South-Western, a division of Thomson Learning. All rights

Organizational Development

A philosophy and collection of planned

change interventions
Designed to ensure an organizations longterm health and performance
Change Agent
the person formally charged with guiding a change
effort
can be an internal or external person

MCO 101
Issue : 2016

MANAGEMENT

20
Source: by South-Western, a division of Thomson Learning. All rights

Organizational Development
1.
2.
3.
4.
5.
6.
7.
8.

MCO 101
Issue : 2016

Entry
Startup
Assessment and Feedback
Action Planning
Intervention
Evaluation
Adoption
Separation

MANAGEMENT

21
Source: by South-Western, a division of Thomson Learning. All rights