CHAPTER 8 FOSTERING AN INNOVATIVE ORGANISATION

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Lecture outline
The nature of change & innovation Organisation life-cycles Promoting innovation Key organisational change components

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Nature of change & innovation

Change
Any alteration of the status quo.

Innovation
New idea applied to initiating or improving a process, product or service.

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Forces for change & innovation:

External: Response to opportunities External: Response to opportunities and threats from the market, regulators and threats from the market, regulators and other elements of the environment and other elements of the environment Internal: Strategy & plans, employees Internal: Strategy & plans, employees behaviour, change & innovation decisions, behaviour, change & innovation decisions, cultural change, restructures, cultural change, restructures, technological & leadership change technological & leadership change
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Nature of change & innovation

Organisational life cycles

Life cycles: Predictable stages of development organisations typically follow.

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Organisational life cycles

Intrepreneurial stage Intrepreneurial stage Collectivity stage Collectivity stage

Formalisation and control stage Formalisation and control stage

Elaboration of structure stage Elaboration of structure stage

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Organisational life cycles

Methods of organisational termination: Bankruptcy Liquidation Merger Acquisition Take-over
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Promoting innovation
Recognition of opportunity Recognition of opportunity or a problem or a problem Prepare to overcome resistance Prepare to overcome resistance

Line up powerful sponsors Line up powerful sponsors

Plan for & reward visible progress Plan for & reward visible progress

Develop and communicate Develop and communicate a vision a vision

Consolidate improvements & Consolidate improvements & facilitate further change facilitate further change

Empower others to Empower others to act out the vision act out the vision

Monitor & institutionalise change Monitor & institutionalise change

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Promoting innovation
Organisational development Innovation for competitive advantage Product development Intrepreneurship

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Promoting innovation
Organisational development
Diagnosis Diagnosis

Intervention; 4 techniques Intervention; 4 techniques

Processconsultation Process consultation Teambuilding Team building Thirdparty intervention Third party intervention Technostructuralactivities Technostructural activities

Evaluation Evaluation
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Promoting innovation
Innovation for competitive advantage:
Four Four factors factors needed to needed to ensure ensure advantage advantage
1) Hard for competitors to 1) Hard for competitors to imitate imitate 2) Meeting significant 2) Meeting significant customer needs customer needs 3) Fit of innovation to 3) Fit of innovation to organisations time organisations time advantages advantages 4) Innovation needs to rely 4) Innovation needs to rely on capabilities accessible to on capabilities accessible to the organisation, but less so the organisation, but less so to competitors to competitors
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Promoting innovation
Product development principles: Establish a stage-gate development funnel Establish cross-functional teams Use concurrent engineering Involve both customers & suppliers
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Promoting innovation
Intrepreneurship: Encourage the take-up of entrepreneurship roles by organisation members e.g: Idea generator Idea champion Idea sponsor Idea orchestrator. 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a
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Organisational change components

Structural Technological Human resource Cultural Component inter-relationship

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Organisational change components

Structural component: Job definitions Job groupings Teams Delegation Reporting relationships
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Organisational change components

Technological component:
Technology may drive change/innovation by: Requiring new work methods. Providing/removing competitive edge.

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Organisational change components

Human resources is the vehicle for changing knowledge, skills, perceptions & behaviours needed for a job. It utilises: Recruitment & selection Training Performance appraisal 2003 McGraw-Hill RewardRimAustralia Pty Ltd. Edition. Slides prepared by 17 systems.PowerPoint Slides t/a Management: A Pacific Focus Enhanced

Organisational change components

Major organisational changes often require concomitant changes to organisational culture. Organisational culture can be defined as a system of shared values, assumptions, beliefs and norms linking an organisations 2003 McGraw-Hill Australia Pty Ltd. PowerPoint Slides t/a 18 Management: A Pacific Rim Focus Enhanced Edition. Slides prepared by members.

Organisational change components

Inter-relationship amongst components:
Change to one component creates tensions on other components until they are adjusted accordingly.

Minor change
May relate to only one component.

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Lecture summary
Nature of change & innovation
Distinguishing change from innovation. External & internal forces for change & innovation.

Organisation life cycles

Life cycle stages. Termination.
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Lecture summary
Promoting innovation
Organisational development (OD) Innovation for competitive advantage Product development Entrepreneurship

Organisational change
Key components
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