Chapter 11 Change and Innovation

1. 2. 3. 4. 5. Organization change is defined as the adoption of a new idea or behavior by an organization. Disruptive innovation refers to innovation in products, services, or processes that radically change an industrys rules of the game for producers and consumer. Ambidextrous approach mean incorporating structures and processes that are appropriate for both the creative impulse and the systematic implementation of innovations. Product Change is a change in the organizations product or service outputs. Technology change is a change in the organizations production process- how the organization does its work.

Three critical innovation strategies for changing products and technology

Creativity Experimentation Idea incubators Horizontal coordination mechanisms customers, partners open innovation Idea champions New venture teams Skunkworks New venture fund

Exploration

Cooperation

Entrepreneurship

6.

Creativity refers to the generation of novel ideas that might meet perceived needs or respond to opportunities for the organization.
The Creative Organization Or Department Open Channels of communication contact with outside sources overlapping territories, cross-pollination of ideas across disciplines Suggestion system, brainstorming, freewheeling discussions Assigning nonspecialists to problems Eccentricity allowed hiring outside your comfort zone Decentralization,loosely defined position, loose control Acceptance of mistakes, rewarding risk-taking people encouraged to challenge their bosses Freedom to choose and pursue problems Not a tight ship, playful culture, doing the impractical freedom to discuss ideas long time horizon Resources allocated to creative personnel and projects without immediate payoff Reward system encourages innovation Absolution of peripheral responsibilities

The Creative Individual 1. Conceptual fluency openmindedness

2.

Originality

3.

4.

5.

Less authority Independence Self-confidence Playfulness Undisciplined exploration Curiosity Persistence commitment Focused approach

7. Idea incubator is an organizational program that provides a safe harbor where employees can generate and develop ideas without interference from company bureaucracy or politics. 8. horizontal linkage model mean that several departments, such as marketing, research, and manufacturing, work closely together to develop new products. 9. Fast-cycle team is a multifunctional team that is empowered with autonomy and high level of resources to speed an important new product or service to market.

10. Open innovation is some companies, extend the search for innovative ideas beyond the boundaries of the organization. 11. Crowdsourcing an open innovation approach used by Threadless and other companies, taps into ideas from around the world and lets thousands or hundreds of thousands of people participate in the innovation process, usually via the internet. 12, Entrepreneurship mean developing an internal culture, philosophy, and structure that encourages entrepreneurial activity and produce a higher than average number of innovations. 13. Idea champion is a person who sees the need for change and is passionately committed to making it happen. 14. New-venture team is a unit separate from the rest of organization that is responsible for developing and initiating a major innovation. 15. Skunkworks is a separate small, informal, highly autonomous, and often secretive group that focuses on breakthrough ideas for the business. 16. New-venture fund provides financial resources from which individuals or team can draw to develop new ideas, products, or business. Four roles in organizational change Inventor Develops and understands technical aspects of idea Does not know how to win support for the idea or make a business of it. Champion Believes in idea Visualizes benefits Confronts organizational realities of cost, benefits Obtains financial and political support Overcomes obstacles Sponsor High level manager who removes organizational barriers Approves and protects idea within organization Critic Provides reality test Look for shortcomings Defines hard-nosed criteria that idea must pass

Coordination Model For Innovation

New Technologies

Open Innovation Mechanisms

Organization

Manufacturing Department Research Department Marketing Department Horizontal Linkages

Formal Innovation partners

Customers, Market Needs