+ UPA 20102

Creativity and Innovation

Dr. Ahmad Nur Aizat

aizat@uthm.edu.my

LECTURE 6
Managing Innovation
+
Introduction
The world as we have created it, is a process of our thinking. It
cannot be changed without changing our thinking. -Albert
Einstein

 Innovation is about making beneficial CHANGES, large and

small, to products, processes and services.

 Changes are unique to each organization.

 However, there are common traits in the way innovation can

be managed in every organization.
+
Technique of Change
 Innovation results in making changes to the organization’s
product, process and services.

 Certain aspects of change theory are applicable to the

management of innovation.

 Organizational change is the process of converting an

organization from its current state to some future desired
state.

 A program or plan is created to identifies what need to be

changed, by whom and when.
+
Technique of Change (cont’d)
Present INNOVATION Future

• Products • Requirement
• Processes • Objectives
• Functions • Indicators
• Organization • Teams
• Information • Projects

 Present state of organization is usually articulated in terms of

understanding current products, processes, organization
structure, etc.

 The future state of organization may be illustrated through

the goals, ideas, and projects that must be implemented to
create change.
+
Technique of Change (cont’d)
 Over the years, a number of technique have emerged for
helping organizations in managing and creating change.

 Change Management Technique are including;

1. Strategic planning

2. Performance measurement

3. Creativity management

4. Project management

5. Knowledge management
+
Technique of Change (cont’d)

Strategic Planning Performance Measurement

• Organization setting out the broad areas for
change over a planning period
• These areas of change are called strategies
or objectives and are aimed at guiding
individuals in the development of ideas
and projects that achieve the objectives
• Involve putting measures or indicators (that
can easily measurable) on certain critical
aspects of an organization ‘s performance
• Indicators can typically used to encourage
and foster change in the organization

Creativity Management Project Management

• Focused on the area of generating ideas
and solving problems
• The organization typically scan the
environment for opportunities and aligns
the ideas it pursues with its defined goals
for the future
• Focuses on the need to manage various
change initiative and task effectively.
• Involve discipline approach to dividing
projects into tasks and scheduling these
task according to resource availability

Knowledge Management
• Focuses on how to effectively
manage change by managing the
information associated with change
+ Change Methods
 Change methods are step-by-step approaches to achieve an
end goal
 Change method promoted by John Kotter (1996) has outlines
8 steps:
1. Establishing a sense of urgency (kewujudan rasa mendesak)
 Involves looking hard at the organization’s competitive position,
communicating this info broadly and dramatically, motivating staff
and employees, looking for leaders and champions of change,
and discussing unpleasant facts openly.
2. Forming a powerful guiding coalition (bentuk gbungan kuat)
 Involves developing a strong bond of loyalty between managers
and the company
3. Creating a vision
 Involves developing a mental image of a possible and desirable
future state that is realistic, credible, and attractive and that most
people can believe in.
+ Change Methods (cont’d)
 Change method promoted by John Kotter (1996) has outlines
8 steps:
4. Communicating the vision
 Involves winning the hearts and minds of individuals.
5. Removing obstacles for acting on the vision
 Includes identifying resistance to change from individuals as
early as possible.
6. Planning for and creating short-term wins
 Necessary to boosting morale and convincing everyone that
overall success is possible
7. Consolidating improvements (kukuhkan tambahbaikan)
 Involves making sure that change sticks and that things don’t
return to the old ways of doing things
8. Retain and maintain new approaches
 Involves making sure that the entire change program leads to
lasting change in the organization
+ Excellent Organizations
 Excellent organizations are those organizations that
continuously revamp, adjust, transform, adapt, and respond to
shifting customers needs, the performance of the
competitors, international trade realignments and
government regulation (Peters and Waterman, 1988).
 8 common attributes of an excellent organizations include;

1. A bias for action

2. Close to the customer
3. Autonomy and entrepreneurship
4. Productivity through people
5. Hands on, value driven
6. Stick to core business
7. Simple form, lean staff
8. Simultaneous loose and tight properties
+ Innovation Culture
 Culture can be defined as the pattern of shared basic
assumptions that an organization has learned to use in
dealing with internal and external changes (Schein 2004).
 Culture reflects the fundamental beliefs of the collective, and
the organization can harness this potential as a powerful
enabler of innovation.
 Organization that develop culture that is aligned with the
requirements of innovation can nurture innovation actions
and increase the innovative capability of the organization.
 However, organization that have a culture that has a poor
alignment can stifle and impede innovation, reducing the
likelihood to success, and will need to work on changing
their culture to a more supportive type.
+ Innovation Culture (cont’d)
 4 key factors are found to either stimulate or depress the
innovation activity (King and Anderson, 1995) are including;
1. People

 Key resources in idea generation and implementation and

making sure that customer’s need are met and exceeded.

 Leaders are responsible for leading the task of identifying

requirements, setting goals for the organization, and making
decisions to ensure good ideas are executed efficiently.
+ Innovation Culture (cont’d)
 4 key factors are found to either stimulate or depress the
innovation activity (King and Anderson, 1995) are including;

2. Structure
 Organizational structures can be either (i)mechanistic or (ii)
organic
 Mechanistic structure have deep and narrow hierarchies
between management and staff, responsibilities are well
defined and rigid, communication through formal
hierarchies, power and authority are based on seniority
 Organic structures have flat and group-based hierarchies,
communications through both hierarchies and across
function, employees have flexible job description, power and
authority are based on ability.
 Large innovative organization implement organic structure to
support their innovation efforts.
+ Innovation Culture (cont’d)
 4 key factors are found to either stimulate or depress the
innovation activity (King and Anderson, 1995) are including;
(merangsang atau menekan aktiviti inovasi)

3. Environment
 The environment will also influence the organization’s
innovation activity
 Example;
 The level of competition in the external environment can force
organization to innovate in order to survive
 In environment where strong links between organization exist,
synergies can emerge that result in innovation

 By enhancing its links with external environment, the

organization can identify more opportunities that may lead to
innovation
+ Innovation Culture (cont’d)
 4 key factors are found to either stimulate or depress the
innovation activity (King and Anderson, 1995) are including;
(merangsang atau menekan aktiviti inovasi)

4. Culture
 Organization cultures were developed from unique
experiences and practices of an organization.
 Certain routines and practices can enhance the
organization’s innovation activity.
+ Types of Culture
 Handy (1985) has developed the theory of organizational
cultures around 4 types of culture, namely, (i) role, (ii) power,
(iii)task and (iv) person.
1. Role
 Role culture is a classic bureaucratic model dominated by
formal rules, regulations and procedures that try to ensure
everyone knows who is responsible for what.
 Rules and regulations are regularly used to stop people from
moving beyond their responsibilities.
 Role cultures are not generally effective for the promotion of
innovation
 This is because, to be innovative, people are often required
to take risk including thinking outside their current roles and
challenging other’s responsibilities
+ Types of Culture (cont’d)
 Handy (1985) has developed the theory of organizational
cultures around 4 types of culture, namely, (i) role, (ii) power,
(iii)task and (iv) person.
2. Power
 Power cultures are generally found in organization that have
developed around one person (eg: Small to medium
enterprises).
 Decision was made by one or two strong people. Limited
authority and responsibility are shared with other people in
the organization.
 To promote innovation, ideally staff need to share their view
with the power figures since such culture can contribute to
effective innovation.
+ Types of Culture (cont’d)
 Handy (1985) has developed the theory of organizational
cultures around 4 types of culture, namely, (i) role, (ii) power,
(iii)task and (iv) person.
3. Task
 Task cultures are generally associated with matrix structures
in large organizations
 People report to different managers depending on the task
being executed.
 Matrix cultures are flexible and adaptable, with high value
placed on individual and group performance.
 Task cultures are effective to innovation in established and
growing organizations.
+ Types of Culture (cont’d)
 Handy (1985) has developed the theory of organizational
cultures around 4 types of culture, namely, (i) role, (ii) power,
(iii)task and (iv) person.
4. Person
 Person cultures appears in organizations comprising a
number of highly skilled people
 Such organization are often highly decentralized and contain
informal structures
 Person cultures can generates a high level of innovation for
the people involved
+ Types of Culture (cont’d)

Leadership

Learning Agile
focus structure

Features to
support
organization
culture
towards Mix of
Supporting innovation individual
system

Outward Adequate
focus resources
+ Types of Culture (cont’d)
• Can communicate the importance of innovation to other
Leader people
• Remove barriers that can hinder innovation

• Allow cross-boundary collaboration that will support

Structures innovation actions through teams that possess broader skills
and are less biased in their perspectives

• Correct mix of individual provides the skills and background

Mix of individuals to collaboration and creativity to occur
• Provide training for staff

•Adequate resources (financial and human) are needed to

Adequate resources engage innovation activities

• Organization need to adopt outward focus because

increased scanning of the external environment can opens
Outward focus the organization to new knowledge, opportunities and
insights.
• Can support innovation activity through appropriate
Supporting system training in problem-solving technique or routines for
screening potential innovations

• Learning can result in the generation of new knowledge

Learning focus and concept that can be exploited in the future
+ Barriers to Innovation
 Kelley & Littman (2001) identify the barriers and bridges to
innovation

Barriers Bridges
Hierarchy Merit based
Bureaucracy Autonomy
Anonymity Familiarity
Clean Messy
Experts Tinkerers
+ Barriers to Innovation (cont’d)
 Kelley & Littman (2001) identify the barriers and bridges to
innovation
1. Hierarchy vs Merit based
 Excessive hierarchy can be a barrier to innovation when
decisions and ideas need to follow vertical paths through the
decision-making hierarchy
 On the other hand, flat organization that are willing to accept
ideas from all sources based on merit are supportive to
innovation
2. Bureaucracy vs Autonomy (self-government)
 Excessive bureaucracy can stifle innovation and slow the
necessary innovation that sustains growth.
 On the other hand, greater autonomy and discretion
(diplomacy) allow individuals and teams to take the risks
necessary to change.
+ Barriers to Innovation (cont’d)
 Kelley & Littman (2001) identify the barriers and bridges to
innovation
3. Anonymity vs Familiarity (ketidakpastian vs kepastian)
 Anonymity becomes a barrier when individuals are
unprepared to notice change or simply lie low when difficult
decisions must be made.
 On the other hand, innovative organization foster a culture of
familiarity between individuals in which goals, problems, and
ideas can be discussed openly.
4. Clean vs Messy
 Another barrier to innovation can be creating a clean
environment in which procedures are strict and everyone
fulfills a particular role
 On the other hand, innovative organization tend to be messy
and based on bringing unfamiliar things together to nurture
creativity.
+ Barriers to Innovation (cont’d)
 Kelley & Littman (2001) identify the barriers and bridges to
innovation
5. Experts vs Tinkerers
 Expertise can inadvertently (unintentionally) stifle ideas
through excessive criticism of the ideas of people who are
not seen as having the appropriate skills to generate ideas.
 On the other hand, in organization of tinkerers, it is common
to find people who are willing to experiment, take risks, and
explore new avenues and spaces.
+ Barriers to Innovation (cont’d)
 Sheth & Ram (1987) outlined additional barriers to innovation
including;

1) Expertise barriers

2) Operational barriers

3) Resource barriers

4) Regulations barriers

5) Market access barriers

+ Adapting Culture
 Culture is not something that can be altered/changed quickly
 Organization that tries to change encounters resistance
because it is ingrained (deeply embedded) in the norms and
practices of employees
 Culture is a learned belief that can evolve slowly in response
to certain stimuli.
 Culture can be changed to better align an organization with
the need of greater innovation
 One model that is supportive of cultural change is Johnson &
Scholes (2002) cultural web
 This model identifies 7 key elements that provide stimuli for
affecting change in an organizational culture including,
paradigm, power structure, organizational structure, control
system, symbols, stories, and rituals and routines.
+ Adapting Culture (cont’d)
1. Paradigm
 Paradigms are the set of assumptions commonly held to be
true and accepted across the organization
 Employees rely on these paradigms to undertake their day-
to-day operations
 Paradigms provide stability within an organization over time
and provide a frame of reference
 However, inappropriate or outdated paradigm can result on
employee having an imperfect perspective on their
environment
 Therefore, management must understand the paradigm
present in their organizational collective and assess whether
these paradigms are appropriate to nurturing innovation
+ Adapting Culture (cont’d)
2. Power structure
 This defines how power is distributed across the organization
and the influence this power can exert.
 The most powerful group in the organization consists of
people who are closely aligned with the beliefs and
assumptions that is important to the organization.
 These powerful people have the ability to influence the
organizational paradigm.
 Hierarchy is often the basis of the power structure in an
organization.
 Power structure can also based on knowledge and expertise,
the ability to reward and punish and even an individual’s
charisma.
 Structuring power based on certain parameters such as
knowledge and expertise can contribute to innovation.
+ Adapting Culture (cont’d)
3. Organizational structure
 The type of organizational structures influence the behavior
and attitude of people/employees in the organization.
 These structures reflects the formal and informal ways power
is delineated (defined) and highlight important relationships
and communication channels
 Mechanistic structure- lead to functional silos (organization
whose functions tend to be less communicative and
collaborative) and poor communication, both of which can
inhibit collaboration and creativity.
 Organic structure- can encourage interaction between
boundaries and influence the power structures and
paradigms evident in the organization.
+ Adapting Culture (cont’d)
4. Control system
 The control system reflects where the organization places its
emphasis and what it deem important.
 The various measures the organization pursues and the
mechanisms it uses to motivate and punish certain actions
are strong predictions of human behavior.
 Overly rigid control system can prevent innovation by taking
creativity and risk out of the organization and communicating
inappropriate message to the employees.
+ Adapting Culture (cont’d)
5. Symbols and Stories
 Culture is synonymous with the tradition and history of the
organization.
 Stories and symbols are important mechanisms for
embedding the present in the organization’s history and
reinforcing the beliefs and paradigms of the organization.
 Symbols can be powerful representations of the nature of the
organization and can influence the behavior of employees.
 Organizations can effect cultural change by promoting
stories and symbols to reinforced the desire culture and
creating champions and routines that support the change.
+ Adapting Culture (cont’d)
6. Rituals and routines
 The rituals and routines practiced by the organization are
often a practical manifestation of the organizational culture.
 These routines represent the normal mode in which the
organization operates and reinforce the cultural beliefs at an
operational level
 The organization can influence its culture by modifying these
routines.
+ Managing innovation
 Innovation management is the process of managing
innovation within an organization.
 This includes;
 managing ideas, goals, projects, and initiatives;
 Improving communication; and
 Managing innovation teams
 To sustain in the future, organization must learn to innovate
and replace existing products, processes and services with
more effective ones.
 Continuous innovation and learning are important to prevent
organization from repeating mistakes of the past and to
improve their ability to exploit prospective opportunities.
+ Managing innovation
 According to Franklin (2003), the success of an innovation is
influenced by factors such as;
 The inherent characteristics of the innovation
 The external environment into which it will be introduced
 The organization’s supporting infrastructure
 The characteristic of potential adopters and their perceptions of
the innovation and organization

 Innovation management is the process of managing

information, people and technology associated with
innovation to influence the final outcome.

 It relates to the plans and routines the organization has

developed to nurture an innovation from birth of idea as a
creative idea through to an final delivery to the market.
+

Thank you
aizat@uthm.edu.my