Lecture management a pacific rim focus chapter 8 fostering an innovative organisation

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

Innovation

Any alteration of the
status quo.

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

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Nature of change & innovation
Forces for change & innovation:
External:
External:Response
Responsetotoopportunities
opportunities
and
andthreats
threatsfrom
fromthe
themarket,
market,regulators
regulators
and
andother
otherelements
elementsofofthe
theenvironment
environment

Internal:
Internal:Strategy
Strategy&&plans,
plans,employees’
employees’
behaviour,
behaviour,change
change&&innovation
innovationdecisions,
decisions,
cultural
culturalchange,
change,restructures,
restructures,
technological
technological&&leadership
leadershipchange
change
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Organisational life cycles
Life cycles:
Predictable stages of development organisations
typically follow.

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Organisational life cycles
Intrepreneurial
Intrepreneurialstage
stage

Collectivity
Collectivitystage
stage

Formalisation
Formalisationand
andcontrol
controlstage
stage

Elaboration
Elaborationof
ofstructure
structurestage
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
Recognitionof
ofopportunity
opportunity
or
oraaproblem
problem

Line
Lineup
uppowerful
powerfulsponsors
sponsors

Develop
Developand
andcommunicate

communicate
aavision
vision

Empower
Empowerothers
othersto
to
act
actout
outthe
thevision
vision

Prepare
Prepareto
toovercome
overcomeresistance
resistance

Plan
Planfor
for&&reward
rewardvisible
visibleprogress
progress

Consolidate
Consolidateimprovements
improvements&&

facilitate
facilitatefurther
furtherchange
change

Monitor
Monitor&&institutionalise
institutionalisechange
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;
Intervention;44 techniques
techniques
••Process
Processconsultation
consultation
••Team
Teambuilding
building
••Third
Thirdparty
partyintervention
intervention
••Technostructural
Technostructuralactivities
activities

Evaluation
Evaluation

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Promoting innovation
Innovation for competitive advantage:
1)1)Hard
Hardfor
forcompetitors
competitorstotoimitate
imitate

Four
Fourfactors
factors
needed
neededto
to
ensure
ensure
advantage
advantage

2)2)Meeting
Meetingsignificant
significantcustomer
customerneeds
needs
3)3)Fit
Fitofofinnovation
innovationtotoorganisation’s
organisation’stime
time

advantages
advantages
4)4)Innovation
Innovationneeds
needstotorely
relyon
oncapabilities
capabilities
accessible
accessibletotothe
theorganisation,
organisation,but
butless
lessso
so
totocompetitors
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.
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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
• Reward systems.
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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 organisation’s members.’

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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.
• Major change
May relate to all four components.
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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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