Chapter 7: Managing Change & Disruptive Innovations

What are some conditions that facilitate change?

- A dramatic crisis occurs - Leadership changes hands. - Culture is weak

Cultural Variables:

- Acceptance of ambiguity - Tolerance of the impractical. - Low external controls - Tolerance of risks - Tolerance of conflicts - Focus on ends - Open-system focus - Positive feedback

Lean Six Sigma:

- Another change process, also known as DMAIC. D = Define: Define the problem. M = Measure: Quantify the problem. A = Analyze: Identify the cause of the problem. I = Improve: Implement and verify the solution. C = Control: Maintain the solution.

Some external factors include:

- Changing consumer needs and wants. - New governmental laws - New technology - Economic changes

Why is disruptive innovation important?

- Disruptive innovations are a threat to many established businesses and responding with sustaining innovations isn't enough. - Large, established, and highly profitable organizations are most vulnerable to disruptive innovations because they have the most to lose and are most vested in their current markets and technologies. - "Skate to where the puck is going to be."

Human Resource Variables:

- High commitment to training and development. - High job security - Creative people

What are some ways managers can make change happen successfully?

- Making organization change capable. - Understanding their own role in the process. - Giving employees a role in the change.

Some internal factors include:

- New organizational strategy - Change in composition of the workforce. - New equipment - Change in employee attitudes. - Missed metrics/something isn't working.

Structural Variables:

- Organic structures - Abundant resources - High interunit communication - Minimal time pressure - Work and nonwork support.

How can stress be reduced?

- Showing realistic job preview during selection process. - Performance planning program. Ex: MBO - Job redesign - Addressing personal stress: -counseling -time management programs -wellness programs

What are some causes of employee stress?

- Task demands - Role demands - Role conflicts - Role overload - Role ambiguity - Interpersonal demands - Organization structure - Organizational leadership

Calm Water Metaphor:

- Unfreezing the status quo. - Changing to a new state. - Refreezing to make the change permanent.

What are the two known metaphors for change processes?

1. Calm Water Metaphor 2. White-water Rapids Metaphor

What are the six techniques for reducing resistance to change?

1. Education and Communication 2. Participation 3. Facilitation and Support 4. Negotiation 5. Manipulation and co-optation 6. Coercion

What are the three specific types of change in scope of change?

1. Incremental Change 2. Transformational Change 3. Strategic Change

What are the three specific types of change in level of change?

1. Individual-level Change 2. Group-level Change 3. Organization-level Change

What are the three areas that can show symptoms of stress?

1. Physical: Changes in metabolism, increased heart and breathing rates, raised blood pressure, headaches, and potential of heart attacks. 2. Behavioral: Changes in productivity, absenteeism, job turnover, changes in eating habits, increased smoking or consumption of alcohol, rapid speech, fidgeting, and sleep disorders. 3. Psychological: Job-related dissatisfaction, tension, anxiety, irritability, boredom, and procrastination.

What are the two specific types of change in intentionality of change?

1. Planned Change 2. Unplanned Change

What are the three dimensions of change?

1. Scope of Change 2. Level of Change 3. Intentionality of Change

The four types of change include:

1. Strategy: Modifying the approach to ensure the organizations' success. 2. Structure: Structural components and structural design. 3. Technology: Work processes, methods, and equipment. 4. People: Attitudes, expectations, perceptions, and behavior. (in individuals and groups)

An environment that stimulates innovation includes three variables:

1. Structural variables 2. Human resource variables 3. Cultural variables

What are four reasons people resist change?

1. Uncertainty 2. Habit 3. Fear of loss 4. Belief that the change(s) is inconsistent with the goals of the organization.

Kotter's Model

An eight-step plan for making a change stick.

Planned Change:

An intentional activity or set of intentional activities that are designed to create movement toward a specific goal or end. - Often involves large groups of people and step-by-step or phase-by-phase activities that unfold over a period of time.

Organizational Change:

Any alteration of people, structure, or technology in an organization.

Encourage Mavericks:

Because their ideas and approaches are outside the mainstream, mavericks can help bring about radical change.

Group-level Change:

Centers on the relationships between people and usually focuses on helping people to work more effectively together. - Team development, or teambuilding, is one of the most common forms of a team change process

Organization-level Change:

A change that affects an entire organizational system or several of its units. Strategic planning and implementation is perhaps the most common type of organization-level change. - Higher-level change programs usually require changes at lower levels. - An organization-level change may require change at both team and individual levels as well.

Individual-level Change:

Focuses on how to help employees to improve some active aspect of their performance or the knowledge they need to continue to contribute to the organization in an effective manner. - Individual-level change programs include leadership development, training, and performance management.

Idea Champion:

Individual who actively and enthusiastically supports new ideas, builds support, overcomes resistance, and ensures that innovations are implemented.

Disruptive Innovation:

Innovations in products, services, or processes that radically change an industry's rules of the game.

The fact that an organization's culture is made up of relatively stable and permanent characteristics tends to:

Make it very resistant to change.

Type B Personality:

People who are relaxed and easygoing and accept change easily.

Type A Personality:

People who have a chronic sense of urgency and an excessive competitive drive.

Scope of Change:

Refers to the degree to which the required change will disrupt current patterns and routines.

Transformational Change:

Significant shifts in an organizational system that may cause significant disruption to some underlying aspect of the organization, its processes, or structures.

Sustaining Innovation:

Small and incremental changes in established products rather than dramatic breakthroughs.

Incremental Change:

Small refinements in current organizational practices or routines that do not challenge, but rather build on or improve, existing aspects and practices within the organization.

Change Agent:

Someone who acts as a catalyst and assumes the responsibility for managing the change process.

Lewin's Model:

Unfreezing --> Changing --> Refreezing

Unplanned Change:

Unintentional and is usually the result of informal organizing. It may or may not serve the aims of the organization as a whole. - Unplanned change may be completely spontaneous, occurring simply because employees in some part of an organization want to initiate change. - Sometimes it occurs as a byproduct of a planned change process. This is because it is difficult for leaders to anticipate all the consequences of a planned change effort. - Employees react in unpredictable ways, technologies don't work as expected, changes in the marketplace don't happen as expected, or other actors may react in unanticipated ways.

Manipulation and Co-optation:

When Used: When a powerful group's endorsement is needed. Advantage: Inexpensive, easy way to gain support. Disadvantage: Can backfire, causing the change agent to lose credibility.

Coercion:

When Used: When a powerful group's endorsement is needed. Advantage: Inexpensive, easy way to gain support. Disadvantage: May be illegal; may undermine the change agent's credibility.

Negotiation:

When Used: When resistance comes from a powerful group. Advantage: Can "buy" commitment. Disadvantage: Potentially high cost; opens doors for others to apply pressure too.

Education and Communication:

When Used: When resistance is due to missing or misinformation. Advantage: Clear up misunderstandings. Disadvantage: May not work when mutual trust and credibility are lacking.

Facilitation and Support:

When Used: When resisters are fearful and anxiety-ridden. Advantage: Can facilitate needed adjustments. Disadvantage: Expensive; no guarantee of success.

Participation:

When Used: When resisters have the expertise to contribute. Advantage: Increase involvement and acceptance. Disadvantage: Time-consuming; has the potential for a poor solution.

Strategic Change:

Either incremental or transformational change that helps align an organization's operations with its strategic mission and objectives.

Innovation:

Taking creative ideas and turning them into useful products or work methods.

Creativity:

The ability to combine ideas in a unique way or to make unusual associations between ideas.

Employee Stress:

The adverse reaction people have to excessive pressure placed on them from extraordinary demands, constraints, or opportunities.

Level of Change:

The breadth of the systems that need to be changed within an organization.

Intentionality of Change:

The degree to which the change is intentionally designed or purposefully implemented.

When a business approaches innovation with a design-thinking mentality:

The emphasis is on getting a deeper understanding of what customers need and want.

White-water Rapids Metaphor:

The lack of environmental stability and predictability requires that managers and organizations continually adapt and manage change actively to survive.