HC1031 Managing People and Organization

Lecture 7: Part A

Managing Change and Innovation

 Unit Objectives & Learning Outcomes

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 Unit Objectives & Learning Outcomes

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 What you will learn in Part 7A

1. Discuss and define innovation and organizational change

2. Explain how disruptive innovation and ambidextrous approach are
possible responses to the forces that drive
3. Describe the exploration activities that organisations can undertake
to ensure their products and technologies remain relevant for the
work that they do and the value they create
4. Explain the value of cooperation, creativity, a bottom-up approaches,
internal contests, idea incubators, idea champions and new-venture
teams for innovation

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 Management Challenge

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 Samsung - Innovation

The Samsung managers were not alone in struggling with change.

However rather than focusing on ways to improve efficiency and cut
costs, today’s companies are rewiring their organizations for creativity
and innovation.

Samsung Vice Chairman and CEO Jong-Yong Yun said,’The race for
survival in this world is not to be the strongest, but to be the most
adaptive’.

Samsung has been at the leading edge of OLED television screen

development, producing curved screen television, transparent displays
and integrating TV screens into mirrors for commercial application.

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 Trending…

The knowledge economy of the 1990s and early 2000s is

being transformed into the ‘creativity economy’

Small economies find it difficult to compete against the Asian

companies on cost. Creativity and innovation is not just a nice
to have, but are essential capabilities for survival

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 Turbulent times and the changing workplace

Today’s organizations face

continual change

Change refers to the adoption

of a new idea or behaviour by
an organization

Failure to change can lead to

failure

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 Why do people resist change?

Self- Interest?

People believe change conflicts with their self-interest. A proposed change

in job design, structure, or technology may increase employee’s workload
or cause a perceived loss of power, prestige, pay or other benefit.

The fear of personal loss is perhaps the biggest obstacle to

organizational change

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 Mini case: Uber vs. taxi industry

“Resistance of Taxi Industry to the introduction of UBER as competitor”.

The threat of losing market share and thus revenue, investments in taxi
licenses and potentially jobs, provided ample motivation for taxi drivers
and their associated union to pressure government to outlaw ride-sharing
operations in London

Now the riding share app has been legalized

Taxi industry was able to secure compensation from various

governments through an ‘industry adjustment assistance package’ to
help appease taxi drivers
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 Mini case: Qantas

Lack of Understanding and Trust

Employees often distrust the intentions of change and do not understand

the intended purpose

Qantas Alan Joyce – Enterprise Bargaining Agreement

To limit the conditions and clauses that the unions negotiate. It

turned out to be extremely complex.

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 Mini case: Qantas

Qantas, not being government managed, increasingly, to survive, has to

ensure the profitability.

The employees' resistance decreased as they understood that they depend

on each other to survive

Uncertainty provokes……..

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 Resistance to Change

Uncertainty

A lack of information about future events. It represents the fear of unknown

Employees do not know how the changes will affect them and worry if they
will be able to meet the demand of new technology or new procedure

Different Assessments and Goals

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 Different Assessments and Goals

Employees who will be affected by a change or innovation may assess the

situation differently from managers or promoters of a new idea

Managers in each department pursue different goals, and an innovation may

detract from performance and goal achievement for some departments

Example: Pfizer, top executives wanted to implement a computerized system

for collecting and processing research trial data, which could the cost by
40%, a legitimate reason to fear

Managers should not avoid but work to explain and communicate

clearly with employees

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 Disruptive Innovation

Forces outside sometimes forces managers to look for different solutions

and look for changes such as creating greater efficiencies in operations or
other alterations to keep the organization profitable

Other times, managers see within the company, a need for product or
service innovation

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 Definition: Disruption

Refers to innovations in products, services, or processes that radically change

an industry’s rules of the game for producers and consumers.

Companies that initiates the Disruptive Innovation becomes typically

successful whilst companies which are affected by a disruptive technology
might go out of business e.g. DVDs out of business

Digital cameras – eliminating the photographic industry, Kodak

Square – credit card reader disrupting trillion-dollar financial industry service

system for credit card payments and helped SMEs that could not afford
transaction fees.

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 The Innovators’ Solution

“…disruptive innovation is an innovation that creates a new market and value and disrupts an
existing market and value network, displacing existing market leading firms, products and
alliances”.

Examples:

Mini steel mills

Video streaming
Movie theatres
On line shopping
Tesla
3D printing
On line education

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 The Innovators’ Solution

But, are big dominant companies just fat and lazy? Are they driven out of business because
they are not innovating?

Normally they are innovating but the focus is wrong. They are trying to make their good
products better, and their better products excellent. So they are concentrating on past
products, rather than thinking differently and how they can dispose with the old product and
start differently.

Why does this happen? Because the really important people in the business often have an
emotional attachment to old products and cannot bring themselves to a situation where they
stop building them

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 The Innovators’ Solution

Refers to innovations that

radically change an
industry’s rules of the game
for producers and
consumers

Changes can be in:

1. Products
2. Services
3. Processes

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 Summary: What have you learned?

1. We have seen how disruptive innovation approach responses to the

forces that drive the market

2. Discussed and defined innovation and organizational change

3. Explained the value of cooperation, creativity, a bottom-up

approaches, internal contests, idea incubators, idea champions and
new-venture teams for innovation
4. Described the exploration activities which organizations can
undertake to ensure their products and technologies remain relevant

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