PoM Organisational Change and Innovation PDF

Organisational Change and Innovation Principles of Management Prof. Dr. Andreas Hinz 20 November, 2024 www.fhnw.ch/wirtschaft Organisational change: AI-assisted bank account set-up 0...

Organisational Change and Innovation Principles of Management Prof. Dr. Andreas Hinz 20 November, 2024 www.fhnw.ch/wirtschaft Organisational change: AI-assisted bank account set-up 0 Employees 15’000 20’000 1sec x466 Application check time 2min Application 700’000’000 3’000’000 Source: Swisscom 20 November 2024 International Management www.fhnw.ch/business 2 Organisational change galore Source: https://www.ft.com/ 20 November 2024 International Management www.fhnw.ch/business 3 Organisational change: Looking out for the invisible Organisational change: Movement of an organisation away from its present state toward some desired future state 20 November 2024 International Management www.fhnw.ch/business 4 Content structured along learning objectives 10-1 Discuss what managers should know about organizational change. 10-2 Discuss three forms of change, Lewin’s change model, and the systems approach to change. 10-3 Describe the purpose of organizational development. 10-4 Describe the approaches toward innovation and components of an innovation system. 10-5 Discuss ways managers can help employees overcome fear of change. 10-6 Review the different ways to increase the career readiness competency of openness to change. 20 November 2024 International Management www.fhnw.ch/business 5 10-1 Discuss what managers should know about organizational change. Fundamental Change: What Will You Be Called On to Deal With? Two Types of Change: Reactive and Proactive The Forces for Change Outside and Inside the Organization 20 November 2024 International Management www.fhnw.ch/business 6 Fundamental change: What will you be called on to deal with? The marketplace is becoming more segmented and moving toward more niche products. More competitors are offering targeted products, requiring faster speed-to-market. Some traditional companies may not survive radical change. Offshore suppliers are changing the way we work. Knowledge, not information, is becoming the new competitive advantage. 20 November 2024 International Management www.fhnw.ch/business 7 Two types of change: Reactive and proactive Reactive Change Responding to Unanticipated Problems and Opportunities Proactive Change Managing Anticipated Problems and Opportunities 20 November 2024 International Management www.fhnw.ch/business 8 Internal and external forces for change 20 November 2024 International Management www.fhnw.ch/business 9  Strategies Iceberg Model: Tasks Objectives Check what Measurement lies beneath the surface Resources Skills Knowledge Networks Processes Values Rules Meaning 20 November 2024 International Management www.fhnw.ch/business 10 10-2 Discuss three forms of change, Lewin’s change model, and the systems approach to change. Three Forms of Change: From Least Threatening to Most Threatening Lewin’s Change Model: Unfreezing, Changing, and Refreezing A Systems Approach to Change 20 November 2024 International Management www.fhnw.ch/business 11 Three forms of change: From least threatening to most threatening Somewhat Very Threatening: Least Threatening: Threatening: Radically Adaptive Change Innovative Change Innovative Change “This Is “This Is a “We’ve Seen Something Brand-New Stuff Like This New for This Thing in Our Before.” Company.” Industry.” 20 November 2024 International Management www.fhnw.ch/business 12 Lewin’s change model: Unfreezing, changing, and refreezing 20 November 2024 International Management www.fhnw.ch/business 13 A system approach to change 20 November 2024 International Management www.fhnw.ch/business 14 Discussion on system approach to change: Think of a change in your job / work environment Reasons for change / input? Which target elements of change? Which goals of change / output? 20 November 2024 International Management www.fhnw.ch/business 15 10-3 Describe the purpose of organizational development. What Can Organizational Development Be Used For? How Organizational Development Works. The Effectiveness of Organizational Development 20 November 2024 International Management www.fhnw.ch/business 16 What can Organizational Development (OD) Be Used For? Improving Individual, Team, Revitalizing Adapting to and Organizational Organizations Mergers Performance 20 November 2024 International Management www.fhnw.ch/business 17 How OD Works Organizational Development Process 20 November 2024 International Management www.fhnw.ch/business 18 The Effectiveness of OD Use multiple Use goals wisely Understand Ensure interventions (geared to short- impact of and on management (e.g., goal setting, and long-term organisational support training, rewards) results) culture 20 November 2024 International Management www.fhnw.ch/business 19 Connecting the dots: From the need for change to innovation Organisational change is often achieved through innovation Source: Jones and George (2021) 20 November 2024 International Management www.fhnw.ch/business 20 10-4 Describe the approaches toward innovation and components of an innovation system. Approaches to Innovation An Innovation System: The Supporting Forces for Innovation 20 November 2024 International Management www.fhnw.ch/business 21 Approaches to innovation Type of Innovation Focus of Innovation 20 November 2024 International Management www.fhnw.ch/business 22 Approaches to innovation 20 November 2024 International Management www.fhnw.ch/business 23 Focus of innovation: Consider incremental and radical innovation RADICAL INCREMENTAL 20 November 2024 International Management www.fhnw.ch/business 24 S-Curve: At some point something new is needed Biology-based drug development Chemistry-based drug development Source: Adapted from MIT Sloan School of Management 20 November 2024 International Management www.fhnw.ch/business 25 An innovation system: The supporting forces for innovation 20 November 2024 International Management www.fhnw.ch/business 26 10-5 Discuss ways managers can help employees overcome fear of change. The Causes of Resistance to Change Ten Reasons Employees Resist Change 20 November 2024 International Management www.fhnw.ch/business 27 The causes of resistance to change 20 November 2024 International Management www.fhnw.ch/business 28 Ten reasons employees resist to change Individuals’ Surprise and Climate of predisposition fear of the Fear of failure mistrust toward change unknown Disruption of Loss of status or cultural traditions Personality Peer pressure job security or group conflicts relationships Lack of tact or Non-reinforcing poor timing reward systems 20 November 2024 International Management www.fhnw.ch/business 29 10-6 Review the different ways to increase the career readiness competency of openness to change. 20 November 2024 International Management www.fhnw.ch/business 30 Summary / Any questions? 10-1 Discuss what managers should know about organizational change. 10-2 Discuss three forms of change, Lewin’s change model, and the systems approach to change. 10-3 Describe the purpose of organizational development. 10-4 Describe the approaches toward innovation and components of an innovation system. 10-5 Discuss ways managers can help employees overcome fear of change. 10-6 Review the different ways to increase the career readiness competency of openness to change. 20 November 2024 International Management www.fhnw.ch/business 31 References Core reference unless indicated otherwise: Kinicki, A.; Breaux Soignet, D.; Hartnell, C. (2024): Management - A practical introduction, McGraw Hill. 20 November 2024 International Management www.fhnw.ch/business 32 Appendix 20 November 2024 International Management www.fhnw.ch/business 33 Group case study: Overcoming resistance to change in the case of a merger You were recently promoted to be a manager at TechFarm. TechFarm is a company that outsources customer service employees to organizations in many different industries. The company’s main focus is tech companies. Recently, Synergy Outsourcing, a larger, more established firm purchased TechFarm, and now you are a manager in the midst of a merger. Because Synergy is in the same business as TechFarm, TechFarm’s employees haven’t had to relearn their positions. Some training will be needed, however: Synergy’s telephone technology and the way it handles customers is different than TechFarm’s. TechFarm knew about the merger six months before it occurred and has had the time to adjust. As a manager, you have the basic information about the merger and try to help employees adjust. You don’t, however, have any information about Synergy’s plans to change TechFarm’s name or whether or not TechFarm will develop a new clientele and focus. You also don’t have any information about how Synergy rewards its employees or any of the information about Synergy’s benefits. Unfortunately, this is the information your employees are most interested in learning about. The change has gone more smoothly than expected, but three of your employees are having trouble adjusting. Janet, a TechFarm employee of five years has begun skipping work at least once a week, and you caught her with the employment classifieds at her desk. Janet tells you she still wants to be a TechFarm employee, but her absenteeism is beginning to worry you. She is not the only employee missing work. On three occasions several of the employees in Janet’s work area were absent the same day Janet called in sick. You know they are social friends as well as work colleagues. Janet is one of the employees most interested in the new bonus structure and benefits package. 20 November 2024 International Management www.fhnw.ch/business 34 Group case study: Overcoming resistance to change Phil is another employee having difficulty adjusting. Recently, three of Phil’s colleagues barged into your office and asked, “Is it true that Synergy is going to lay off everyone but management?” As far as you know, Synergy plans on keeping the TechFarm workforce intact, and you told them as much. These employees confirmed that Phil was spreading that information. Phil hasn’t been missing work, but his productivity has significantly reduced. He asked you last week whether or not Synergy wanted to “dump more work” on the TechFarm employees. You’ve also noticed that every time someone new is promoted into management or is moved to a different work team, he begins to worry about layoffs. You face a unique issue with Roberto. Roberto has worked at TechFarm for three years. After learning about the merger, Roberto began taking only the Spanish-speaking calls. Because these calls make up a small percentage of TechFarm’s call volume, he has a lot of time to browse the Internet and takes more breaks than any of your other employees. TechFarm’s HR department decided that Roberto should be promoted to a position titled “Supervisor in Charge of Bilingual Communication.” Roberto received a pay increase as well. You informed HR and Roberto that Synergy does not handle a significant bilingual call volume, but he continues to focus on the bilingual calls, leaving more work for everyone else. Other employees are complaining about Roberto. 20 November 2024 International Management www.fhnw.ch/business 35 Group case study: Overcoming resistance to change Questions for discussion 1. Why are Janet, Phil, and Roberto resisting change? Explain. 2. What would you do at this point to overcome resistance from these three employees? 3. To what extent has TechFarm used both Lewin and Kotter’s models of organizational change? 4. Assume that you just learned about the merger. How would you go about using the OD process at the beginning of the merger to implement change? Be specific. 5. What did you learn about resistance to change from this exercise? 20 November 2024 International Management www.fhnw.ch/business 36 An innovation system: The supporting forces for innovation Foster an Create an Commitment Required Innovative Innovation from Senior Structure and Culture and Strategy Leaders Processes Climate Human Resource Develop the Policies, Appropriate Necessary Practices, and Resources Human Capital Procedures 20 November 2024 International Management www.fhnw.ch/business 37 Lewin’s Force-Field Analysis: Which Forces Facilitate Change and Which Resist It? Source: Jones and George (2021) 20 November 2024 International Management www.fhnw.ch/business 38