Chapter 7. Managing Change and Innovation

I.                    The Change Process

1.       Two Views of the Change Process

a.       The Calm Water Metaphor

                Lewin’s three-step process (Unfreezing – The status quo, Changing – To a new state, Refreezing – To make the change permanent) treats change as a move away from the organization’s current equilibrium state.

b.       White-Water Rapids Metaphor

                The stability and predictability of the calm waters metaphor don’t exist. Disruptions in the status quo are not occasional and temporary, and they are not followed by a return to calm waters. Many managers never get out of the rapids.

II.                  Types of Organizational Change

1.       What Is Organizational Change?

        Organizational change is any alteration of people, structure, or technology. Organizational changes often need someone to act as a catalyst and assume the responsibility for managing the change process—that is, a change agent.

2.       Types of Change

a.       Changing Structure

                Changes in the external environment or in organizational strategies often lead to changes in the organizational structure. Because an organization’s structure is defined by how work gets done and who does it, managers can alter one or both of these structural components.

b.       Changing Technology

                Technological changes usually involve the introduction of new equipment, tools, or methods; automation; or computerization.

c.       Changing People

                Changing people involves changing attitudes, expectations, perceptions, and behaviors—something that’s not easy to do. Organizational Development (OD) is the term used to describe change methods that focus on people and the nature and quality of interpersonal work relationships.

III.                Managing Resistance to Change

1.       Why Do People Resist Change?

·         Replaces the known with uncertainty.

·         We do things out of habit.

·         The fear of losing something already possessed.

·         A person’s belief that the change is incompatible with the goals and interests of the organization.

2.       Techniques for Reducing Resistance to Change

        When managers see resistance to change as dysfunctional, what can they do? Several

strategies have been suggested in dealing with resistance to change. These approaches

include education and communication, participation, facilitation and support, negotiation, manipulation and co-optation, and coercion.

IV.                Contemporary Issues in Managing Change

1.       Changing Organizational Culture

        The fact that an organization’s culture is made up of relatively stable and permanent characteristics tends to make it very resistant to change. A culture takes a long

time to form, and once established it tends to become entrenched.

a.       Understanding the Situational Factors

                What “favorable conditions” facilitate cultural change? A dramatic crisis occurs, leadership changes hands, the organization is young and small, the culture is weak.

b.       Making Changes in Culture

                Managers need a strategy for managing cultural change.

2.       Employee Stress

a.       What is Stress?

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

for potential stress to become actual stress. First, there must be uncertainty over the

outcome, and second, the outcome must be important.

b.       What Causes Stress?

                Stress can be caused by personal factors and by job-related factors called stressors. Five categories of organizational stressors:

-          Task demands are factors related to an employee’s job.

-          Role demands relate to pressures placed on an employee as a function of the particular role he or she plays in the organization.

o   Role conflicts create expectations that may be hard to reconcile or satisfy.

o   Role overload is experienced when the employee is expected to do more than time permits.

o   Role ambiguity is created when role expectations are not clearly understood and the employee is not sure what he or she is to do.

-          Interpersonal demands are pressures created by other employees.

-          Organization structure, excessive rules and an employee’s lack of opportunity to participate in decisions.

-          Organizational leadership represents the supervisory style of the organization’s managers.

        The most commonly used labels for these personality traits:

-          Type A personality is characterized by chronic feelings of a sense of time urgency, an excessive competitive drive, and difficulty accepting and enjoying leisure time.

-          Type B personality is  people who are relaxed and easygoing and accept change easily.

c.       What Are the Symptoms of Change?
                Stress symptoms can be grouped under three general categories: physical, psychological, and behavioral. All of these can significantly affect an employee’s work.

d.       How Can Stress Be Reduced?

Through controlling certain organizational factors to reduce job-related stress, and to a more limited extent, offering help for personal stress.

3.       Making Change Happen Succesfully

        They can (1) make the organization change capable, (2) understand their own role in the process, and (3) give individual employees a role in the change process.

V.                  Stimulating Innovation

1.       Creativity Versus Innovation

-          Creativity is the ability to combine ideas in a unique way or to make unusual associations between ideas. A creative organization develops unique ways of working or

-          Innovation is the outcomes of the creative process need to be turned into useful products or work methods.

2.       Stimulating and Nurturing Innovation

        Getting the desired outputs (innovative products and work methods) involves transforming inputs. These inputs include creative people and groups within the organization.

3.       Structural Variables

        An organization’s structure can have a huge impact on innovativeness. Research into the effect of structural variables on innovation shows five things:

·         An organic-type structure positively influences innovation.

·         The availability of plentiful resources provides a key building block for innovation.

·         Frequent communication between organizational units helps break down barriers to innovation.

·         Innovative organizations try to minimize extreme time pressures on creative activities despite the demands of white-water rapids environments.

·         Studies have shown that an employee’s creative performance was enhanced when an organization’s structure explicitly supported creativity.

a.       Cultural Variables

An innovative organization is likely to have the following characteristics.

o   Accept ambiguity – too much emphasis on objectivity and specificity constrains creativity.

o   Tolerate the impractical – what at first seems impractical might lead to innovative solutions.

o   Keep external controls minimal – rules, regulations, policies, and similar organizational controls are kept to a minimum.

o   Tolerate risk – employees are encouraged to experiment without fear of consequences should they fail.

o   Tolerate conflict – diversity of opinions is encouraged.

o   Focus on ends rather than means - goals are made clear, and individuals are encouraged to consider alternative routes toward meeting the goals.

o   Use an open-system focus – managers closely monitor the environment and respond to changes as they occur.

o   Provide positive feedback – managers provide positive feedback, encouragement, and support so employees feel that their creative ideas receive attention.

o   Exhibit empowering leadership - be a leader who lets organizational members know that the work they do is significant.

b.       Human Resource Variables

Idea champion is individual who actively and enthusiastically supports new ideas, builds support, overcomes resistance, and ensures that innovations are implemented.

4.       Innovation and Design Thinking

        A strong connection exists between design thinking and innovation. Design thinking can provide a process for coming up with things that don’t exist. When a business approaches innovation with a design-thinking mentality, the emphasis is on getting a deeper understanding of what customers need and want. It entails knowing customers as real people with real problems.