MANAGING CHANGE AND INNOVATION BU5559 SUBMITTED BY EZIE, CYNTHIA C. SUBMISSION DATE22 MARCH 2010 INTRODUCTION TO INNOVATION AND CHANGE Innovation is the process by which ideas are created, selected and implemented to bring about profitable change to organisations. Innovations come as a result of an identified need for organisations to change their current processes, activities or operations. Andriopoulos and Dawson (2009) explain that organisational change is ‘new ways of organizing and working’.
They explain that change occur in two dimensions – movement of state and scope of change. Bessant and Tidd (2007) are of the opinion that innovation is the translation of conceptualised ideas into commercially profitable products and services. They also go ahead to say that innovation helps firms differentiate their products and services from competitors and this makes them twice more likely to become more profitable. The ability of organisations to apply and develop innovative capabilities enable them achieve and maintain sustainable advantage.
Certain factors promote innovative environments which can improve performance and profitability of organisations, some of which are: ? The firm’s source of innovative ideas and capabilities which may be internal or external as well as advances in technology within the industry ? The structure and hierarchy of the organisation to deal with innovative changes ? The size of the organisation and the level of risk they are willing to take ? Organisational growth and market globalisation ? The level of employee education and exposure to change ?
Environmental factors such as economic and political situations The following is an explanation to the reasons why firms adopt innovations, how the selection and implementation of innovation can work successfully within a given context and not in another. It also explains the difficulties associated with successful implementation of change. REASON FOR CHANGE AND INNOVATION Because of the inevitable changing characteristics of the business environment, organisations need to find creative and adaptive ways to successfully manage change to maintain a strong business position in their industry.
The decision to adopt change is often to improve operation performance and/or reduce cost associated with doing business. Dawson (2009) explains that change is important to organisations as they help improve performance and productivity. However, it is also necessary to recognise that there are different types and levels in order to properly implement change. The duty of organisations is to identify the need for change, involve all affected stakeholders and manage such change effectively to keep the organisation dynamic. THE INNOVATION PROCESS The process of innovation begins with creativity.
The search for new and applicable ideas may generate from within or outside the organisation which is then followed by selection. Selection involves the choice of appropriate ideas and concepts to implement. Implementation stage is the transformation of the selected ideas into new products which is then followed by a launch into the market and subsequent capture of accrued benefits. In selecting and implementing innovations, organisations need to understand that there are different contexts, situations and factors which can affect successful implementation.
Desouza, et al (2009) show how robust and dynamic organisations such as GE and Whirlpool are better able to deal with innovation than closed and rigid organisations. They explain that because these organisations have defined innovation processes and clear cut protocols for the evaluation and screening of ideas such organisations are able to create sustainable innovative programs because they possess a common framework for the management of ideas from conception to commercialization through management support and participation of employees, customers and suppliers.
This attitude helped build and foster an innovative culture for these organisations. Sustainable innovations can be achieved through proper management rather than through happenstance or chance management of innovations. Robust organisations can therefore plan and take advantage of innovation opportunities and also recover from mistakes and failures quickly and with minimal damage. Using the Pirelli Cables Study, the organisation selected Total Quality Management (TQM) to help solve ongoing operational problems, such as staff turnover, quality problems and also develop customer and employee relationship.
Different rates of success were witnessed in the three plants where TQM was implemented due to the nature of their context and structure. The introduction of TQM in the Minto Plant was developed based on the formation and use of teams which they felt was important. The importance of teams in innovation implementation is also explained by the work of West, et al (2004) who propose that it is the implementation of ideas rather than their development that is crucial for enabling organizational change and this can be achieved by working through teams.
They go further to explain that in order to effectively mange change it is important to understand how to develop such teams TQM was met by some resistance especially from line managers and supervisors. This was because the importance and aim of TQM was not clearly communicated to the supervisors and also, they were not involved in the TQM approach. The implementation of TQM was successful but this was not enough as it did not recognise or reward staff for their contribution which made them feel unappreciated and unmotivated thereby reducing productivity.
TQM implementation in the Cable Processing Plant (CPP) in South Australia was more successful because there were clear channels of communication about the aims and importance of its objectives. The correction of the mistakes of the team in Minto also contributed to the success of its implementation. Although the idea of TQM in the Cable Manufacturing Plant (CMP) in South Australia was welcomed there were many criticisms due to internal and external contexts to its implementation.
One of the main criticisms was that while there was so much talk going on, no one was really doing anything or implementing suggestions brought up be employees especially by shop-floor operators. There was also the problem of the incompetencies of supervisors and their lack of detailed knowledge of the machines being operated which increased antagonistic feelings of operators towards supervisors. Pirelli recognised the advantages TQM would give its operations if properly employed.
Their inability to appreciate the different contexts under which each plant operated did not guarantee the same rates of success. The contexts included the different cultures and histories in the plants, the relationships between employees and management, issues of gender and ethnicity as well as the work environments and labour composition. For organisations to properly select and implement innovations, a proper understanding of their core competencies, resources and structures will help them match their organisation objectives and identify associated impracticalities and possibilities to implementation.
When organisations clearly communicate the aims and objectives of a change and involve people to actively participate in its implementation, people become more dedicated to its implementation. The works of Hearn and Ninian (2003), Riddle (2000) and West et al (2004) show that when people are involved and participate in the innovation process, there are higher chances for its success during implementation Riddle, D. (2000) illustrates that when all staff are actively involved and develop an innovative mindset, the impediment to innovation will be reduced. DIFFICULTIES TO IMPLEMENTING INNOVATIONS
Because change often brings about uncertainties and risks, certain stakeholders within the change environment may be against it even when there are obvious positive attributes to such change. An example can be seen in the LCD project by GKN. The LCD had wide range of industry applications and even positively enhanced the gearbox qualities of vehicles, but management were not fully convinced and did not give their support. All organisations deal with people. In many organisations there is a wide mix of cultural and geographical backgrounds of people who will not always agree on certain issues, one of which is change.
However, people are the most important tools to effect change and unless they are properly managed to understand and accept it, nothing can move forward. These people can include investors, suppliers, customers, distributors and employees. Communication at all levels can help address the resistance to change. Riddle (2000) is of the opinion that the greatest barrier to innovation is people’s fears An example of a successful innovation implementation process can be cited from members of the British Rail and their Unions.
The Unions in particular were won over by the new computerisation process, not because of its enhanced capabilities but by the fact that their fears had being allayed by management and were involved from the beginning in understanding the need for the innovation. Ragatz, G. L. , et al. (1997) identified that for companies to improve their operations there is a need to integrate suppliers during implementation. However there are the problems of sharing propriety information between organisations and their suppliers as well as the not-invented-here syndrome.
These contribute to the problems associated with innovation implementation and can be addressed by good relationship structuring which include sharing education and training, formal trust development processes, formalized risk/reward sharing agreements, joint agreement on performance measurements, top management commitment from both companies, and confidence in the supplier’s capabilities. The success of change often begins with a unified identification on the need for change rather than a forced, unparticipative approach with a misconception of what the change truly represents.
The success also depends on effective communication channels to resolve the misconceptions. SUMMARY In conclusion, the decision to select and implement innovation is affected by the structure and make-up of the organisation. Given that the implementation of an innovation in one organisation was successful does not necessarily mean that it will work in another organisation, or as seen from the Pirelli study, another structure of the same organisation. It is also important that the right people are involved and encouraged to participate during the implementation of the innovation to increase its chances of success.
This involvement of people will foster relationship and communication so that people do not feel they are left out or left behind. REFERENCES Bessant, J. and Tidd, J. (2007) Innovation and Entreprenuership. Chichester: John Wiley Dawson, P. (2003) Reshaping change: A processual approach. London: Routledge Dawson, P. , (2009) Making change matter. Public Sector Executive, Mar/Apr pp 30- 32 Desouza, K. C. , et al (2009) Crafting Organizational innovation processes. Innovation: Management, Policy and Practice 11 (1) pp 7- 36 Hearn, G. and Ninan, A. , (2003) Managing change is managing meaning.
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