managing change & innovation 020914

39
Stephen Ong Stephen Ong BSc(Hons)Econs (LSE), MBA (Bradford) BSc(Hons)Econs (LSE), MBA (Bradford) Visiting Professor, Shenzhen University Visiting Professor, Shenzhen University Academic Fellow, Entrepreneurship & Innovation, Academic Fellow, Entrepreneurship & Innovation, The Lord Ashcroft International Business School, The Lord Ashcroft International Business School, Anglia Ruskin University Cambridge UK Anglia Ruskin University Cambridge UK BUSINESS ADMINISTRATION

Upload: stephen-ong

Post on 15-Jul-2015

208 views

Category:

Business


2 download

TRANSCRIPT

Stephen OngStephen OngBSc(Hons)Econs (LSE), MBA (Bradford)BSc(Hons)Econs (LSE), MBA (Bradford)

Visiting Professor, Shenzhen UniversityVisiting Professor, Shenzhen UniversityAcademic Fellow, Entrepreneurship & Innovation,Academic Fellow, Entrepreneurship & Innovation,

The Lord Ashcroft International Business School, The Lord Ashcroft International Business School, Anglia Ruskin University Cambridge UKAnglia Ruskin University Cambridge UK

BUSINESS ADMINISTRATION

1.1. To discuss the Forces for Change on To discuss the Forces for Change on businessbusiness

2.2. To understand Organizational Change To understand Organizational Change and the challenges of Managing and the challenges of Managing ChangeChange

3.3. To discuss Innovation and managing To discuss Innovation and managing its impact on businessits impact on business

6Source: bbc.co.uk 30th August 2005

Creative wins MP3 player patentCreative wins MP3 player patent

One of Apple's main r ivals, Creative Technology, One of Apple's main r ivals, Creative Technology, hashas

been awarded a patent in the US for the interfacebeen awarded a patent in the US for the interfaceused on many digital music players.used on many digital music players.

"The first portable media player based upon the user interface covered in our Zen Patent was our Nomad Jukebox MP3 player," said Creative CEO Sim Wong Hoo. "The Apple iPod was only announced in October 2001, 13 months after we had been shipping the Nomad Jukebox based upon the user interface covered by our

Zen Patent." In its press release, Creative said Apple had filed for a patent for a user interface in a multimedia player in late 2002, but its application had been recently rejected.

On 24 August 2006, Apple and Creative announced a broad settlement to end their legal disputes. Apple will pay Creative US$100 million for a paid-up license, to use Creative's awarded patent in all Apple products. As part of the agreement,

Apple will recoup part of its payment, if Creative is successful in licensing the patent. 

7

Automatic hierarchical categorization of music by Automatic hierarchical categorization of music by metadatametadata

Patent numberPatent number : 6928433: 6928433Fil ing dateFil ing date : Jan 5, 2001: Jan 5, 2001Issue dateIssue date : Aug 9, 2005: Aug 9, 2005

Application numberApplication number : : 9/755,7239/755,723

A method, performed by software executing on the processor of a portable music A method, performed by software executing on the processor of a portable music playback device, that automatically files tracks according to hierarchical structure playback device, that automatically files tracks according to hierarchical structure

of categories to organize tracks in a logical order. A user interface is utilized to of categories to organize tracks in a logical order. A user interface is utilized to change the hierarchy, view track names, and...change the hierarchy, view track names, and...InventorsInventors : Ron Goodman, Howard N. Egan: Ron Goodman, Howard N. Egan

AssigneeAssignee : Creative Technology LTD: Creative Technology LTD

Source: bbc.co.uk 30th August 2005

NASDAQ NASDAQ AAPLAAPL

Market Cap : Market Cap : US$308.8 BUS$308.8 B

PINK CREAFPINK CREAFMarket Cap : Market Cap : US$0.150 BUS$0.150 B

Organizational ChangeOrganizational ChangeAny alterations in the people, structure, or technology of Any alterations in the people, structure, or technology of

an organizationan organization

Characteristics of ChangeCharacteristics of Change Is constant yet varies in degree and directionIs constant yet varies in degree and directionProduces uncertainty yet is not completely unpredictableProduces uncertainty yet is not completely unpredictableCreates both threats and opportunitiesCreates both threats and opportunities

Managing change is an integral Managing change is an integral partpart

of every manager’s job.of every manager’s job.

External ForcesExternal Forces

MarketplaceMarketplace

Governmental Governmental laws and laws and regulationsregulations

TechnologyTechnology

Labour marketLabour market

Economic changesEconomic changes

Internal ForcesInternal Forces

Changes in Changes in organizational organizational strategystrategy

Workforce changesWorkforce changes

New equipmentNew equipment

Employee Employee attitudesattitudes

Lewin’s view on organisation changeUnfreezing the status quoChanging to a new stateRefreezing to make the change permanent

StructuralStructuralChanging an organization’s Changing an organization’s

structural components or its structural components or its structural designstructural design

TechnologicalTechnologicalAdopting new equipment, Adopting new equipment,

tools, or operating methods tools, or operating methods that displace old skills and that displace old skills and require new onesrequire new onesAutomation: replacing certain Automation: replacing certain

tasks done by people with tasks done by people with machinesmachines

ComputerizationComputerization

PeoplePeopleChanging attitudes, Changing attitudes,

expectations, expectations, perceptions, and perceptions, and behaviours of the behaviours of the workforceworkforce

Organizational Organizational development (OD)development (OD)Techniques or programs Techniques or programs

to change people and the to change people and the nature and quality of nature and quality of interpersonal work interpersonal work relationships.relationships.

1.1. Education and communicationEducation and communication

2.2. ParticipationParticipation

3.3. Facilitation and supportFacilitation and support

4.4. NegotiationNegotiation

5.5. Manipulation and co-optationManipulation and co-optation

6.6. Selecting people who accept changeSelecting people who accept change

7.7. CoercionCoercion

• Set the tone through management behaviour; top managers, Set the tone through management behaviour; top managers, particularly, need to be positive role models.particularly, need to be positive role models.

• Create new stories, symbols, and rituals to replace those currently in Create new stories, symbols, and rituals to replace those currently in use.use.

• Select, promote, and support employees who adopt the new values.Select, promote, and support employees who adopt the new values.

• Redesign socialization processes to align with the new values.Redesign socialization processes to align with the new values.

• To encourage acceptance of the new values, change the reward To encourage acceptance of the new values, change the reward system.system.

• Replace unwritten norms with clearly specified expectations.Replace unwritten norms with clearly specified expectations.

• Shake up current subcultures through job transfers, job rotation, Shake up current subcultures through job transfers, job rotation, and/or terminations.and/or terminations.

• Work to get consensus through employee participation and creating Work to get consensus through employee participation and creating a climate with a high level of trust.a climate with a high level of trust.

•Link the present Link the present and the future.and the future.

•Make learning a Make learning a way of life.way of life.

•Actively support Actively support and encourage and encourage day-to-day day-to-day improvements improvements and changes.and changes.

•Ensure diverse teams.Ensure diverse teams.

•Encourage mavericks.Encourage mavericks.

•Shelter breakthroughsShelter breakthroughs

• Integrate technology.Integrate technology.

•Build and deepen trust.Build and deepen trust.

“ “ Turning the Turning the outcomes of the outcomes of the creative process creative process

into useful into useful products, products,

services, or work services, or work methods.”methods.”

• Gillette ‘Mach 3’ razor is a first-to market productGillette ‘Mach 3’ razor is a first-to market product• Developed at a very high costDeveloped at a very high cost• A UK supermarket chain was quickly able to A UK supermarket chain was quickly able to

produce a good copy at a fraction of the original produce a good copy at a fraction of the original costcost

• Gillette have been more dependent therefore on Gillette have been more dependent therefore on expensive television advertising to protect sales of expensive television advertising to protect sales of their producttheir product

• When products are easy to copy, competitors can When products are easy to copy, competitors can ‘leapfrog’ original features and Wilkinson Sword ‘leapfrog’ original features and Wilkinson Sword Company have now introduced a 4 blade razorCompany have now introduced a 4 blade razor

Photos taken from www.gillette.com

Source: Source: “A Global Pulse of Innovation,” “A Global Pulse of Innovation,” BusinessWeekBusinessWeek, April 24, 2006, p. 74., April 24, 2006, p. 74.

Innovative Innovative firmfirm

Explanation for innovative Explanation for innovative capabilitycapability

Apple Apple Innovative chief executiveInnovative chief executiveGoogleGoogle Scientific freedom for employeesScientific freedom for employeesSamsungSamsung Speed of product developmentSpeed of product development

Procter & Procter & GambleGamble

Utilisation of external Utilisation of external sources of technologysources of technology

IBMIBM Share patents with collaboratorsShare patents with collaboratorsBMWBMW DesignDesign

StarbucksStarbucks In-depth understanding of In-depth understanding of customers and their culturescustomers and their cultures

ToyotaToyota Close co-operation with suppliersClose co-operation with suppliers

Joseph Schumpeter, The Theory of Economic Development Joseph Schumpeter, The Theory of Economic Development (1934)(1934)

1.1. The introduction of a good (product) which The introduction of a good (product) which is new to consumers, or one of higher is new to consumers, or one of higher quality than was available in the past;quality than was available in the past;

2.2. Methods of production, which are new to a Methods of production, which are new to a particular branch of industry;particular branch of industry;

3.3. The opening of new markets;The opening of new markets;

4.4. The use of new sources of supply;The use of new sources of supply;

5.5. New forms of competition, that leads to the New forms of competition, that leads to the restructuring of an industry.restructuring of an industry.

Joseph Schumpeter, The Theory of Economic Development Joseph Schumpeter, The Theory of Economic Development (1934)(1934)

1.1. The introduction of a good (product) which The introduction of a good (product) which is new to consumers, or one of higher is new to consumers, or one of higher quality than was available in the past;quality than was available in the past;

2.2. Methods of production, which are new to a Methods of production, which are new to a particular branch of industry;particular branch of industry;

3.3. The opening of new markets;The opening of new markets;

4.4. The use of new sources of supply;The use of new sources of supply;

5.5. New forms of competition, that leads to the New forms of competition, that leads to the restructuring of an industry.restructuring of an industry.

Michael Porter, The Competitive Advantage of NationsMichael Porter, The Competitive Advantage of Nations (1990) (1990)

1.1. “ … “ … to include both improvements in to include both improvements in technologytechnology

2.2. and better methods or ways of doing things. and better methods or ways of doing things.

3.3. It can be manifested in product changes,It can be manifested in product changes,

4.4. process changes, process changes,

5.5. new approaches to marketing, new approaches to marketing,

6.6. new forms of distribution, and new forms of distribution, and

7.7. new concepts of scope … new concepts of scope … [innovation] results as much from [innovation] results as much from

organizational learning as from formal R&D.”organizational learning as from formal R&D.”

Michael Porter, The Competitive Advantage of NationsMichael Porter, The Competitive Advantage of Nations (1990) (1990)

1.1. “ … “ … to include both improvements in to include both improvements in technologytechnology

2.2. and better methods or ways of doing things. and better methods or ways of doing things.

3.3. It can be manifested in product changes,It can be manifested in product changes,

4.4. process changes, process changes,

5.5. new approaches to marketing, new approaches to marketing,

6.6. new forms of distribution, and new forms of distribution, and

7.7. new concepts of scope … new concepts of scope … [innovation] results as much from [innovation] results as much from

organizational learning as from formal R&D.”organizational learning as from formal R&D.”

25

• Innovation = theoretical conception + technical Innovation = theoretical conception + technical invention + commercial exploitationinvention + commercial exploitation

• Innovation management involves change, Innovation management involves change, particularly technological changeparticularly technological change

• Innovation management is not exclusivelyInnovation management is not exclusivelyassociated with products. New ways of doing associated with products. New ways of doing business in service sector. Sometimes this business in service sector. Sometimes this involves product, service and process changes. involves product, service and process changes.

The level of change is an important The level of change is an important dimensiondimension

Key Concept : InnovationKey Concept : InnovationKey Concept : InnovationKey Concept : Innovation

26

• Technological advancesTechnological advances• Changing customers & needsChanging customers & needs• Intensified competitionIntensified competition• Changing business environmentChanging business environment

Innovation DriversInnovation DriversInnovation DriversInnovation Drivers

• Pfizer’s Sildenfil – aka Pfizer’s Sildenfil – aka Viagra: the fastest selling Viagra: the fastest selling human drughuman drug

• Gore Associates’ Gore-Gore Associates’ Gore-Tex: the versatile polymer Tex: the versatile polymer polytetrafluoroethylene (PTFE) polytetrafluoroethylene (PTFE)

• Dyson’s vacuum Dyson’s vacuum cleaner: cleaner: Revolutionised a Revolutionised a very stable mature very stable mature industryindustry

27

• Enterprise Resource Planning Enterprise Resource Planning (ERP) business software; (ERP) business software; virtually all large firms have virtually all large firms have installed it. installed it.

• SAP, Oracle, Baan and SAP, Oracle, Baan and PeopleSoft. PeopleSoft.

• SAP has over 20,000 products SAP has over 20,000 products installed worldwide and Oracle installed worldwide and Oracle has installed databases in has installed databases in nearly every one of the world’s nearly every one of the world’s top 500 companies.top 500 companies.

• Moreover, it has Moreover, it has changed the way they changed the way they workwork (Gartner, 2002).(Gartner, 2002).

• World’s fifth largest retailer World’s fifth largest retailer joined forces with Intel and joined forces with Intel and SAP to build a fully working SAP to build a fully working ‘prototype’ supermarket‘prototype’ supermarket

• RFID ‘smart-tag technology’ RFID ‘smart-tag technology’ used on all productsused on all products

• Shopping trolleys have touch Shopping trolleys have touch screen computers and screen computers and scannersscanners

• Smart tags cost 0.5 Euros each Smart tags cost 0.5 Euros each and are currently too and are currently too expensive for every item in expensive for every item in every supermarketevery supermarket

Type of innovationType of innovation ExampleExampleProduct innovationProduct innovation The development of a new or improved productThe development of a new or improved productProcess innovationProcess innovation The development of a new manufacturing The development of a new manufacturing

process such as Pilkington’s float glass processprocess such as Pilkington’s float glass processOrganisational innovationOrganisational innovation A new venture division, a new internal A new venture division, a new internal

communication system; communication system; Management innovationManagement innovation TQM (total quality management) systems, BPR TQM (total quality management) systems, BPR

(business process re-engineering); (business process re-engineering); introduction introduction of SAPR3of SAPR3Production innovationsProduction innovations Quality circles, JIT manufacturing system, new Quality circles, JIT manufacturing system, new

production planning software, e.g. MRP II, production planning software, e.g. MRP II, new new

inspection systeminspection systemCommercial/Commercial/marketing innovationsmarketing innovations New financing arrangements, new sales New financing arrangements, new sales

approach, e.g. direct marketingapproach, e.g. direct marketingService innovationsService innovations e-commerce auction eBay; Internet banking, etc. e-commerce auction eBay; Internet banking, etc.

EXTERNAL INPUTS:societal needs;competitors;supplier partnerships;distributors;customers;strategic alliances.

EXTERNAL INPUTS:scientific and technological development;competitors;suppliers;customers;university departments.

Organisation and Organisation and business strategy business strategy

Mar

ketin

g

Mar

ketin

g

EXTERNAL INPUTS:macro factorsROIcosts;competition.

Organisation’s Organisation’s knowledge base knowledge base

accumulates accumulates knowledgeknowledge

overover timetime

Research and technology

Research and technology

Innovation Innovation Management Management frameworkframework

New productsSourceSource: Trott, 2005: Trott, 2005

• Voted world’s best airline in Voted world’s best airline in surveys by travel magazinessurveys by travel magazines

• First-to-market First-to-market strategy for many strategy for many yearsyears

• More modern aircraft offering:More modern aircraft offering:– larger than average seatinglarger than average seating– first in-flight phones and faxesfirst in-flight phones and faxes– Led in the introduction of Led in the introduction of

electronic ticketselectronic tickets– Flexible for flight confirmations Flexible for flight confirmations

by phone, fax or emailby phone, fax or email• Staff receive longer and more Staff receive longer and more

detailed training detailed training – Visit senior citizens’ homesVisit senior citizens’ homes

1.1. Market-based view of innovation :Market-based view of innovation :market conditions provide the context which facilitates or constrains the extent of the firm’s innovation activity (Slater & Narver, 1994; Porter, 1980, 1985).

2.2. Resource-based view of the firm : Resource-based view of the firm : a firm’s own resources provide a much more stable context in which to develop its innovation activity, and to shape its markets in accordance to its own view (Tidd et al., 2001; Shavinina, L.V. (ed.) (2003); Patel, P. and Pavitt, K. 2000).

3.3. SerendipitySerendipityInnovation is all due to luck and good fortune

► BackgroundBackground““NTT DoCoMo Japan – partnerships for innovation”NTT DoCoMo Japan – partnerships for innovation”Goffin,K. & Mitchell, R. Goffin,K. & Mitchell, R.

(2005) (2005) Innovation Management – Strategy and implementation using the Innovation Management – Strategy and implementation using the pentathlon frameworkpentathlon framework. Palgrave Macmillan. Palgrave Macmillan

Group DiscussionGroup Discussion 30 mins discussion in Groups of 730 mins discussion in Groups of 7 5 mins presentation by Group representative5 mins presentation by Group representative

► Individual AssignmentIndividual Assignment Individual coursework (contributes to 15% overall mark of course)Individual coursework (contributes to 15% overall mark of course) 2 pages written in English in WORD format2 pages written in English in WORD format

► SummarySummary► Issues discussedIssues discussed► Solutions proposedSolutions proposed

34

35

• How can partnerships and alliances help a company in the How can partnerships and alliances help a company in the service sector achieve its innovation strategy?service sector achieve its innovation strategy?

• How can service and product strategies of different companies How can service and product strategies of different companies be aligned to target specific customers segments?be aligned to target specific customers segments?

• How can a service provider make it harder for competitors to How can a service provider make it harder for competitors to copy innovations?copy innovations?

36

PlatformPlatformVendorsVendors

ContentContentProvidersProviders

HandsetHandsetVendorsVendors

NTTDoCoMo

Inter-Operability Inter-Operability

Co-marketing Co-marketing

Business Opportunity

Portal Functionality

ContentHandsets

Volume Opportunity

Revenue Collection

Content / Handset Integration

i-modeCollaborationConceptv2.ppt

““Innovation : the successful Innovation : the successful implementation of implementation of novel novel and appropriate ideasand appropriate ideas within an organisation.” 3Mwithin an organisation.” 3M

37

Robbins S.P. & Coulter M.(2007) Management(9th edition) Pearson.

Trott,P. (2008). Innovation management and new product development, (4th edition). FT Prentice Hall.

Goffin,K. & Mitchell, R. (2005) Innovation Management – Strategy and implementation using the pentathlon framework. Palgrave Macmillan

Nonaka,I. & Takeuchi, H. (1995). The Knowledge-Creating Company. Oxford University Press.

Chesbrough, H. (2006). Open Innovation – The new imperative for creating and profiting from technology. Harvard Business School Press

38