Innovation and Change

Connecting Your Learning Are continuous innovation and change management the key differences between highly successful organizations and other companies? Do those organizations that are innovative and receptive to change have common elements among them? The lesson offers information about two key topics: innovation and change. You will also learn why innovation and change are critical elements for organizational success. Readings, Resources, and Assignments Required Textbook Readings Chapter 7: "Innovation and Change" Multimedia Resources Textbook CourseMate Web site Required Assignments Essay Case Study Check Prior Knowledge How much do you already know about the concepts you will cover in this lesson? The following questions will focus your attention on the information in the lesson. Answering these questions will prepare you for the lesson instruction and the graded assessments. You are strongly encouraged to complete this section, although you are not required to submit the responses to your instructor. Are innovative and change strategies limited only to large organizations? Why or why not? Are innovation and change management a local or global phenomenon? Does innovation always result in a company's having more economic success? See what you know about leading change by reading "10 Principles of Leading Change Management." Focusing Your Learning Official Course Competencies Identify the roles and responsibilities of managers and analyze the changing management process. Lesson Objectives By the end of this lesson, you should be able to: Explain why innovation is important to companies. Identify various methods managers can use to effectively lead innovation in their organizations. Recognize why not changing can lead to organizational decline. Identify methods managers can use to more effectively manage change as it occurs. Key Terms As you read your assignment for this lesson, pay close attention to the key terms and phrases PDF that are listed throughout the chapter. These terms and concepts are important to your understanding of the information provided in the lesson. Approaching the Objectives Innovation and change are related, and defining innovation is necessary to understand this relationship. With respect to business, innovation can be defined as the way an organization introduces new thoughts, methods of work, and even new products or services. Innovation differs from invention or creating a new idea, which may or may not add value to the organization's bottom line. Innovation within business includes a variety of aspects. However, innovation cannot be realized unless an organization develops a culture of innovation. Innovation occurs when employees at all levels are involved. To review how to develop a culture of innovation, read "6 Ways to Create a Culture of Innovation." Possible aspects of innovation within the business world are reviewed below. Product and Service Innovation – This can be described as a tangible or visible change to the final product or service of an organization. An example could be an enhanced type of fuel an oil company creates due to ongoing research and development efforts (Snell & Bateman, 2012). Process Innovation – This can be described as a change in the way goods or services are produced. Examples of process innovation are concurrent engineering (manufacturing processes used in the auto industry) and just-in-time (JIT). Business Model Innovation – This refers to an overall and drastic change in the way an organization creates and delivers its products and services. This type of change may affect all aspects of a company's business model. At times, this can even impact the industry as a whole. Examples of business model innovation include Amazon (book selling), Netflix (video rental), and NetJets (business travel) (Snell & Bateman, 2012). In today's global world, continuous and consistent innovation is almost a prerequisite for an organization's success. A bigger question is why some companies are more innovative and economically successful than others. For example, why are the companies 3M, Merck, Hewlett-Packard, and Rubbermaid more innovative than their counterparts? What sets these companies apart? One common factor among all four companies is a participative organizational culture, the type of culture that encourages innovation and change. Another common factor among highly innovative organizations is the ability to reduce bureaucracy and permit failure during innovation attempts. Example A great example of permitting failure while encouraging innovation is Frank G. Okie. Okie was a legendary inventor working for 3M who thought of using sandpaper instead of razor blades for shaving. He aimed to reduce the risk of nicks and avoid sharp instruments. Obviously, the idea failed; however, rather than being punished for his failure, Okie was encouraged to champion other ideas that included 3M's first blockbuster success: waterproof sandpaper. Read more about Frank G. Okie in the Inventors Hall of Fame. Watch the video TEDxBerkeley - Carl Bass - The New Rules of Innovation (17:32 min). It provides detailed information about the process of innovation and its impact on change. Another key topic discussed in your reading is change. The concept of change is probably not a new topic within organizations, although the pace of change has increased considerably over the past few years. A logical question related to change is why most organizations change on a continuous basis. Organizations compete in with other companies in the marketplace based on competitive advantage. An organization's competitive advantage merely reflects the organization and the marketplace at a particular time and is based on many economic variables and conditions. These variables can change at any time, affecting the competitive advantage of the organization. Organizations must change continuously to remain competitive in the marketplace. The following example illustrates the importance and value of continuous innovation accompanied by change management. Example British Petroleum (BP) is an innovative company. BP embraced various innovative and change management strategies as early as the 1990s by investing in alternative energy sources and agreeing to reduce its emissions from greenhouse gases. BP was among the first of the major global oil companies to consider providing energy from sources other than petroleum. This strategy included manufacturing plants for solar energy and spending millions of dollars yearly on the research and development of biofuels such as ethanol. The organization publishes a technology outlook that focuses on evolving new power sources such as solar, geothermal, and wind. This perspective of looking towards the future with designed strategies allows BP to not only think about what energy people need, but what energy they want. Read more about this company on the BP Web site. Summarizing Your Learning The following activities are meant to help you practice the concepts that you studied in this lesson and prepare you for the graded assignments. They are not turned in to your instructor. Read the assigned chapter in the textbook. Revisit the questions in the "Check Prior Knowledge" section above. Have your answers changed? Why or how? Assessing Your Learning Graded Assignments The following are required assignments for this lesson. Read Chapter 7: "Innovation and Change." Complete the Lesson 6 Essay (20 points). Complete the Lesson 6 Case Study (20 points). Essay Review Exhibit 7.3 on page 139 in the textbook. Using the exhibit and Chapter 7 as a reference, answer the question below in essay format. Your grade will depend on your ability to incorporate core ideas from the textbook and your ability to respond to each question in a detailed and structured manner. Your essay must include an introduction, body, and conclusion, and address all relevant parts of each question. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Essay Questions Define and provide an example of each aspect of the Components of Creative Work Environments. Be sure to define each component, explain how it applies to a creative environment, and describe its importance in the overall functioning of a creative organization. Submit your assignment, which is Lesson 6 Essay in the Gradebook. Case Study Read the case study "3M: Innovation, Ideas and Solutions for a Modern World," and answer the questions below in essay format. You will be graded on your ability to incorporate core ideas from the textbook and your ability to respond to each question in a detailed and structured manner. Your essay must include an introduction, body, and conclusion, and address all relevant parts of each question. Make sure to cite any references you use. Proper citation format for a reference includes the name of the author(s), the title of the work, the date of the publication, and the page number. Case Study Questions Using what you have learned in Chapter 7, what did 3M do correctly relative to innovation? What were the key steps 3M took to be innovative, and how did their actions affect the company? Could 3M have improved on anything to be more innovative, or do you believe their plans were complete? Why or why not? Submit your assignment, which is Lesson 6 Case Study in the Gradebook. Have You Met The Objectives For This Lesson?