Management Concepts Part 2

Organizational innovation

is the creation and implementation of a new idea, solution, or behavior by an organizationInnovation begins when people recognize and generate new ideas that solve prob lems or address opportunities

Disruptive innovation

Refers to innovations in products, services, or processes that radically change competition in an industry

Disruptive innovation is becoming a goal for companies seeking to remain globally competitive.

Companies that initiate a disruptive innovation typically win big; companies affected by a disruptive innovation may be put out of business

(More than 100 years ago, for example, Ford Motor Company introduced an affordable automobile, putting many wagon, carriage, and buggy whip makers out of business.)

reverse innovation

Companies such as Lenovo, General Electric, John Deere, and Procter & Gamble are creating innovative, low-cost products for emerging markets and then quickly and inexpensively repackaging them for sale in developed (high-income) countries.

ambidextrous approach

means incorporating structures and processes that are appropriate for both the creative impulse and the systematic implementation of innovations.

With an ambidextrous approach, managers encourage flexibility and freedom to innovate and propose new ideas with creative departments and other mechanisms, but they use a more rigid, centralized, and standardized approach for implementing innovation

product innovation

is a change in the organization’s product or service outputs.

Product and service innovation is the primary way in which organizations adapt to changes in markets, technology, and competition

(Product innovation is Beyond Meat, a plant-based meat alternative that is being sold at more than 70,000 places in 65 countries, including three of the five largest fast-food chains in the world.)

(Examples of service innovation include Apple Arcade, an app that offers access to more than 100 games for the iPhone, iPad, Mac, and Apple TV, and Zipline’s drone delivery of life-saving medical supplies in Rwanda and Ghana)

Exploration

means encouraging creativity, risk-taking, experimentation, and developing new ideas.

Exploitation

means implementing those ideas with established capabilities and routines.

process innovation

Is a change in the organization’s production process

Process innovations are designed to make the production of a product or service more efficient.

(Other examples of process innovation include the intro duction of efficiency-boosting winglets on aircraft at Southwest Airlines, the adoption of self-guided robots in some Lowe’s stores that lead customers to products or check inventory for staff)

Three critical innovation strategies

discovery, horizontal collaboration and open innovation, innovation roles and structures

discovery

involves designing the organization to encourage creativity and the initiation of new ideas.

horizontal collaboration and open innovation

refers to creating conditions and systems to facilitate internal and external coordination and knowledge sharing

innovation roles and structures

means that managers put in place procedures and structures to ensure that new ideas are carried forward for acceptance and implementation

Creativity

Refers to the generation of novel ideas that might meet perceived needs or respond to opportunities for the organization.

Characteristics of creative individuals: conceptual fluency, originality, curiosity, etc.

The 3M Company invites all employees to spend 15 percent of their time on “experimental doodling.

bottom-up approach

which means encouraging the flow of ideas from lower levels and ensuring they are heard and acted upon by top executives.

At Genentech, researchers can hold a forum with top executives whenever they want to propose a new medicine for development.

Open innovation

means extending the search for and commercialization of new ideas beyond the organization's boundaries and even beyond the industry, sharing knowledge and resources with other organizations and individuals outside the firm.

(Procter & Gamble used an open innovation process to introduce a new version of Pringles with trivia questions, facts, and jokes printed on the chips.)

Crowdsourcing

is an approach to open innovation that involves gathering information, ideas, or opinions from a large group of people, such as the highly diverse denizens of the Internet.

With internal crowdsourcing, employees can pitch their ideas to managers and colleagues and collectively decide which projects the company should pursue

PepsiCo has held a “Do Us a Flavor” crowdsourcing campaign every few years since 2012, allowing people to suggest and vote on new flavors for its Lay’s chips. Lay’s has received millions of ideas over the years, resulting in new flavors including Cheesy Garlic Bread, Kettle Cooked Wasabi Ginger, and Southern Biscuits and Gravy.

Innovation by acquisition

means buying start-up companies to obtain innovative products and ser vices, and usually the talent that created them.

horizontal linkage model

Several departments, such as marketing, research, and manufacturing, work closely together to develop new products

Corning created Gorilla Glass, now used on the touch screens of more than 6 billion consumer devices worldwide, using a horizontal linkage model

Corporate intrapreneurship

attempts to develop an internal entrepreneurial spirit, philosophy, and structure that encourages employees to act like entrepreneurs with respect to innovations.

idea champion (One important outcome of intrapreneurship is fostering an idea champion)

is a person who sees the need for and champions productive change within the organization

Research confirms that successful new ideas are generally those that are backed by someone who believes in the idea wholeheartedly and is determined to convince others of its value

idea incubator

is a distinct in-house program or center where ideas from employees can be developed without interference from company bureaucracy or politics

new-venture team

which is a unit separate from the rest of the organization that is responsible for developing and initiating a major innovation

These teams typically are small, loosely structured, and flexible

skunkworks

A separate, small, informal, highly autonomous, and often secretive group that focuses on breakthrough ideas for a business

Facebook’s AI Research Lab is a skunkworks where scientists explore ways to enable robots to learn, thereby developing better AI.

The clothing company Levi Strauss has a skunkworks called the Eureka Innovation Lab, where a team works on ideas to solve problems, such as replacing chemicals harmful to human health and the environment with safer alternatives.

in-house venture

A start-up that a company launches within the company rather than as a separate entity; it seeks to both nurture promising new businesses and stimulate entrepreneurship throughout the organization.

In-house start-ups are the ultimate ambidextrous approach

People change

concerns just a few employees; a change in the attitudes and behaviors of a few employees

Culture change

pertains to the organization as a whole; a major shift in the norms, values, and mind-set of the entire organization

Organization development (OD)

is a planned, systematic process of change that uses behavioral science knowledge and techniques to create a positive corporate culture and improve the way people and departments relate to one anotherbehavioral

three specialized techniques to help meet OD consultant’s goals

1. Team Building

2. Survey feedback

3. Large group interventions

Team building

is an OD intervention that enhances cohesiveness by helping groups of people learn to work together as a team

An OD expert can work with team members to increase their communication skills, facilitate their ability to confront one another, and help them accept common goals.

A major team-building experience at UnitedHealth is the annual broomball tournament held at the company’s headquarters in Minnesota

Survey feedback

OD change agents survey employees to gather their opinions regarding corporate values, leadership, participation, cohesiveness, and other aspects of the organization, then meet with small groups to share the results and brainstorm solutions to problems identified by the results

large-group intervention

approach brings together participants from all parts of the organization—often including key stakeholders from outside the organization as well— to discuss problems or opportunities and plan for change

A large-group intervention might involve 50 to 500 people and last several days.

Large-group interventions are one of the most popular and fastest-growing OD activities

Change

is the adoption of a new idea by an organization

Change is similar to innovation except that the new idea may be created elsewhere

An effective model for implementing change involves three distinct stages:

unfreezing, changing, and refreezing

Unfreezing

It is the stage in which managers make people aware of problems and motivate them to change. Managers demonstrate the need for change and create a vision everyone can believe in.

Changing

is the second stage, in which people learn new behaviors and skills to use in the workplace

refreezing

Stage, people have incorporated new values, attitudes, and behaviors into their everyday work and are rewarded for their adoption by the organization. The changes become institutionalized in the culture.

Why do people resist change?

1. Self interest

2. Lack of understanding and trust

3. Uncertainty

4. Different Assessments and goals

need for change

is a disparity between existing and desired performance levels.

To encourage innovation and lead change effectively, managers should help people feel the need for change rather than just giving them facts and figures.

Many people aren’t willing to change unless they perceive a crisis, so managers need to create a sense of urgency that change is really needed

Implementation Tactics

1. Top Management support

2. Communication and education

3. Participation

4. Negotiation

5. Coercion

Leadership

is the ability to influence people toward the attainment of goals.

Leaders inspire and motivate people to accomplish desirable goals

What are the three key aspects of leadership?

1. People

2. Influence

3. Goals

Formal leaders

are assigned to be leaders as part of their role in a group or organization and have leadership authority based on their position, such as the governor of New York or the CEO of Apple

Informal leaders

re people who do not have formal authority to direct the group, but whom people choose to follow because of their personal qualities. Informal leaders get their authority based on qualities such as having a mission, being able to inspire others, and demonstrating passion

Informal leaders emerge in ambiguous, unstructured situations, including bossless organizations

Greta Thunberg emerged as an informal leader in the worldwide environmental movement

Managers Qualities

Focus on the organization

Rational, maintains stability, assigns tasks, organizes, analyzes, position power

Leadership Qualities

Focus on people

Visionary, promotes change, defines purpose, empower, innovates, personal power

Level 5 leadership

which is characterized by an almost complete lack of ego (humility), coupled with a fierce resolve to do what is best for the organization (will)

Satya Nadella, CEO of Microsoft, illustrates humility by delegating and letting his executives take credit for accomplishments, saying, “CEOs can only do what they do if they have an amazing team.

servant leader

is a leader who serves others by working to fulfill followers’ needs and goals, as well as to achieve the organization’s larger mission

Authentic leadership

is an approach that draws on the leader’s self-awareness, self-regulation, and alignment of words and actions toward followers.

Authentic leaders inspire trust because they say what they think and do what they say.

Interactive leadership

is a leadership style characterized by values such as inclusion, collaboration, relationship building, and caring

An analysis found that countries led by men expe rienced an average of 214 COVID-related deaths per million inhabitants, whereas countries led by women suffered only 36 COVID-related deaths per million inhabitants; one reason for this difference may be that women leaders are more willing to admit uncertainty and seek advice from experts.

What are some differences in the ways women and men lead?

Women leaders typically score higher than men on abilities such as motivating others, building relationships, and developing others—skills that are based on humility and authenticity and are particularly well suited to today’s organizations.

Servant leaders operate on what two levels?

1. for the fulfillment of their subordinates’ goals and needs

2. for the realization of the larger purpose or mission of their organization

What are the 5 key characteristics of authentic leadership?

1. pursue their purpose with passion

2. practice solid values

3. lead with their hearts as well as their heads

4. establish connected relationships

5. demonstrate self discipline

Traits

are the distinguishing personal characteristics of a leader, such as intelligence, honesty, self-confidence, and even appearance

Strengths

are natural talents and abilities that have been supported and reinforced with learned knowledge and skills and provide people with their best tools for accomplishment and satisfaction