Organizational Change and Innovation - Research Paper Example

? Organizational Change and Innovation inserts his/her s In the contemporary world, the only thing constant is “change”. Change management is at the heart of the modern day learning organizations which compete on their knowledge resources (as opposed to physical resources) the globalized world. To this end, innovation is best understood as a change process which requires organizations to give up their current ways of thinking and working (unfreeze), adopt the new behavior and thinking (implement change) and finally reinforce the new behavior that it becomes a part of the organization. It is an undisputed fact that organizations must innovate in order to benefit from new technologies and resources to stay ahead of their competitors. Innovation, therefore, is viewed as both an ends and a means of securing competitive advantage. Organizational innovation has, therefore, been defined as the process whereby organizations engage in new product development or new uses of products and services that already exist. Before attempting to analyze the challenges of innovation as a change management process, it is necessary to understand the various types of change. Radical innovation defines the introduction of a completely new product or technology that takes the place of an existing one (Griffin, 2013). Incremental innovation, on the other hand, is modifying an existing product/technology with a newer one (Griffin, 2013). Technical innovation deals with changes in the performance, appearance or other aspects of the product or of the processes through which it is passed (Griffin, 2013). Management innovation refers to changes in organizational structure or managerial processes (Griffin, 2013). Finally, product innovation deals with changes in the product as opposed to process innovation that deals with alterations in the distribution, manufacturing or creation of processes (Griffin, 2013). History is replete with the cases such as 3M’s innovation of sticky notes, IKEA’s introduction of cost-effective, innovative designed home furniture and furnishings and Google’s technical innovation by expansion into books, news, maps, navigation and other areas. All these have successfully demonstrated the rewards that innovation brings. However, various companies have failed to innovate owing to various reasons. Like any other change, innovation too can be met with resistance from within the organization. Furthermore, the lack of a supporting culture and the lack of “fit” with the external environment often render innovation useless. It is worth noting the cases of companies that failed to innovate successfully because they were unable to adapt themselves to the external environment. Sony is one such company which failed with its “e-books” reader which lost its battle against Amazon (Viardot, 2011) . It was unable to find solutions to the challenges imposed by the economic and legal environment with respect to the publishers and authors. The company failed to offer a solution to managing and protecting digital rights and was unable to design an effective online store. This is contrary to the success that Amazon had in the succeeding years with its e-book service “Kindle” which paradoxically was bulkier, larger and had a smaller screen compared to Sony’s Reader. Furthermore, Kindle had limited capabilities in that it was able to source content only from Amazon. Despite these shortcomings, Kindle prospered because Amazon based its value proposition on alignment with the ecosystem. The company, instead of forcing publishers to succumb to the platform, gave them incentives to make them ‘want to’ become a part of a revolutionary milestone (Sadowski, 2013). Compared to Sony, Amazon focused on the bigger picture and even sacrificed its profits to generate volumes. Furthermore, the success of innovations by companies such as Apple have highlighted just how important it is to achieve flexibility with respect to the external environment. The company’s innovation iPod succeeded largely because the product was introduced once the broadband technology necessary to support transfer of music files was in place (Allen, 2012) . This concept was enlarged by the introduction of the Apple iTunes store and the compatibility of this device with personal computers (Park, 2011). In view of the above, it is important to understand the relationship between flexibility and innovation. The term flexibility captures organizations’ capacity to change. Companies that fail to respond in real-time to stimuli from the environment may fail altogether. Microsoft, for instance, was flexible when it responded to the threat imposed by Netscape by increasing the number of individuals working on its internet applications (Shavinina, 2003) . The concept of flexibility in organizational structure, processes and thinking has often been associated with organizational creativity which has been defined as the change in procedures to develop new products or enhance the quality, cost or customer satisfaction. Studies have also elaborated on the types of flexibility required at different stages during the innovation process. Models that define innovation as a process of change management often delineate on four major stages: preparation, incubation, illumination and verification (Chakravarty, 2010). The preparation stage involves using knowledge and skills to identify and analyze the problem at hand (Chakravarty, 2010). Illumination refers to the stage where the organization comes up with an unexpected insight regarding the problem’s solution which is put to test during the verification stage (Ellwood, Pallier, Snyder, & Gallate, 2009). The role of flexibility during each stage has been stressed with a distinction made between adaptive and spontaneous flexibility. Considering that organizations change and innovate for various reasons, adaptive flexibility refers to the pressure from external environment to change and innovate (Good & Sharma, 2010). On the contrary, spontaneous flexibility refers to the internal motivation to change and innovate. The preparation stage, for instance, may require spontaneous flexibility whereby information may have to be searched from a variety of sources and angles rather than confining the information search to suit preconceived notions. Insights during this stage may be generated by virtue of adaptive flexibility in order to generate the problem (Shavinina, 2003). Incubation, on the other hand, requires a great deal of unconscious information processing which limits the role of flexibility. Despite this, researchers have pointed out how the very fact that organizations decide to step out of the problem at hand on a “conscious” basis is an act of flexibility in itself. Using emotions to direct creativity at this stage could make the role of spontaneous flexibility relevant (Shavinina, 2003). This is consistent with the Japanese notion of Kaizen incorporates “feeling” the issue and the resulting rigidity which eventually leads to the need for flexibility , thereby requiring the problem solver to experience the issue before attempting to solve it (Shavinina, 2003). In this case, Kaizen can safely be classified as incremental innovation or continuous improvement. However, this link is by no means direct and involves various mediating factors. Therefore, the fact that greater flexibility leads to greater innovation is limited by the mediating force of organizational culture. Organizational culture and leadership have been associated with the process of change. Organizational culture may be defined as the system of beliefs, values, assumptions and patterns of “external adaptation and internal integration” that organizations possess (Pfister, 2009). By affecting psychological processes such as employee motivation, commitment, communication and decision-making, organizational culture has a direct impact on organizational outcomes including innovation. The organizational cultures vary considerably in terms of their ability to encourage employees to develop innovative ideas, take on risks, tolerate failures and eliminate the status quo. One component of this is the attitude of managers who introduce changes and innovations particularly at lower and middle organizational levels. Positive attitudes towards innovation and creativity are only introduced through flexibility in the approach taken up by these managers. This flexibility incorporates both divergent and convergent views. Furthermore, transformational leadership also plays a vital role in developing a “climate for innovation” may then be linked to actual innovation. To this end, leaders develop a vision, stimulate the intellectual capital of employees, set high performance targets, monitor performance on an individual basis and prove to be a role model for subordinates tend to elicit a culture that is conducive to innovation. It is worth noting the impact that Steve Jobs had on Apple owing to his transformational leadership traits. It is not surprising, therefore, that Apple’s stock took a leap from $10 to $400 (CNN Money) during his leadership and that all major innovations including iPod, iPhone and iPad were introduced during his tenure. Other factors pertaining to the organization also play a key role in the process of innovation. Participative leadership style, degree of collaboration and encouragement of risk taking play a critical role in innovation. Exchange of ideas can only take place with cross-functional team work and collaboration. For instance, 3M innovation of Scotchguard was possible because of open flow of communication (McLean, 2005). The work (which originated outside 3M) was taken up by scientists in a particular research unit and then applied to another. Similarly, organizations that grant autonomy and freedom to their workers tend to hone the intrinsic motivation of employees who tend innovate to move organizations forward. For instance, the developers of the Hewlett Packard “inkjet printer” were given the freedom to experiment with the various ways in which heat could be used to eject ink on the paper (McLean, 2005). Supervision was minimal to encourage freedom of thought. To conclude, it would not be an exaggeration to claim that no single factor can account for organizational innovation in isolation. It is the combined impact of flexibility, organizational culture, leadership and supporting behaviors that lead to innovation. On the other hand, it is argued that tracing the link between organizational culture, flexibility and innovation is largely theoretical in nature and lacks empirical depth. Nevertheless, these links can serve as the theoretical basis for further empirical research. References Allen, F. E. (2012, May 3). Why Great Innovations Fail: It's All in the Ecosystem. Retrieved from Forbes: http://www.forbes.com/sites/frederickallen/2012/03/05/why-great-innovations-fail-its-their-ecosystem/ Chakravarty, A. (2010). The creative brain – Revisiting concepts. Medical Hypotheses, 606–612. CNN Money. (n.d.). Apple's stock under Jobs: from $10 to $400. Retrieved from CNN Money: http://money.cnn.com/markets/storysupplement/apple_10yr_stock_timeline/ Ellwood, S., Pallier, G., Snyder, A., & Gallate, J. (2009). The Incubation Effect: Hatching a Solution? Creativity Research Journal, 6-14. Good, D. J., & Sharma, G. (2010). A Little More Rigidity: Firming the Construct of Leader Flexibility. Journal of Change Management, 155-174. Griffin, R. W. (2013). Management. Mason: South-Western Cengage. McLean, L. D. (2005). Organizational Culture's Influence on Creativity and Innovation: A Review of the Literature and Implications for Human Resource Development. Advances in Developing Human Resources , 226-246. Park, S. (2011). The effects of entry timing and business model innovation on performance: the case of the global MP3 player market. Asian Journal of Technology, 133-147. Pfister, J. (2009). Managing Organizational Culture for Effective Internal Control: From Pratice to Theory. Heidelberg: Physica-Verlag. Sadowski, B. (2013). The wide lens: a new strategy for innovation. Prometheus: Critical Studies in Innovation, 164-166. Shavinina, L. V. (2003). The International Handbook on Innovation. London: Elsevier Ltd. Viardot, E. (2011). Achieving Market Leadership for Innovation Through Communication. In M. H€ulsmann, & N. Pfeffermann, Strategies and Communications for Innovations (pp. 243-256). Heidelberg: Springer-Verlag . Read More