Leading Innovation and Change - Assignment Example

LEADING INNOVATION AND CHANGE ‘The trouble is that most organisations are unwittingly designed to encourage the acquisition of behaviours and practices they wish they had less of’. Discuss with reference to innovation and suggest ways in which these unhelpful behaviours and practices can be overcome. Introduction Innovation can be said be a necessary requirement for modern organisational development and growth. This is because through innovation, organisations of any kind are offered the opportunities of commercialise their inventions (Chan-Olmsted & Jamison, 2001). Any modern organisation that fails to prioritise and promote innovation there ends up lacking the innovation energy and potential that ensures profitability. Meanwhile, it will be admitted that they ways in which organisations are designed and managed that unwittingly discourage the prioritisation and promotion of innovation (Afuah, 2003). With such behaviours, the organisations are forced to acquire behaviours and practices that they wish they had less of. This paper is therefore dedicated to exploring some unhelpful behaviours and practices that militate against innovation, whiles identifying others that promote innovation. More to this, the paper will explore the role of innovation to competitive advantage as this will encourage organisations to pursue innovation. A number of models will also be considered that help in making the implementation of innovation easier. With all these areas of leading innovation and change considered, it will be possible to conclude on the overall relevance of innovation to modern companies. The role of innovation in creating competitive advantage Howells (2005) observed that before the late 20th century, competitive advantage to companies was all about ways in which pricing models will be used by companies to attract customers over their competitors. This has however been said to change since the late 20th century where innovation has become a key word in fostering the goals of competitive advantage for organisations of all kinds, especially profit making ones (Batra et al., 2000). Tidd and Bessant (2009) stated that the real role of innovation in creating competitive advantage is that it gives different organisations the opportunity of dealing with the same context in different ways. For example, Starbuck, McDonalds and Dunkin’ will all be presented with the same context of having to sell coffee products to consumers but through the power of innovation, each of these companies may do different things that make it possible for them to gain reasonable market share. In the absence of innovation therefore, different companies who are faced with the same marketing context would be forced to be doing the same thing and this would have it possible to decide who gets the advantage of attracting which customer (Johnson, Scholes & Whittington, 2009). Unhelpful behaviours and practices against innovation Based on the last section of the paper, it will be appreciated that the need to be innovative is not an option for any modern day organisation but as must. King and Anderson (2002) however lamented that there are behaviours and practices that most organisations put up unwittingly that discourages innovation. In most of the case, the challenge for most organisations to be innovative becomes considerable due to a restricted degree of flexibility and adaptability in the use of human resource creatively. Below, four major behaviours and practices against innovation have been outlined. Failure to respond to challenging environments Both the internal and external environments of global organisations change very rapidly. These changes happen because the dynamics of customers and other stakeholders for who the organisations operate also change very rapidly (Kotler & Keller, 2008). But given the fact that the organisations are there to serve the interest of their stakeholders, it is only necessary that for whatever change that is spotted within the company or outside of it, there will be a corresponding change that responds to it very appropriately (Senior & Fleming, 2006). It is in the need to doing this that the weakness of most organisations is exposed. The reason for this assertion is that whiles some organisations have innovative structures and systems that identify changes with the challenging environments others remain unconcerned and ultimately fail to be innovative. Organisations that refuse to change in respond to a changing environment will be said to be non-innovative because change has been said to be one of the key parameters for innovation (Tidd & Bessant, 2009). Using a SWOT model has been found to be an ideal means of responding to changes internally whiles a PEST analysis does same for an external environment (Smith, 2006). Failure to develop and maintain core competences among human resource The human resource of any organisation has been described as the engine of growth as the human resource is the fulcrum around which organisational operations revolve (Homburg, Klarmann & Schmitt, 2010). Certainly, there cannot be any work done when there is no human resource. However, it is not sufficient to have the human resource in place when the right competences needed for them to be effective and efficient are not put in place. It was against this backdrop that Tushman and Anderson (2004) argued that companies that fail to develop and maintain core competences among human resource cannot be innovative. Indeed it will be acknowledged that possessing competences is something that every human resource base of an organisation has. However, in order to ensure that the competences of one organisation is directed at result oriented outcomes, it will be important to have very strategically planned development programmes for the human resource. With these development programmes, the human resource becomes equipped with adequate knowledge of changes within the industry in which they work so that they can respond to these changes effectively. Failure to embed innovation in the strategy making process Most organisations can be said to have strategy making processes that define how they should approach the works they are assigned to do in order to keep them running, and also in business. Williams (2007) was however not pleased with the situation where the presence of these strategy making processes are only in place because the organisations feel that they need to have them to make their organisational culture complete. By inference, the strategy making process ought to be approached in a very unique way that can be said to be apart from what all others have. This is where the VRIO framework can be said to be an important model for embedding innovation in the strategy making process. This is because the VRIO framework ensures that the strategy used by companies are value oriented, rare, not easy to imitate, and well organised (Bettina, 2003). However, due to the fact that such models have not been used in the strategy making process, organisations end up with practices they wished they had less of because their strategies become so common that it fails to render any special results. Failure to allow employee engagement Apart from the fact that the human resource has been found to be an integral and inevitable part of the organisation, Sekaran (2003) also noted that real innovation rests in the individual creativity of the human resource. For this reason, organisations that fail to give people time and space to be creative and encourage participation only fail to nurture innovation. But in order to ensure that the right time and space to be creative is given to people and that the human resource is encouraged to participate, it will be necessary to have a high level of employee engagement in place (Tushman & Anderson, 2004). The rationale for this assertion is that where there is employee engagement, organisations make the human resource the centre of the organisation’s activities (Van Der Zee & De Jong, 1999). What is more, because of the need to ensure that employees are given the chance to function fully, the organisation becomes obliged to put in place competency development measures as have already been stated. Some of these measures include training and development. With employee engagement, each employee will bring his or her creativity on bear in creating a pool of creative innovations. Impediments to creativity As it has been stated earlier, most of the factors and conditions that prevent organisations from being innovative happen unwittingly. What this implies is that the companies may not deliberately put such factors in place to suppress the growth of innovation. For most of these organisations, there are often internal and external impediments of creativity that turn out to result in practices and behaviours that militate against innovation. Three such impediments to creativity are discussed below. Fear of failure Both innovation and change have been described as part of the risk that organisations take (Goffin & Mitchell, 2005). Carnall (2009) actually explained that the advantages and usefulness of change and innovation are only talked about because we take inspiration from those who managed to succeed while activating these at their workplaces. It is against this backdrop that some organisations can be said to fail to be innovative or encourage creativity due to the fear that the end may not be as they wanted. Meanwhile, the presence of the fail of failure itself can be said to be a negative catalyst that kills the motivation to attempt innovation. In effect, even though such organisations may not wittingly put in place practices and behaviour that discourage innovation, the fact that they failed to attempt creativity due to the fail of failure alone becomes a cause or reason to plan them for the failure. In the estimation of Burnes (2004), the more the leadership of the organisation fear to fail, the more likely it is that they would only take up less innovative ventures. Unwillingness to learn Coupled with the fact that some organisations fear to fail, there are those who are also unwilling to learn at all. Benchmarking is an important concept that most global companies are using today to support their innovation. Through benchmarking, there are competitors within the industry that these companies look up to (Lehner, 2004). Even though the innovative ideas of the benchmarked companies may not be copied thoroughly, they serve as an inspiration for the other company to know what to do and how to do it successfully. Meanwhile, there are times that pride sets in for the leadership and management such that they become unwilling to learn from outside sources. As dynamic as it may be, innovation is not something that can be said to rest in a single phenomenon or factor. It is for this reason that it is always important to look within the larger environment or industry where an organisation operates so as to learn from others in knowing how these have successfully used creative means to transform their outfits. Structural and cultural inertia In some organisations, there may be no fear of failure and leadership will be willing to learn but it is still possible that there will be structural and cultural inertia that may impede creativity. Structural and cultural inertia can be explained to be a situation where the organisational structure and culture is such that it fails to promote the easy implementation of creativity and innovative systems. Using Hofstede’s typology as an example, it will be noted that in any typical organisation, there will be those who prefer individualism versus collectivism, indulgence versus restraint, masculinity versus femininity, uncertain versus certain, and long-term orientation versus short-term orientation (Kuusela, 2003). Meanwhile, each of these cultural preferential differences comes with different ways in which people would want innovation to be approached. In organisations where the inertia with the cultural or structural difference is only mild, it may be possible to align them and go ahead with the changes and innovations. However, there are other times that the inertia becomes so great that satisfying one group and leaving the other create problems and so leaders decide not to attempt any changes at all. Expected innovative behaviour and practices for growth In place of the unhelpful practices and behaviours that retard innovation, there are some features and variables based on post-Fordism theory that can be used to promote innovative growth. Three of such innovative features, practices and behaviour that enhance growth have been discussed below. Small-batch production Compared to Fordism era where emphasis of manufacturers was on mass production for a mass market, post-Fordism takes a new twist where companies no longer take pride in how much they were able to produce or how much stock they have. Rather, the emphasis is now on how efficient the production is and how fast the inventories can be emptied to make way for new stock (Senior & Fleming, 2006). This has led to what is referred to as small batch production, where the rate of production is desired to be equal to the rate of sales (Smith, 2006). Meanwhile, the attainment of small-batch production is a process that has been noted to be possible only when the right innovative measures are put in place within the production system of the organisation (Scheid, 2005). A typical example of innovation that guarantees successful small-batch production is the use of lean production and six-sigma. These two innovations are recommended for small-batch production as they ensure that any forms of wastes associated with production are eliminated (King & Anderson, 2002). Once the wastes are eliminated, it can be assured that production will be within a desired limit. Specialised products and jobs In line with Porter’s generic strategic option and Bowman’s clock, companies operating in the post-Fordism era have come to realise the power of specialised products and jobs, as these lead to the creation of differentiation on the market (Porter, 2008). Both Porter’s generic strategic option and Bowman’s clock admit that when specialised products and jobs are created by organisations, it gives the possibility of developing a differentiated market positioning that targets a very specific group or class of buyers (Saraphina, 2008). In effect, unlike the Fordism era when production was mass, companies no longer look to the production of the same set of products or services. Rather, they find the most innovative ways of presenting the same kinds of products or services that other competitors offer in the most refined and value added manner that ensures that it is possible to sell these at additional prices (Henry & Mayle, 2002). A typical example that can be given in this instance is Apple’s iPads which sell at relatively higher prices than what other tablet computers sell on the market due to the differentiation that the company has innovatively gained. Use of new technologies Sambrook (2005) has identified technology as a driving force that currently controls the innovative strategies of organisations. This is because through technology, modern organisations are offered the freedom and opportunities of doing the kind of jobs that would have been done manually in the Fordism era in very simplistic ways. One typical practice that can be used as an example of how organisations in the post-Fordism era have used new technologies to their advantage and for the expansion of innovation is electronic commerce (e-commerce). On the wings of e-commerce, even the least organisation in terms of physical structure now has the opportunity of attracting global customers who can buy and make payments online and have their products delivered to their doorstep. Taking up the use of new technologies has therefore become an innovative means by which modern organisations are offered the opportunity of making the impossible in marketing possible. Another example that can be cited with the use of new technology is the ease and affordability that has been associated with the use of social media in promoting and advertising a business or its products. Emphasis on types of consumers One major theory that keeps expanding in the minds of modern business owners is segmentation. This is because through segmentation, companies are now offered the opportunity of emphasising on specific types of consumers whose unique needs can be met by the organisation so as to create a competitive advantage within that target segment (Howells, 2005). The emphasis on types of consumers as part of post-Fordism practice is clearly in contrast to Fordism era where mass market was the notion behind production. Because of the idea of mass market, there was no need to really differentiate between consumers on the market based on their demographic characteristics. Today, this has all changed as companies are now building on segmentation to position themselves well within the larger global market. As a result of the emphasis that is now placed on the types of consumers, it is now possible for organisations to use the focus strategic option recommended by Porter to gain competitive advantage (Bettina, 2003). This is because once a specific type of consumer group is identified and the production of the company is centred round this target segment, the company gains brand equity among the target group (Thomson, MacInnis & Park, 2005). With the brand equity created, customers will always choose the said organisation knowing that it is with it that it would have its consumer needs met. Implementation of innovative behaviour and practices Based on the best practices and behaviours found above, it would be said that it is one thing for an organisation to be aware of the practices and behaviours and another thing for it to implement them successfully. As part of the implementation process, the SSIC model may be used in a generic way to ensure that different enterprises are able to translate the factors above into practice. The first stage of the SSIC model is search, which refers the task of searching within the internal and external environments of the organisation to be aware of the best variables in place that makes the selection of a particular best practice and behaviour appropriate (Pauwels, Raluca & Descotes, 2012). For the external environment, using PESTEL analysis makes it possible to have a thorough search of the macro environment whiles Porter’s five forces helps in having a thorough search of the industry sector (Porter, 2008). Once the search has been completed, the next stage of select comes in. Even though there were only four features of post-Fordism that were discussed in the paper, there are actually several other features of this that can be found. The search stage makes it possible to find these and several others. At the second stage, the organisation is still expected to use practical and evidence based procedures in selecting the most appropriate features that will be used as innovative behaviour and practices. To do this, Stokes (2005) recommended such procedures including stakeholder analysis, cost-benefit analysis, and input-output analysis to know which of the identified features discovered from the search that must be selected for the organisation. Also at the selection stage, the use of shared responsibility among all employees and stakeholders within the organisation has been recommended as a means of securing effective and successful outcomes with the selection process. Indeed after the selection of innovative behaviours and practices, it will be expected that these will be implemented as part of the SSIC model. In the opinion of Urde (2003), the implementation stage is a very challenging stage as it could either have a positive or negative impact on the previous stages. That is, even after a successful search and selection, if the implementation is not done will, the expected outcomes with the innovative practices and behaviours will not be achieved. As a way of addressing the possible challenges with implementation, the use of system life cycle (SLC) has been recommended and used in most cases (Li, Guohui & Eppler, 2008). This is because with the SLC, the implementation is further divided into phases including definition, investigation and analysis, design, implementation, testing, installation, documentation, evaluation, and maintenance just as has been depicted in the diagram below. Figure 1: SLC Phases Source: Teach ICT (2015) Because of the breakdown of the implementation into phases, it is possible that the organisation will systematically distribute roles in each phase to different departments within the organisation for effective execution. The last stage of the SSIC model is capture, where the implemented practices and behaviours are translated into realistic features that become a part of the organisational culture. It is at the capture stage that the need to constantly evaluate the innovation to ensure that it constantly keeps up with its intended purposes is recommended (Afuah, 2003). Conclusion The paper has been useful in understanding ways in which modern organisations can lead innovation and change. On the whole, it has been appreciated that in order for there to be innovation, there are some practices and behaviours within the organisation that ought to be eliminated because they are not helpful. Some of these include failure to respond to challenging environments, failure to develop and maintain core competences among human resource, failure to embed innovation in the strategy making process, and failure to allow employee engagement. Even though these behaviours and practices are undesirable and largely unwitting, they are influenced by some factors that hover around the willingness to learn, boldness to face failure and the structural and cultural inertia at the work place. In place of the unacceptable behaviour and practices, it has been found that there are other positive behaviours and practices that promote growth. Based on these two sides of the paper, it can be concluded that the need desire to succeed as an organisation through the use of innovation is something that comes by choice. This is because there are very specific ways in which innovation can be approached to guarantee success. 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