Institute of Business Administration

Jahangirnagar University, Savar, Dhaka.

“MANAGING CHANGE & INNOVATION”

Course Title: Organization and Management

Course Code: BUS-507 (F3)

Prepared by

Muktadir Ahmed Saroje ID: 202001015

Md. Muntasir Mamun ID: 202001036

Abdun Noor Nayem ID: 202001076

Tanmoy Kumar Ghosh ID: 202001083

Submitted To
S.M.A Moudud Ahmed
Lecturer
Institute of Business Administration
Jahangirnagar University, Savar, Dhaka
 LITERATURE REVIEW

We live with uncertainty, facing challenges and coping up with unpredictable

change of environment. In this volatile, complex and ambiguous environment,
each and every business organizations faces many changes. Needs brought about
innovations and innovation brought about changes. Thus efficient and effective
management of change and innovation is must to survive in the market. In our
presentation we discuss with various components of managing change and
innovation.

To understand the management of change and innovation, first we have to have

a clear idea of what change and innovation means. Only after we build a strong
concept then we can discuss about how to manage them. So, firstly we discuss
what change and innovation is and what triggers this changes and innovation in
businesses.

After initial discussion we go to in depth discussion about what are the gains of
right management of change and innovations, associated risks, what are the must
haves for managing change and innovation. Then we go on to the process itself
and the reaction of the organization member towards this process. Finally we
discuss some case studies of companies which succeeded or failed in managing
change and innovation.

Managing change and innovation is a vast topic and has many techniques and
special considerations in specific cases. What we tried to discuss is just the basic
in which complex methods are built. This will help us to picture what immense
impact it has in every organization and economy.
 MANAGING CHANGE & INNOVATION

To understand the concepts of managing change and innovation we first have to

understand what change and innovation stands for.
Change is the alteration of current condition in response of various internal and
external factors.
Innovation is the creation, development and implementation of new product,
process or service, with the aim of improving efficiency, effectiveness or
competitive advantage.
Thus management of change and innovation can be described as the process, tool
and technique of various aspects of change and innovation to achieve desired
business outcome.

Triggers of Change and Innovation:

Innovation inherently requires some levels of change and change requires
learning. However, humans and organizations tends to learn as a reaction of some
events. Business incentives provide additional motivation in exploiting existing
knowledge. What change triggers motivate the investment in new learning needed
to innovate is our next segment of discussion.

Triggers can be both external and internal.

External Triggers
❖ Customer’s needs, desires or expectations is a pretty good incentive for
organizations to change and innovate accordingly. It can be product or
services but as long as customer’s satisfaction is met, demand is stable or
rising and inverse makes companies fall out of competitive markets.
❖ Competitive offers is another reason for change or innovation. It can be
salary or benefits to secure relatively more skilled human resources or key
experts in related fields to achieve or maintain competitive advantage.
❖ New technology is also a trigger point for change and innovations. For
example, it can bring automation in production line or can be a strong
incentive to build new infrastructures and can motivate to innovate new
products or services.
❖ Changing demographics can be a strong trigger for change and innovation
as any change in demographics can have an acute effect in trends, tastes
and expectations requiring businesses to adjust to the new scenario and
thus bringing change and possibly innovation.
❖ Economic cycle expansion and contraction is a valid incentive for
organizations to adjust accordingly as the market demand fluctuates thus
bringing change and innovation.
❖ Geo-political events between heavyweights of world politics can have
diverse effects in world economics thus bringing vast changes in
businesses. Recent trade war between USA and CHINA can be a good
example of that. US sanctions on imports heavily disrupted supply chains
and thus forcing many businesses to find alternatives or cut spending.
❖ Environmental change is also a major trigger for change and innovation
as without preserving our environment, life would seize to exist and
making everything else meaningless. We can see how drastic this trigger
is as the power industry around the world is shifting from fossil fuel to
green energy bringing new innovation one after another and huge changes
in businesses and even in people’s life.
❖ Societal change can bring huge changes in businesses as it is directly
related to human interactions and norms. Behavioral patterns and cultural
value changes can vastly change what the customer’s desire in a product
or service hence new changes and innovation.
❖ Industry structural change brings dramatic change in how a country,
industry or market operates and thus businesses follow to adjust to the new
market conditions.
❖ Regulations change forces businesses to change and innovate. For
example, safety regulation changes forced RMG industry to build
adequate safety measures in their infrastructures, minimum wage
regulations can motivate innovation to find a way to cut spending to
balance the extra expenditures, environmental regulation forced tannery
industry to install recycling apparatuses to ensure environmental safety
etc.

Internal Triggers

❖ Decisions made by the management can bring new changes and

innovations as they set new business goals and structure the
organization accordingly.
 ❖ Problems in operations will surely bring change to solve this
discrepancies and sometimes new innovations are made for creative
solutions.
❖ Company growth or decline also brings changes as growing
companies thinks of ways to expand their markets and declining one
tends to cut expenses.
❖ Leadership and personnel changes can also bring changes in
organizations as each personnel has their own way of decision
making and modus operandi. New leadership sets new business
goals and to meet it changes and sometimes innovations are must.
❖ Changes in inter organization alliance can also bring changes as
co-operation procedures changes or sometimes new ventures are
started, experiences and personnel are shared, new business
feasibilities searched and investment in innovations done.

Benefits of Right Management of Change and Innovation

❖ Enhanced productivity is one of the benefits of proper

management of change and innovations as they bring more
effective operations and efficient production lines.
❖ Superior control over the process is ensured as new changes in
management of HR, production line or operations makes it more
convenient to monitor and supervise the processes.
❖ Improved return of the investment is ensured as changes makes
the whole process more efficient and new innovations
sometimes open new business frontiers and cut spending.
❖ Channelized process can be achieved as new changes can make
the whole process focused and objective driven.
❖ High impact productivity can be achieved as changes are made
and new model implemented to cut productivity lag.
❖ Coping with the changing market and customer behavioral
dynamic can be achieved as new changes are implemented and
new innovations are encouraged according to need of the market
and demand of the customers taking in the factors of competitor
organization’s maneuvers to gain more market shares. In
dynamic changing environment, to survive in the market correct
management of change and innovation is not only profitable but
also a must otherwise new business will take over.
For any kind of change and innovation in an organization there will be a concern
about risk factors. Some of them are:
Resistance: When a company's resources are already well suited to their current
circumstances, employees may not react well to change or may not be willing to
change over time. If the transition includes process automation or prompting
workers to learn an entirely new ability, they may also be afraid of losing their
jobs. This is when companies got resistance and got pressure while managing
change.
Weak Leadership: In order to achieve transition, good leadership is
fundamentally vital. On the other hand, weak leadership results failure of change
and innovation. If a leadership is not described regarding its function and failed
to reduce confusion after a change is made, the whole purpose of introducing
change and creativity within a company could be ruined. In a word it can be said
that the whole process of change and innovation lies in leadership.
Operational Disruption: Another obstacle, which could occur at the moment
and during transition, is organizational disruption. To carry creativity and
improvement, a small consultancy firm can just need to update their current
applications. A large or medium-sized business, though, may face a lot of
disruption when it comes to changing its own enterprise planning tools. This
disruption may be happened internally or externally, that’s why organization
should aware of factors that could happen any kind of disruption.
Process Limitation: There are two broad and common limits on the model of
invention. The first is an erroneous paradigm, one where the basic concepts
regarding the capacity of innovation and how it is essentially judged are clearly
incorrect. This calls for a full turn around and a new paradigm to be redeveloped.
The second is making an imperfect model of choice. Incompleteness is a
weakness that both models share in common, since a model of creativity can
never be flawless.
 Resistance

Weak Leadership

Operational Disruption

Process Limitation

Fig: Risk Factors of Change and Innovation

Though innovation and change will be the final destination, there are some
criteria that an organization should have. Those are:
Top Leadership Skills: Innovation can’t be effective at the corporate level
without complete leadership. Leaders in an organization set the tone for all their
employees.
Organizations will be competitive in the modern economy by providing well-
designed plans and a good implementation. Their overall aim of zero faults was
to eliminate confusion and risks. The model performed as long as the environment
specified and projected reasonably well.
This is not the case, though. Today's market climate, which demands
improvement to be competitive, is more dynamic and surprising. In order to allow
organizational creativity, leaders should be able to develop and step forward.

Effective Communication: Companies should pay careful attention to who

offers what signals as they change. The whole thing takes place in a setting where
everyone knows why and what position change is required. Since improvements
can’t occur without coordination, managing who delivers what messages when is
much more important.
It is a long, continuing endeavor to establish a collaboration strategy to help
progress. After this, the details they require can be obtained by all agencies
impacted by the move. They can then be an expert member of the change and
innovation with this material.
Feedback: It is difficult and will most certainly be resisted that the challenge is
to manage change, and so it is very important to managers to do all they can to
have a workforce that is dependent on change.
It is really do need to find opportunities to gain real input from the team so that
the process can be developed continuously. Regular pulse surveys are an effective
way of achieving so. Each employee should know that they are respected in this
way that increases the loyalty of the employees.
Embracing changes and innovation: The fast speed of technological innovation
and increasing consumer demands mean that producers are reinvented constantly
by research and development as well as through the launch of new goods.

Openly promoting creativity and inventive architecture will help transcend

organizational challenges and unite people around an organization's different
disciplines.

Innovation Process Design: It obviously can’t be denied that architecture is an

important and necessary factor in the process of product innovation. However,
calling it the core of innovation it presupposes too much, as it lacks the
considerable research body that points to the significance of a range of variables,
each with its own unique contribution to success in innovation. The aim is for all
these variables to be adequately managed in order to optimize innovation
opportunities.
 Fig: Criteria for Change and Innovation

Developing a Strategy to React to Change

Every process of change tends to undergo different phases linked directly to the
reactions of the members. This is a process during which we slowly begin to
readjust our perception and our behavior to the new situation and to the changed
reality with which we are confronted.

Obviously, we are referring to emotional processes or psychological phases and

how these are related to the change process and its progress. Below you will find
a description of the individual phases that people go through when dealing with
a process of change:

Shock: a huge discrepancy between our own expectations and outside

expectations plus the new situation. (During the shock phase people tend to feel
threatened by the perceived changes. They may be resistant to changes because
their expectations strongly differ from the expectations posed by those promoting
the changes).

Denial: a fake sense of safety and security, exaggerated perception of the

procedures and behavioral competencies. (During this phase people overestimate
their capability to
deal with the new situation)
Realizing: the need for new procedures and approaches. (At this point the idea
of taking some risks becomes more bearable and people begin to explore the pros
and cons of
the changes at hand).

Accepting the new situation: rejecting the procedures and approaches from the
previous phase (Entering into the phase of acceptance requires the rejection of
the old situation and
the ability to recognize the present requirements); Experimenting and searching
for new procedures and approaches. Success – failure, problems – frustration.
(During this phase the institution can prove its ability to explore change).

Understanding why certain procedures and approaches are successful and why
others fail. (People understand that the quality standards serve as an indicator for
the institution’s, as well as for the individual’s success).

Integration: integrating the successful new procedures and approaches into the
regular routines. (Ultimately, the integration and change phase signify that the
process has
been completed. This is a creative phase during which past and present
procedures merge. Depending on the extent to which integration is consolidated,
the application of the required procedures and approaches does not originate in
the outside of the organization but derives
from the personal contributions of each individual who adopts them and turns
them into his or her own)

8 Essential Steps for an Effective Change Management Process

Your organization is constantly experiencing change. Whether caused by new

technology implementations, process updates, compliance initiatives,
reorganization, or customer service improvements, change is constant and
necessary for growth and profitability. A consistent change management process
will aid in minimizing the impact it has on your organization and staff.

Below you will find 8 essential steps to ensure your change initiative is
successful.

1. Identify What Will Be Improved: Since most change occurs to improve a

process, a product, or an outcome, it is critical to identify the focus and to clarify
goals. This also involves identifying the resources and individuals that will
facilitate the process and lead the endeavor. Most change systems acknowledge
that knowing what to improve creates a solid foundation for clarity, ease, and
successful implementation.

2. Present a Solid Business Case to Stakeholders: There are several layers of

stakeholders that include upper management who both direct and finance the
endeavor, champions of the process, and those who are directly charged with
instituting the new normal. All have different expectations and experiences and
there must be a high level of "buy-in" from across the spectrum. The process of
onboarding the different constituents varies with each change framework, but all
provide plans that call for the time, patience, and communication.

3. Plan for the Change: This is the "roadmap" that identifies the beginning, the
route to be taken, and the destination. You will also integrate resources to be
leveraged, the scope or objective, and costs into the plan. A critical element of
planning is providing a multi-step process rather than sudden, unplanned
"sweeping" changes. This involves outlining the project with clear steps with
measurable targets, incentives, measurements, and analysis. For example, a well-
planed and controlled change management process for IT services will
dramatically reduce the impact of IT infrastructure changes on the business.

4. Provide Resources and Use Data for Evaluation: As part of the planning
process, resource identification and funding are crucial elements. These can
include infrastructure, equipment, and software systems. Also consider the tools
needed for re-education, retraining, and rethinking priorities and practices. Many
models identify data gathering and analysis as an underutilized element. The
clarity of clear reporting on progress allows for better communication, proper and
timely distribution of incentives, and measuring successes and milestones.

5. Communication: This is the "golden thread" that runs through the entire
practice of change management. Identifying, planning, onboarding, and
executing a good change management plan is dependent on good communication.
There are psychological and sociological realities inherent in group cultures.
Those already involved have established skill sets, knowledge, and experiences.
But they also have pecking orders, territory, and corporate customs that need to
be addressed. Providing clear and open lines of communication throughout the
process is a critical element in all change modalities. The methods advocate
transparency and two-way communication structures that provide avenues to vent
frustrations, applaud what is working, and seamlessly change what doesn't work.

6. Monitor and Manage Resistance, Dependencies, and Budgeting Risk:

Resistance is a very normal part of change management, but it can threaten the
success of a project. Most resistance occurs due to a fear of the unknown. It also
occurs because there is a fair amount of risk associated with change – the risk of
impacting dependencies, return on investment risks, and risks associated with
allocating budget to something new. Anticipating and preparing for resistance by
arming leadership with tools to manage it will aid in a smooth change lifecycle.

7. Celebrate Success: Recognizing milestone achievements is an essential part

of any project. When managing a change through its lifecycle, it’s important to
recognize the success of teams and individuals involved. This will help in the
adoption of both your change management process as well as adoption of the
change.

8. Review, Revise and Continuously Improve: As much as change is difficult

and even painful, it is also an ongoing process. Even change management
strategies are commonly adjusted throughout a project. Like communication, this
should be woven through all steps to identify and remove roadblocks. And, like
the need for resources and data, this process is only as good as the commitment
to measurement and analysis.
In order to stay at the top of their game every company needs to embrace
organizational change. But change is tough, almost 70% of change initiatives
results is failures. Successful change requires vision, big budgets, and special
talents where as bad management, poor implementation, or even bad luck may
lead to demise of even the greatest of giants
• Organizations that successfully innovated

Samsung as we know of today is an example of an organization that successfully

managed innovation and change
What they did right?
They obtained crucial strategies for attaining grand success:
• They expanded in order to stay number one by diversifying their customer
• Protected market share by continuous innovation which was reflected in
their products and extensive focus on brand image building
• Increased market share via effective distribution and partnership with other
businesses (mergers and acquisitions)
As a result of these strategies Samsung is currently world’s second largest handset
manufacturer and chip manufacturer. It is also the world’s leader in screen
technology, TVs, batteries, and chip design.

Google, undoubtedly one of the world’s most innovative company adheres to the
following innovation process:
• Explicitly encouraging their employees to spend part of their time on side
projects in addition to performing their core job functions
 • Narrowing down those ideas, prioritizing the ones that will make a
product or service ten times better than it is
• Google reaches out to the global community for help making an
innovation the best it can be
• Takes a leap of faith and launches without the expectation of perfection,
gathers feedback and improve the product

The World’s most innovative company

Apple is widely considered as the #1 innovative company in the world. The
company’s innovation strategy involves terrific new products and innovative
business models.
The company created game-changing innovations such as the iPod, iTunes,
iPhone, and iPad….
But what is their secret?
• Apple doesn’t just focus on building innovative and beautiful products. It
builds innovative business models too.
• Apple’s has an effective innovation system to harnesses creativity in its
people, stimulate new ideas, streamline the design process, and launch
successful, profitable new innovations
• Apple's Design Process repeatedly demonstrated with its innovation
management what a success user friendliness and design can generate
• Innovative Partnerships and Venture Acquisitions
Amazon has a different, yet more traditional, process of innovation. Rather than
allowing creative freedom for employees, Amazon sets innovation objectives:
• This setting of objectives is really the first step in Amazon's innovation
process.
• The second step in the process is sourcing ideas. Amazon sources ideas
from anyone in the company, and then identifies the ideas with highest
potential.
• Next, these top innovative ideas are pared down even further through a
more stringent evaluation process.
• Finally, innovations are executed and the results are measured.

• Organizations that failed to innovate

The rise and fall of a giant - Nokia

In late 90’s and early 2000’s Nokia was the world’s largest mobile manufacturer
with almost 50% market share in it’s prime.
But what went wrong??
Well they did not do anything wrong but somehow they failed
As internet got popular, other mobile companies started understanding how data,
not voice, was the future of communication.
• Nokia failed to grasp the concept of software and kept focusing on hardware
• They could not bring drastic change to their user experience and forced them
to develop a messy OS
• They were overconfident of their brand image and wanted to enter the smart
phone market late
The launch of iPhone revolutionized the industry which was followed by
Android. By the time Nokia finally made the decision to compete, but it was
already too late. Their products weren’t competitive enough.

Why did Blockbuster fail?

The video rental business was at its peak in 2004 and the company even survived
the shift from VHS to DVD but what happened??
• They could not innovate into the market which allowed home delivery and
focused on physical stores. They did not bother to change their strategy.
• In early 2000, they rejected Netflix’s business model of running Blockbuster
online. They rejected the idea of online streaming as “niche business”
Today, Netflix is 28 billion dollars company whereas Blockbuster filed
bankruptcy in 2010.

Before Google, it was Yahoo who dominated the online advertising and search
engine market…
• In 2002, they had the chance to buy Google
• In 2006, they had the chance to buy Facebook
But what went wrong??
Yahoo wanted to become a media giant, they undervalued the importance of
search and focused more on media. While doing so “they neglected customer
trends and failed to improve user experience”.
They missed out on many opportunities, who knows, if Yahoo took some risks
we would be Yahooing rather than Googling.

Kodak has dominated the photographic film industry for the entire 19 th century.
They had every opportunity to lead the digital photography revolution. They even
developed world’s first digital camera.
But what went wrong??
• The Kodak management denied the innovation they developed and thought
that digital photography as disruptive technology
• They were so focused on the film success that they did not approve
production of digital camera.
As a result, they missed the digital revolution, lagged behind and finally filed
bankruptcy on 2012, surprising many in the world.

We have entered fourth industrial revolution era. Every revolution has its own
catalyst. This fourth revolution is happened based on blooming of information
communication and technology. Every organization keeps changing their mission
and vision according to change of time. So, change and innovation should be
brought out for the welfare of the world.