1: Understanding Innovation and Change
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Created on October 17, 2024
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Transcript
Understanding Innovation and Change
ILM Unit 504 - Leading Innovation and Change
START
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Index
Let's get started!
Learning objectives
Defining change
Innovation and creativity
References
Core competence
01
04
03
03
02
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Let's begin
01: Learning Objectives
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Assessment Criteria
It is becoming increasingly clear that the organisational challenges we face cannot be solved by a select few at the very top. Instead, we require the innovation, inspiration and creativity of diverse management and leadership groups. Organisations with an open-mind, passion and commitment to the changes and business innovation challenges ahead will thrive. Freshen up your knowledge and thinking about what ‘change’ and ‘innovation’ means in your organisation as the debate moves away from generalised discussion about organisation’s changing towards a more focused approach. By the end of this unit, you will:
- Understand the need for innovation and change management within an organisation
- Be able to propose innovative solutions to improve organisational performance
- Be able to lead and manage change within an organisation
Learning Objectives
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02: Defining Change
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Creativity, flexibility and adaptability are all skills which organisations need to keep up with the demands of their customers. No matter the sector or industry, change is a constant. Therefore to keep up with changes to in technology, legislation, politics and the environment, organisations must learn to change. The consequences of not keeping up with the environment mean you will begin to stagnate, fall back and fall off your competitors. This is strategic drift, and it takes place when the world moves on, leaving your business behind. Organisations therefore need to have a plan (a strategy) to adapt to the changes that impact on them and their product or service. If they do not them they will become out-dated, irrelevant, uncompetitive, inefficient and unfit for purpose.
Defining change
The role of senior leaders
Your role as a manager
Past vs Future comparison
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There are many types of change which can all bring their own consequences and challenges. Categorising the change can help us to then consider the actions that we need to plan and take.
Defining change
Organisation wide change vs Sub-system change
Transformational change vs Incremental change
Remedial change vs Developmental change
Unplanned change vs Planned change
Activity: Throughout this unit, we’ll frequently use the terms ‘Creativity’, ‘Ideas’, and ‘Innovation’, so it’s important to clarify what we mean by them. Please take a moment to write down your own definitions, then compare them with the definitions on the next page.
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Definitions
Creativity: Treat people as creative
Ideas: Know how to handle ideas
Innovation
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Identifying and Dealing with Drivers for Change
In today's dynamic business environment, organisations face numerous internal and external factors that drive the need for change. Explore the following examples:
Mission and strategy
Leadership
Structure
Task requirements and individual skills
Individual needs and values
Employee motivation
Work unit climate
Organisation culture
External environment
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03: Innovation and creativity
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The Creativity - Tapping into Innovation pearl of wisdom® looks at the requirement to do 'more with less’ in these times of change and scarce resource - which necessitates the need to find new ways of doing things. It looks at the challenges of tapping into the creativity that research shows we all used to have, and reawakening that in our people. By watching this pearl of wisdom® you will be able to:
- State the importance of tapping into employee creativity.
- Describe the two approaches discussed for awakening dormant creativity within your people.
Activity: Watch the 'Tapping into Innovation' pearl of wisdom®
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History shows that crises often spur innovation. The propensity to innovate is one of the few ways an organisation can respond proactively to a fiercely competitive marketplace. In a UK survey report (2023) innovation remains a highly valued imperative for organisations - 78% of the respondents reported that innovation was ‘very’ or ‘extremely important’ to their organisation’s agenda in terms of products, processes or business models.Over half of all respondents (58%) indicated that the importance of innovation had increased over the past 12 months as a result of the recession.
Innovation and creativity
“If an established organisation, which in this age necessitating innovation, is not able to innovate, it faces decline and extinction” - Peter Drucker.
“We are in an economic downturn but an innovation upturn” - Bill Gates.
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04: Core competence
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These are defined as “an organisation’s major value-creating skills, capabilities, and resources that determine its competitive weapons” (Hamal and Prahalad, 1990). Hamal and Prahalad suggest that it is a firm’s ability to learn faster and apply its learning more effectively than its rivals that will give it competitive advantage. Some questions they ask, and that you could ask yourself, are:
- “Does the senior management team have a clear and broadly shared view of how the industry may be different in 10 years time?”
- “Is the task of regenerating core strategies receiving as much top management attentions as the task of re-engineering core process?”
Core competencies
Strategic Leadership Through Long-Term Vision: Hamel and Prahalad's Approach to Strategic Intent vs. Strategic Fit
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- United Kingdom Innovation Survey 2023: Report (no date) GOV.UK. Available at: https://www.gov.uk/government/statistics/uk-innovation-survey-2023-report/united-kingdom-innovation-survey-2023-report (Accessed: 17 October 2024).
References
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Complete!
Well done! You have completed this section. Head back to your course page and continue working through the unit.
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Task Requirements and Individual Skills/AbilitiesChange at a higher level in the organisation will often require changes in the work carried out and the skills available in the team. As the change manager you need to assess whether: all the right skills are in place; if they can be developed; or, if you need to bring them in from outside the team.
Mission and Strategy An organisation’s mission articulates its reason for existing. It is the foundation upon which all activity should be built. The strategy then sets out, in broad terms, how the organisation will go about achieving its mission. Very often, the strategy will be developed in light of environmental change, and will have a significant impact on the work you do. As a change manager, you need to understand change in strategy and be able to communicate the implications to your staff.
Work Unit Climate This considers employees’ perception of their immediate colleagues and working environment. Our immediate working environment is often what shapes our view of the organisation as a whole, and influences the extent to which we feel satisfied in our jobs. Changes to the immediate working environment need to be managed sensitively, as they are likely to invoke a range of emotional and political responses from staff. This is particularly the case where change involves moving location, a change in personnel, or a change in terms of conditions of service, such as working hours.
You, as a manager in your organisation, have a part to play in the successful implementation of a change process. You will also be a part of those change processes and be personally affected by them. You also will initiate and manage change processes within your own departments and teams. You will also implement and manage personal change processes throughout your career. Change is therefore necessary and ubiquitous, but it is not always easy or comfortable. Some pain and discomfort however, is far better than irrelevancy and oblivion.
No idea is born perfect. Charles Brower says “a new idea is delicate, it can be killed by a sneer or a yawn, it can be stabbed to death by a joke or worried to death by a frown on the wrong person’s brow”. So think about how you receive an idea from someone. If you are not respectful to someone’s first idea, don’t expect them to volunteer a second. And don’t reject an idea simply because it has rough edges, with a little work, it may be the solution – and many great ideas are the result of combining together several ‘raw’ ideas. So nurture an environment where innovation is welcome and handle suggestions sensitively and you may find that the creativity you need to “do more with less” is not absent, just dormant.
Innovation is a process by which a product, or a service is renewed and brought up to date by applying new processes, introducing new techniques, or establishing successful ideas to create new value. The creation of value is a defining characteristic of innovation. The pillars of innovation reliant on creativity and ideas of people whi keep trying to improve the system for the modern day.
Hamel and Prahalad, recognised as key thinkers on strategy, argue that organisations must adopt a long-term perspective to achieve global strategic leadership. In their 1989 article Strategic Intent, they differentiate between "strategic intent" and "strategic fit".While strategic fit focuses on aligning resources, products, and financial targets to maintain competitive advantage, strategic intent emphasises a broader vision, purpose, and flexibility in achieving long-term goals. They critique the traditional approach, where strategies are often limited by a "feasibility sieve", preventing organisations from pursuing ambitious goals beyond conventional means.They also highlight the importance of foresight, which involves anticipating future opportunities by moving beyond current markets and structures. Lastly, strategic architecture is described as a broad, long-term roadmap, guiding future benefits and innovations rather than focusing on short-term, detailed planning.
Organisation wide change vs Sub-system change An organisation-wide change might be a major restructure; whereas a subsystem change could be the addition or removal of a service, or reorganisation of an individual department.
LeadershipThis considers the attitudes and behaviour of senior colleagues and how these behaviours are perceived by the organisation as a whole. The way in which change is implemented and accepted through the organisation will be largely influenced by the top team. Does your team believe that senior colleagues are committed to change, or is it just another initiative that will disappear in six month’s time?
Organisation Culture Organisation culture can be described as “the way we do things around here”. It considers the beliefs, behaviours, values and conventions that prevail in an organisation. Culture change does not happen overnight. It evolves over time as a result of many other changes in the organisation. As a manager, you should keep in mind the desired state for the organisation, in terms of how you expect people to behave (and not to behave), and what your organisation values as important. You need to ensure that your behaviour fits with these expectations at all times, and that you ‘walk the walk’.
Through completing this unit, you will be able to:1.1 Explain the importance of innovation for own organisation 1.2 Explain the importance of managing change within own organisation 2.1 Assess an opportunity for innovation and improvement in own organisation 2.2 Justify the improvement identified, in the context of organisational objectives 2.3 Use a range of techniques to generate innovative options to deliver the improvement identified 2.4 Evaluate options for generating the proposed improvement to determine feasibility and viability 3.1 Create a change management plan that is designed to meet stakeholders’ expectations 3.2 Implement the change management plan, monitoring progress against agreed targets
Assessment Criteria
Your senior leaders should be making decisions that mean change for the organisation, so that the business responds to the future. They might not always get the change or the change process right first time, but they are right in pushing forward with plans to change.
Structure Very often, changes in strategy can lead to changes in the way the organisation is structured. This can impact on relationships, responsibilities and ways of working. Your job is to assess the impact of the structural change and ensure your team understands why it is required, and what it means for them.
Remedial change vs Developmental change Remedial change is change that is introduced to remedy a problem, so is often focussed and urgent; whereas Developmental change is where an organisation deliberately looks to build on successes or to increase success.
The following matrix describes wider change factors that have affected all institutions, services and organisations, and their staff, over recent years. The essential point is: Change is inevitable, and you need to learn to adapt. The organisation and the individual are faced with the same choice – respond effectively to change or go into decline.
Transformational change vs Incremental change Transformational change describes a change to the culture and structure of an organisation, taking the major parts apart and putting them back together again; an example of an incremental change would be a continuous improvement processes. These incremental changes may not even be seen as change.
Individual Needs and Values Changes to team membership can mean a change in the team dynamic. In a perfect world, we would be able to recruit the exact fit for our teams, in terms of personal style, abilities and skills mix. However, in reality it is not always possible, and it is your job to identify any risks in this areas and mitigate them as best you can.
Educational Theorist Sir Ken Robinson states that, as children we are all incredibly adept at divergent thinking. The problem is this skill is educated out of many of us at school. Robinson recalls Picasso as saying “We are all born artists, the challenge is to remain an artist as we grow up”. If we consider that instead of ‘uncreative people’ we have folks whose creativity is simply dormant, then it’s about getting the environment right to re-invigorate that innovative thinking we need. That starts by changing the organisational culture to the point where new ideas are welcomed from the top of the organisation down. Encourage, embrace and reward creativity. Talk about what needs to change, remove blockages to creativity and make time and space to encourage the generation of ideas.
External Environment This includes such factors as markets, legislation, competition and the economy. All of these will have consequences for organisations, and, as a change manager, it is vital that you continually scan the environment for issues that will affect you and your team. For example, in the world of accountancy, International Accounting Standards and International Financial Reporting Standards will have a significant impact on the way companies manage their accounts and report their results. In the public sector, legislative changes across health, local government and other services have a direct impact on the work organisations are required to carry out.
Unplanned change vs Planned change Unplanned changes are, unsurprisingly, changes as a reaction to sudden, surprise actions, such as the resignation of a Chief Executive; the opposite would be a Planned change – this might be a change that is scoped and planned, often as the result of a strategic analysis and/or horizon-scanning.
Employee Motivation Considers the significance of individual and organisational goals. Motivation is key to effective change. The real challenge is to maintain motivation throughout a change project, particularly when change is often not well-received by those affected.