Unit IV - SBL – Innovation and Change Management

Organizational Success through organizing:

In order to achieve increased and sustainable results, organizations need to execute

strategies and engage employees. Success is measured by analyzing where the
organization is in regards to its goals and its mission. Having an effective
organizational structure in place can increase productivity, improve operating costs
and employee satisfaction.

But why does an organization need a structure? This is important because it gives a
clear picture of the reporting lines and helps you understand who you should report
to. Also, by having clear reporting lines it makes it easy to have more control over
the resources. Organization structure is more like the backbone of an organization’s
culture, it therefore can directly affect employee behaviour, performance and
motivation. Therefore, having a structure in the organization is important rather than
leaving it carelessly managed with no clear structure. This will allow to identify the
positions within an organization, determine who manages which departments and
define individual job levels and roles in the organization. No matter how much talent
there is in the organization, if the right people aren’t in the right roles or don’t have
the authority to execute their roles properly, they won’t be able to fulfill their
potential. This is where structure comes in. There is no single structure that is right
for every organization. Even similar companies in the same industry might have
different approaches, and each of them could be effective. When determining
organizational structure, aligning with the strategy and providing appropriate
authority are key considerations.
The structure of an organization is defined by both official and unofficial hierarchies.
Official hierarchies are the relationships between executives, senior leaders, line
managers, team leaders, and every individual in the organization. These
relationships are critical for conveying the organizational vision, communicating the
strategy for achieving it, and providing performance feedback. Unofficial
hierarchies exist in every organization, and the most successful ones recognize this
and foster these relationships in a positive way. These are the day-to-day working
relationships that allow individuals to learn from others’ expertise, make quick
decisions, and operate productively. Because these unofficial hierarchies can play a
significant role in performance, it’s important to empower people to build these
relationships.

Clear Communication about Structure - Having a clear structure allows

organizations to work more effectively toward a common goal. Every organization’s
structure is different. Even two companies with the same official structure will have
unofficial hierarchies that make each of them unique. The structure must be clearly
defined and communicated to everyone in the organization, regardless of the
parameters. Without a clear structure, employees don’t know who to go to for
approvals or where they should seek advice. This leads to confusion and potentially
a diversion from the vision. It’s also important to remember that structures evolve
over time, so continue to communicate as roles change.

Strategic Alignment - When deciding reporting relationships, they need to be linked

to the overall strategy of the organization and confirmed that whether the structure
supports it. This approach could result in the formation of new departments,
restructuring of teams, changes in reporting relationships, or other decisions that
might rock the boat. Making changes if the current structure doesn’t support
organizational goals is a critical component of success.

Authority - Structure without authority does not fully allow individuals to execute
strategies. Individuals must know what degree of authority they have and in what
areas. However, providing the right amount of authority can be a challenge. Too
much can be unwieldy and result in poor decisions and power centers; too little can
impede progress. Deciding how much authority each role should have based on its
goals and objectives and alignment with roles at higher levels, ensuring that the
individuals in those roles have the right competencies to handle the level of authority
they have, and recognizing when individuals are ready to take on more authority is
important.
One of the key influences on organisational structure is the size and growth of the
organisation. As an organisation grows its organisational structure must change in
order to support this growth. The typical changes required are more specialization
and specialists, more decentralization, more levels of authority and more
bureaucracy.
 Environment Internal Key Key
factors building Coordinating
block mechanism
Simple Simple/ Small Strategi Direct supervision
structure dynamic Young capex
Simple tasks
Machine Simple/static Large Techno Standardization of work
bureaucracy Old -
structur
Regulated e
tasks
Professional Complex/ Professional Operatin Standardization of skills
bureaucracy static control gcore
Simple
systems
Divisionalised Simple/static Very large Middle line Standardization of outputs
Diverse Old
Divisible
tasks
Adhocracy Complex/ Young Operatin Mutual adjustment
dynamic Complex gcore
tasks Support staff
https://www.bridgespan.org/insights/library/organizational-effectiveness/key-
elements-effective-organizations

Organization success through disruptive technology:

Disruptive technology is an innovation that significantly alters the way that
consumers, industries, or businesses operate. A disruptive technology sweeps away
the systems or habits it replaces because it has attributes that are recognizably
superior. Disruptive innovation is an innovation that creates a new market and value
network and eventually displaces established market-leading firms, products, and
alliances. An example of a disruptor is the passenger service Uber which created a
business model using technology. The key reason for the growth of new disruptive
businesses is from technology. Not only from the technology that they employ in
order to cut costs and improve efficiency, but also in the access that consumers now
have to technology in the modern on-demand economy
Recent disruptive technology examples include e-commerce, online news sites, ride-
sharing apps, and GPS systems.
In their own times, the automobile, electricity service, and television were disruptive
technologies.
More recent are artificial intelligence, blockchain, 3D printing, VR/AR, and IoT

Managers must beware of ignoring new technologies that don’t initially meet the
needs of their mainstream customers. And yet, no matter the industry, a corporation
consists of business units with finite life spans: the technological and market bases
of any business will eventually disappear. Disruptive technologies are part of that
cycle. Companies that understand this process can create new businesses to replace
the ones that must inevitably die. To do so, companies must give managers of
disruptive innovation free rein to realize the technology’s full potential.

Organisational Success through Talent Management:

Talent management is defined as the methodically organized, strategic process of
getting the right talent onboard and helping them grow to their optimal capabilities
keeping organizational objectives in mind. The process involves identifying talent
gaps and vacant positions, sourcing for and onboarding the suitable candidates,
growing them within the system and developing needed skills, training for expertise
with a future-focus and effectively engaging, retaining and motivating them to
achieve long-term business goals. It is thus the process of getting the right
people onboard and enabling them to enable the business at large. Talent
management is aimed at improving business performance through practices that
make employees more productive.

Talent management is fast becoming one of the most vital strategic weapons in the
arsenal of companies that operate and compete globally. Several global
organizations now devote an ever-growing percentage of their annual financial gains
to become a magnet for, put to use, and hold on to their existing talent. In the current
global business arena of fierce and unyielding competition on a global scale, talent
can represent the key leverage a company needs to best its competitors.
Talent management strategy needs to be aligned with overall business strategy. The
pillars of this are:
 Attract great talent – source and hire the best.
 Develop employees that excel through exemplary onboarding, learning and
development, and performance management systems
  Motivate to succeed, by providing a great culture, rewards and recognition
and a work life balance
 And retain, by putting the employee first.
People are the heart of a company. Without the right talent, companies risk poor
culture, low customer satisfaction, and most importantly, a lack of innovation.
Employers today face a more complex talent management landscape than ever
before, and those that manage talent well will have a competitive edge over those
who do not. Traditionally, expenses related to employees were viewed as a cost to
the business. But to keep up with the rapid pace of change, companies must nimbly
leverage the skills of their employees for innovation and growth. Companies must
continually invest in their employees. In other words, talent management matters
because engaged employees are more productive employees, which in turn affects
a company’s bottom line, contributing to organizational success.

Organizational success through performance excellence:

Performance excellence is an integrated approach to organizational performance

management that results in delivery of ever-improving value to customers and
stakeholders, contributing to organizational sustainability and improvement of
overall organizational effectiveness and capabilities. Organizational excellence is
defined as the ongoing efforts to establish an internal framework of standards and
processes intended to engage and motivate employees to deliver products and
services that fulfill customer requirements within business expectations.

There are six key values that for organizational quality and performance excellence
are: (1) service orientation, (2) leadership, (3) information use, (4) collaboration, (5)
communication, and (6) continuous improvement

In the Malcolm Baldrige Excellence Framework, the attributes of organizational

excellence include:

 Leadership

 Strategic planning

 Customer and market focus

  Measurement, analysis and knowledge management

 Human resources/workforce focus

 Process management

 Business results

Financial technology (commonly known as Fintech) is completely disrupting the

traditional banking sector – long seen as a highly technical, highly regulated industry
dominated by giant banks. Fintech is used to describe new technology that seeks to
improve and automate the delivery and use of financial services. At its core, Fintech
is utilized to help companies, business owners and consumers better manage their
financial operations, processes, and lives by utilizing specialized software and
algorithms that are used on computers and, increasingly, smartphones. When
Fintech emerged, the term was initially only applied to the technology employed at
the back-end systems of established financial institutions. Since then, however, there
has been a shift to more consumer-oriented services and therefore a more consumer-
oriented definition. Fintech now includes different sectors and industries such as
education, retail banking, fundraising and nonprofit, and investment management to
name a few.
There are four broad categories of users for Fintech: 1) B2B for banks and 2) their
business clients, and 3) B2C for small businesses and 4) consumers. Trends toward
mobile banking, increased information, data, and more accurate analytics and
decentralization of access will create opportunities for all four groups to interact in
heretofore unprecedented ways.

The advantages that Fintechs have are:

 Better use of data – providing better understanding of their customer and

giving customers a wider choice

 A frictionless customer experience using elements such as smartphone apps

to provide a broad and efficient range of services

 More personalization of products/services to individual customers

 Lack of a physical presence with associated overheads and operating costs

FinTech is empowering consumers to take charge of their financial lives, leading to

much greater financial literacy than ever before. It’s tearing down the old silos and
helping to advance the consumers’ financial situation and outcomes by leveraging
advanced technology.

POPIT is a four view model that empowers an organization and drives it towards
excellence:

People: staff need to have the right skills and motivation to carry out the tasks. They
need to understand tasks and their roles within the organisation. Staff needs to be
developed to support business changes and resistance to change has to be managed
and overcome.

Organisation: Job roles need to be clearly defined and understood, lines of command
and communication need to be effective, the organisational structure needs to
support the organisational strategy, there needs to be flexibility in changing
environments and bureaucracy needs to be kept to a minimum.
Processes: these must be well defined, efficient, documented and understood. Those
of high strategic importance and complexity should have undergone process
improvement. Opportunities for improvement in other areas must have been
explored in order to maximize efficiency and support the organisational strategy.

IT: IT needs to support the changes that are taking place within the system. It needs
to provide the relevant information at the point that it is needed. IT can replace some
manual tasks and improve the efficiency of others. IT may facilitate organisational
changes, process changes and staff development and it therefore binds all of the other
elements together. IT must be exploited in order to maximize business benefits.

It will be important that all four elements work together and are considered in
achieving successful business. An organization’s capabilities are often derived
from and driven from success in having these four elements working together
successfully.
The model can be used in a number of ways:
 Identifying weaknesses in systems.
 Identifying opportunities for system improvements.
 Identifying areas that are not working well together.
 Ensuring that all aspects of business change are considered when
making process redesigns.
 Ensuring that managers do not become too blinkered and ignore all
organisational consequences and the larger picture. E.g., many times,
managers become overly focused on creating an excellent process but forget
 that the process will only be successful if the people in the organisation have
the skills to use it properly.

Balogun Hope Hailey Model:

The Change Kaleidoscope was produced by Hope Hailey & Balogun (2002) to be a
method for pulling together and arranging the extensive variety of logical highlights
and usage choices that require thought amid change. In this sense Change
kaleidoscope is even more a model than a strategy, however it is usable instrument
for conceptualizing the way of progress. By its plan, the model speaks to an
exhaustive system which manages the greater part of the variables that the creators
regarded noteworthy by the writing. The kaleidoscope model was utilized
interestingly to reflectively investigate a change project embraced in a first
pharmaceutical organization. The kaleidoscope contains an external ring which is
concerned with the highlights of the change setting that can either empower or oblige
change, and an inward ring that contains the menu of usage choices open to change
specialists. Comprehension of the context oriented highlights empowers change
specialists to judge the fittingness of any methodology for their specific setting.

The Kaleidoscope theory was developed by Hope Hailey & Balogun has three rings:

The outer ring relays to the broader strategic adjustment context.

The central ring relays to specific contextual issues that need to be considered when
expressing a revolution plan.

The internal circle gives a set of choices of selections and interferences, design
selections obtainable to change.

The Central Ring:

 Time -How rapidly is change required? Is the association in emergency or is

it concerned with longer-term vital improvement?

 Scope -What degree of change is needed? Does the change affect the whole
organization or only part of it?

 Preservation -What authoritative resources, attributes and practices need to be

kept up and secured amid change?

 Diversity -Are the diverse staff, expert gatherings and divisions inside the
association generally homogeneous or more various as far as qualities,
standards and disposition?

 Capability -What is the level of authoritative, administrative and individual

capacity to execute change? Is there a need to enhance this ability before the
change methodology can be begun?

 Capacity -How much asset can the organization invest in the proposed change
as far as money, individuals and time?
  Readiness for change – How prepared for change are the representatives
inside the association? Is it accurate to say that they are both mindful of the
requirement for change and roused to convey changes?

 Power -Where is the force vested inside the association? What amount of
scope of carefulness does the unit expecting to change and the change pioneer
have?

Balogun & Hope Hailey (2008) put forward four different classifications of change
that map the extent of the change required and the nature (or speed) with which the
change is to be achieved

The strength of Balogun & Hope Hailey’s model lies in its recognition of the
complexity of change and the need for change designs to be context-sensitive.
Because the framework is context-sensitive it can be used to understand the most
appropriate approach for change even if the context that it will be applied is different
from what was originally envisioned.

An organization’s vision can drive the company strategy, therefore the focus for
change should be aligning the company culture with this strategy. To that extent,
based on the different types of strategic change, an Evolution/Adaption change type
would be deemed appropriate for many organizations.
 Organizational Change simply refers to alteration in the existing conditions of an
organization. Even in most stable organizations change is necessary to maintain
stability. The economic and social environment is so dynamic that without adapting
to such change even the most successful organizations cannot survive in the changed
environment. Therefore, management must continuously monitor the outside
environment and be sufficiently innovative and creative to implement these changes
effectively.

 Reactive change results from a reaction of an organization to unexpected events. In

contrast to planned change, it is a piece-meal response to circumstances as they
develop. External forces that the organization has failed to anticipate or interpret
always bring about reactive change. Since reactive change may have to be carried
out hastily, it increases the likelihood of a poorly conceived and poorly executed
program.
 Planned change is always preferable to reactive change. Managers who sit back and
respond to change only when they can no longer avoid it are likely to waste a lot of
time and money trying to patch together a last-minute solution. The more effective
approach is to anticipate the significant forces for change working in an organization
and plan ways to address them. To accomplish this, managers must understand the
steps needed for effective change.

Kurt Lewin developed a simple model for achieving successful change and overcoming
resistance in three steps:

Unfreezing – create the initial motivation to change by convincing staff of the

undesirability of the present situation.

The change process itself – mainly concerned with identifying what the new behaviour
or norm should be. This stage will often involve new information being communicated
and new attitudes, culture and concepts being adopted.

Refreezing or stabilizing the change – ensuring that the new process and systems
becomes a natural part of the organization’s culture (implying reinforcement of the new
pattern of work or behaviour through changed rewards systems etc.).

Harmon’s Process Strategy Matrix:

Harmon's process-strategy matrix uses two criteria to categorize processes, and the best
approach to improving them:

The degree of process complexity and dynamics is plotted on the vertical axis; the
horizontal axis shows the degree of strategic importance of the process. Process
'dynamics' means the extent to which the process is subject to adjustment in response
to external stimuli. The effect of this analysis is to create four classes of processes, each
of which can be used in relation to a particular improvement strategy.

1 - Low complexity/low strategic importance processes need to be carried out as

efficiently as possible as there is little scope for improving them. These processes
should be automated as far as possible using technology and standard off-the-shelf
software. In some cases such processes may be outsourced, e.g. payroll processing.

2 - Low complexity/high strategic importance processes are key to the organization’s

success. Automation should be used to reduce costs and gain efficiency. The
organization’s management should aim to improve the efficiency of such processes, e.g.
product assembly.

3 - High complexity/low strategic importance. These processes will cause problems if

they are not performed, however they do not add much value. As these processes are
complex, they may be hard to automate. Organizations may decide to outsource these
processes to a specialist outsource partner, e.g. large-scale logistics and distribution.
4 - High complexity/high strategic importance. These are critical and involve a lot of
human expertise. These processes will be a priority for major improvements, e.g.
negotiating partnerships, new product development.

Leading and managing change projects: Post project Reviews:

A project is an undertaking that has a beginning and an end and is carried out to meet
established goals within cost, schedule and quality objectives.

Projects have a defined beginning and end; have resources allocated specifically to
them, although often on a shared basis; intended to be done only once; follow a plan
towards a clear intended end result and often cut across organisational and functional
lines.

An activity that meets the first four criteria above can be classified as a project, and
therefore falls within the scope of project management. Whether an activity is classified
as a project is important, as projects should be managed using project management
techniques.

Common examples of projects include:

· Producing a new product, service or object

· Changing the structure of an organisation

· Developing or modifying a new information system

· Implementing a new procedure or process

Projects are generally considered successful if they meet three specified objectives,
which also known as 'triple constraint' in terms of the following:

1. Scope - this relates to all of the work that needs to be done and all of the deliverables
that constitute the project's success. Scope is closely connected to the issue of quality.

2. Time - this concerns the agreed date for the delivery of the project.

3. Cost - this relates to authorized spend on the project.

A Post Project Review happens at the end of the project and allows the project team to
move on to other projects. It can often be the last stage of the project, with the review
culminating in the sign-off of the project and the formal dissolution of the project team.
The focus of the post-project review is on the conduct of the project itself, not the
product it has delivered. The aim is to identify and understand what went well and what
went badly in the project and to feed lessons learned back into the project management
standards with the aim of improving subsequent project management in the
organisation.

It typically involves:

 Disbanding the team and ‘tying up loose ends’

 Performance review
 Determination of lessons learnt
 Formal closure by the steering committee.

Change management is the application of a structured process and set of tools for
leading the people side of change to achieve a desired outcome. A change is the project,
initiative or solution being introduced in the organization to improve the way work gets
done, solve a problem, or take advantage of an opportunity.

When looking at a change management project, it needs to be looked at it in the context

of two concepts: the change itself and project management.

Change can be related to anything:

Typically this is how it should go, but people resistance is the biggest challenge that
change management projects face.

The post project review is intended to be beneficial to the organisation as it considers

the success of the project by asking the following.

(a) Was the project achieved on time and within budget?

(b) Was the management of the project as successful as it might have been, or were
there bottlenecks or problems?

This review covers:

(i) Problems that might occur on future projects with similar characteristics.

(ii) The performance of the team individually and as a group.

In other words, any project is an opportunity to learn how to manage future projects
more effectively, change management projects even more so.