Companies that successfully innovate also successfully manage change
INNOVATION & CHANGE MANAGEMENT MHN221935-12-A|
Malgorzata Glowacka S0915718
International Tourism & Hospitality Enterprise
Innovation and change management have been and continues to be an important study on a number of levels. It plays significant part in economic growth as well as it is vital for firms’ survival and development. New ideas, new approaches and new products become critical guidelines in organisational strategy, especially for managers and business leaders. According to The Boston Consulting Group (2010) employers’ ranked innovation as a strategic priority with 26% citing it as a top priority and a further 45% ranking it as a top-three priority. Organisations such as Apple or Google adapted this tactic and thanks to their right management of change, now are recognized as one of the most revolutionizing and prosperous companies in the world (Business Week, 2010). It proves that successfully innovating companies are the winners and they play major role in industry market. Therefore, this essay aims to critically evaluate the connection between innovation and change management.
The term of innovation is hard to define as it can mean different things for different people. According to Druker (1985) innovation is the specific tool of entrepreneurs, the means by which they exploit changes as an opportunity. West and Farr (1990) pointed out that organizational innovation can be characterized as a tangible product, process or procedure within company and something what is new to the social setting within which it is introduced although not necessarily new to the individual introducing it. They also exanimated innovation being more intentional rather than accidental, mainly aimed at producing benefit to the organization. Traditional categorizations of innovations divide them into four types (Tidd and Bessant, 2010, Fig1): -product innovation can be a change in the function or feature of a product such as Window Vista replacing XP. This kind of innovation is intended to improve the function of the offering to make sales more likely -process innovation is based on transformations in the ways products/ services are created and delivered like for e.g. online banking system which allows customers to manage their finance. This kind of invention introduces new, or significantly improved, method for production or delivery of output that adds value and better performance -position innovation target changes in market or customer base for a product or service. This kind of strategy change meaning of a product in customer’s eyes like for e.g. four-wheel cars which originally were used for off road work became fashionable family car -paradigm innovations are based on changes in how companies frame what they do; for e.g. Air Canada (the largest airline of Canada with scheduled and charter air transport) launched a discount, new low-cost international carrier in Vancouver (The Globe & Mail,2012)
Fig 1. Types of innovation. Adapted from Tidd and Bessant, 2010
Innovations are often classified as either radical or incremental (Gallouj and Weinstein, 1997). Radical innovations are generally based on a big change in development that modifies the competitive market and it may results in new markets and product opportunities. Good example of radical innovation is Apple with their first PC Lisa which had graphical interface. The innovation, despite its limited success, was universally recognised as being far ahead of the competition and it took years for some of the advanced features of its operating system to be incorporated in competitors’ operating system (Rayna and Striukova, 2009). An incremental innovation is a term used when there was a minor change to an existing technology like for e.g. in case of Apple and their iPod. MP3 players had...