People and Technological Change

People in organisations today often experience efforts to achieve change:

Today’s managers are usually expected to achieve change that will improve the performance of their organisations but this has not always been the case:

The following video provides a short introduction to change management:

In this week of the course we look at people’s motivation at work and the different approaches that might be taken to their management based on beliefs about their motivation. We will look at the two major theories of the management of change: organisational development and emergent theory. Leadership is often argued to be a critical element in successful change management and we will explore the concept of transformational leadership. Finally we will examine how people’s working lives are impacted by information technology with an interview with Caroline Axtell from the University of Sheffield.

Theory X and Theory Y

Douglas McGregor developed Theory X and Theory Y in 1960. It is a theory of approaches to managing people.

In the early 20th century the theory of scientific management was developed. Henry Ford and Frederick Taylor were key exponents of the theory which emphasised the division of planning and execution of work and the specialisation of jobs. In this model organisations featured a small number of people with a high level of skill and a large number of people with a small amount of skill. The role of managers was more clearly defined in this model and work methods were carefully studied and developed to maximise their effieciency. The following video explains scientific management:

By the second half of the 20th century scientific management was being questioned. Hackman and Lawler, writing in 1971, described it as:

“The general expectation of the scientific management approach was that by simplifying jobs, work could be carried out more efficiently, less skilled employees would be required; the control of management over production would be increased; and, ultimately, organisational profits would be increased.”

The Human Relations school argued that scientific management led to sub optimal performance, that it was not the best way to organise work. They argued that jobs should be designed to improve employee motivation, satisfaction and performance. McGregor’s Theory X and Theory Y is part of that approach. Now often seen as overly simplified, its value is in questioning the beleifs about human motivation that lie behind different approaches to work organisation and management. Theory X managers beleive that most people are lazy while Theory Y managers take a more positive view:

Why Does Change Fail and What Can We Do About It?

Statistics suggest that change fails on a regular basis – some studies suggest that as many as 90 % of change initiatives fail. Studies of reasons for change failure are weak and generally say that failure is due to weaknesses in planning or execution or due to lack of competence or commitment.

A recent study by the McKinsey consulting organisation of 3199 global executives found that only one third had achieved a significant improvement in their corporate performance. Those that did set high and clear expectations for their subordinates, engaged the company as whole in the change activity. were highly visible and involved their Chief Executive Officer, engaged in more communication and had good accountability methods. They built on success rather than focused on problems. The following video looks at why change often failes:

Many authors have written about approaches that might be taken to successful change – arguing that they have the one best way. Kanter et al (2009) described 10 commandments for successful change, Pugh (1993) proposed four principles of change while Kotter developed an eight step model in 1996. Many organisations have adopted one of these approaches.

Theory of change has two main themes, organisation development and emergent change. Organisation development approaches seek to carefully plan change in an organisation. They view organisations as integrated systems and plan to change in the system as a whole. They see change as being managed by senior management and requiring support throughout the organisation and being designed to impact organisational performance by aligning organisational systems and people. Organisational development is based on behavioural science knowledge – research that seeks to understand the behaviour of people and organisations.

The following video describes the problems with old approaches to change management:

While this video describes the benefits of a new participative approach:

Emergent theories of change argue that change in organisations does not usually happen in an organised way – it is often less formally controlled, It argues that everyone in the organisation can potentially cause change and good communications can make change easier. Change, it argues, is based on interactions inside the organisation. While leadership still exists in organisations it does not control everything. McGill University’s Henry Mintzberg is strongly identified with this approach:

Types of Change

Three types of organisational change are usually discussed: developmental, transitional and transformational.

Developmental change is focused on the improvement of existing aspects of an organisation. It is typically smaller scale change.

Transitional change  is designed to move the organisation from on state to another. It is usually planned and large scale and most organisational change literature is focused on this type of change.

Transformational change is fundamental – it transforms the organisation so that processes, culture, strategy etc. may be radically different from what they were before the change.

Transformational Leadership

Transformational leadership that can have a radical impact on an organisation is said to require four elements from leaders:

1. Be a role model and respected in the organisation.

2. Inspire and motivate others

3. Have genuine concern for the needs and feelings of followers

4. Challenge followers to be innovative and creative

The literature argues that transformational leadership results in organisations with higher levels of performance and employee satisfaction than other groups. They hold positive expectations of their followers and inspire and empower people to perform at a higher level.

This article further explains transformational leadership and provides a test to assess your transformational leadership capabilities.

Interview With Caroline Axtell

The following interview is with Dr. Caroline Axtell, who researches the impact of technology on people at work.

Part One:

Part Two

Part Three

This post has looked at people and change in organisations.. It considered the approach that managers take to thepeople they manage ith McGregor’s theory X and theory Y. It looked at approaches to managing change and how change happens in organisations with organisation development and emergent theory. We discussed transformational leadership and looked at people and information technology with Caroline Axtell.

Technology Strategy and Innovation

3M is seen as one of the world’s most innovative companies:

Innovation is defined in the following video by participants in the 2010 Lisbon Council:

One of the main theories of innovation is Diffusion of Innovations Theory. It argues that innovations are communicated through channels over time and within a particular social system. People have varying degrees of willingness to adopt innovations – the theory categorises people as follows:

–innovators – venturesome, educated, multiple info sources
–early adopters – social leaders, popular, educated
–early majority – deliberate, many informal social contacts
–late majority – skeptical, traditional, lower socio-economic status
–laggards – neighbours and friends are main info sources, fear of debt
 
The following video explains Roger’s Diffusion of Innovation theory:
 
 
This is also illustrated in the following chart – over time adoption of technology moves from the early adopters to the wider population:
 
Some innovations will be more successful than others and the next chart illustrates the Information Systems Diffusion Variance model. It argies that IS implementation success is as a result of three factors; technical compatibility, ease of use and how much people perceive that they need the product:
 
Disruptive innovation is innovation that helps create a new market and value network. It will disrupt existing markets and displace earlier technology.
 
 
Typically disruptive innovations are not expected by the market. Clayton Christiansen describes disruptive innovation:
 
“Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream”
 
 
The next chart shows the impact of disruptive innovation – first appearing in low quality use areas and accelerating upwards.

The second type of innovation is known as sustaining innovation, It does not create new markets or value networks, evolving existing markets with better value. Typically, companies compete with each others sustaining improvements. Sustaining improvements can be discontinuous or continuous. Christiansen and Raynor describe sustaining innovation in their book “The Innovators Solution”:
 

“A sustaining innovation targets demanding high-end customers with better performance than was previously available… The established competitors almost always win the battles of sustaining technology. Because this strategy entails making a better product that they can sell for higher profit margins to their best customers, the established competitors have powerful motivations to fight sustaining battles. And they have the resources to win.”

The next video discusses the distinction between sustaining and disruptive innovation:

Many people are critical of our innovation record in Canada. They note that Canada has only 1.36 % of global patents while the US has 30 %. In 2009 the Conference Board of Canada gave Canada a “D” for innovation. It is argued that we are bad at turning science into products and that we have a low appetite for risk and that this pervades our culture, private sector, government, financial institutions and education. It impacts our standard of living. Successive governments have sought to encourage companies to invest in innovation but private sector research and development has declined in the recession. Universities are criticised too though the University of Waterloo is lauded for its policy that allows researchers to own the products that they create.

Michael Bloom from the Conference Board discusses the contribution that education and skills development can make to innovation:

Various studies illustrate Canada’s innovation record and rank us versus other nations. The following study from INSEAD, the Global Innovation Index rankings places Canada in 8th place:

PWC argue that government in Canada needs to do more to encourage innovation:

The Coalition for Action on Innovation in Canada, chaired by John Manley, a former government minister, presents a ten point point plan for innovation in Canada:

1. Make R&D tax credits open to public companies and businesses that lose money.

2. Create government-sponsored “co-investment funds” with private investors to finance emerging companies.

3. Adopt the world’s strongest intellectual property regime.

4. Launch pilot partnerships between retired entrepreneur coaches and startups.

5. Enlist more retired executives to help the government dole out R&D funds.

6. Use the federal government’s buying power to spur adoption of new products and services.

7. Set a national target of a 90-per-cent high-school graduation rate and boost master’s and doctoral graduates.

8. Help foreign graduate students gain permanent immigration status.

9. Form a national network to share know-how among existing clusters of innovative companies and industries.

10. Create an independent advocacy group to push innovation by Canadian companies.

Charles Leadbetter has advised the UK government on innovation policy and argues that the internet has changed how innovation will happen – he calls it “We think”:

In a recent TED talk, Leadbetter expands on this theory:

Work has also been undertaken by the Conference Board on the skills that are thought to be required for innovation. They say that we need research that generates new ways of thinking and new knowledge, the ability to apply knowledge and skills, adopt new technologies and processes and adapt to change. The literature is relatively weak in this area and some argue that it is likely to depend on specific industries. The Conference Board’s Innovation Skills Profile details their thoughts on the skills needed for innovation:

The following video asks the question “Where do good ideas come from?” and explores how new ideas develop:

One Million Acts of Innovation is a Canadian organisation that seeks to encourage Canadian organisations to innovate. The following video is an interview with one of their founders, Taimour Zaman:

Finally, Charles Leadbetter undertook a global project to examine innovation in education. The following video provides examples of what we might see in the future:

Putting Technology Into Corporate Planning

Corporate planning allows organisations to review and analyse their current position, examining their internal activities and their external environment. It allows them to create a Strategic Plan which outlines their key business objectives and goals over time and their actions to achieve them. In this video Erica Olsen describes what Strategic Planning is:

Information technology has been increasing in its importance in corporate strategy in many organisations. John Pickett, Principal with the IT Media Group and an experienced and respected IT community advocate, was interviewed for students of the University of Waterloo’s course in the Strategic Management of Technology. John spoke about the relationship between information technology and the business:

This article discusses strategic analysis and strategic planning, highlighting the importance of the careful development of corporate strategy for business success. Strategic analysis develops understanding of where the business is now. Most large businesses frequently evaluate their position and strategic analysis has many methods to assess their current position.  Erica Olsen provides an overview of the typical strategic planning process. A version of this is used by most successful organisations:

There are two types of strategic analysis, external and internal. Audits are used to establish where the business is now. Internal audits use data and information from within the business. Often an outside consultant will be used for this to gain an independent view. External audits use data and information from outside the business analysing areas that will sometimes be outside of the control of the business. The analysis undertaken will influence business decision making.

Internal audits may consider many factors. Productivity of human resources and capital, efficiency using ratio analysis, investment data etc, costs, looking at wastage of resources and opportunities for cost cutting may all be examined, Internal data such as labour turnover, absenteeism, customer satisfaction surveys, quality statisitics, financial data, sales trends and skills audits can all be used. SWOT (Strengths Weaknesses Opportunities and Threats) analysis is used by many organisations. Core competencies are considered to determine what the business is good at. The following video explains the conduct of SWOT analysis:

The following video emphasises the need for consistency in pursuit of a coherent strategic direction and argues that there are only three strategic options for organisations and that a failure to select and focus on one will cause organisations to be “mediocre”:

External audits consider the environment that the business operates in. They might look at inflation, competitiveness, unemployment, growth and consumer spending. They will usually look at competitors with the business, what they are doing and what threats they may provide.

Analysis of PEST factors (Political, Economic, Social and Technological) can feature in external audits and is explained in the following video:

and this is an example of PEST analysis as applied to the music industry:

Exdternal audits will also consider changes in the market for the products or services that the business produces. Is the market growing, stagnant or declining. Is the market share of the business changing? Is future growth possible or is the business at the mature stage. What are the market trends – are there new fashions or potential new market opportunities that the business needs to be aware of? The Boston Matrix is often used to analyse products:

Gaps may exist where there is a market that is not being served.

Strategic planning considers where the business will go in the future, often over a ten year period. Some businesses look further than ten years. Some Japanese companies have strategic plans that look at a one hundred year period. However, not all businesses have strategic plans. Some do not beleive that strategic planning is a worthwhile use of time, but these are a minority. Most businesses executives understand that having a clear strategy that is understood throughout the organisation will guide basic principles for working and making operational day to day decisions.

Strategic planning seeks to identify areas of competitive advantage. It looks at ways to add value to an organisation, considering whether businesses should focus on mass or niche markets, whether a cost based strategy should be used, reducing costs to compete and grow and / or a market based strategy, focused on satisfying consumer needs to create increased demand for the business’ products or services.

Strategic planning will often also include contingency planning – strategies in case things don’t go as planned and growth plans that will look at how the business will grow in the future.

Blackberry are currently enduring difficult times and provide a useful example of the application and importance of strategic decisions. Blackberry was once valued more than the Royal Bank of Canada but it has declined rapidly over the past few years:

BB Share Price

The reasons for Blackberry’s difficulties are outlined in this interview with a journalist from the Wall Street Journal:

The Globe and Mail suggested a couple of years ago that Blackberry had five possible options:

1. Sell the company

2. Break it up

3. Find a partner

4. Become a niche company

5. Stay the course

and their possible options today are summarised in this news item from Global News:

Recently, John Chen, the Blackberry CEO, was interviewed about their turnaround strategy. The interview provided details of elements of their strategic plan and is a good example of strategic plan implementation in practice:

This article has described the strategic planning process that most organisations use today. It has introduced some of the common tools that are used as part of that process and an example of strategic plan implementation in the strategy for the turnaround of Blackberry. It should provide engineers and technologists with awareness of the processes that will be used in the organisations in which they work and help them to participate to ensure that technology plays a valued role in corporate strategy.

 

 

Introduction

This blog supports the course MSci 421 at the University of Waterloo in Ontario, Canada. The official description of the course is:

A critical examination of the conceptual foundation of the strategic management of technology and innovation in established firms. Foundations in strategic management, economics, and organization theory. Contents: technology strategy, technology evolution, standards, learning curve, technology races, first-mover advantages, technology sourcing.

As students complete the course they work on real world projects that apply information technology to business issues. In the 2012 edition of the course the students worked on the design of an information technology enabled condo for a condominium development company, the use of social media by an organisation that encourages innovation in Canadian business, use of social media in the relationship between students and landlords in Waterloo, the information technology strategy for a globally recognised film festival, the use of technology by one of Canada’s largest law firms and the application of social media to help deal with global pharmaceutical shortages.

Information technology is used in the course delivery. Videos were produced with project sponsors to brief the students about their projects and technology, partiularly Skype, is used in communication between the students and the sponsors. Project presentations are delivered online live to the sponsor and recordings provided to them for later viewing.

 This blog is one of a series that supports the author’s courses at the University of Waterloo. The rest are:
 
–Social Media For Business Performance: http://smbp.uwaterloo.ca/
–Impact of Information Systems on Society: http://impactofinformationsystemsonsociety.wordpress.com/
–Operations and Supply Chain Management: http://operationsandsupplychain.wordpress.com/
 
 Topics covered in the course include:
 
Putting technology into corporate planning
Technology strategy and innovation
People and technological change
Information technology and operations
Information technology and supply chain
Information technology and marketing
Information technology and new product development
The learning organisation
Integration
 
The assessment of the course involves the grading of the work that the students do on their projects (60 % of their grade), a mid term essay (20 % of the grade) and four team feedback assignments (5 percent each).
 
The group project is graded individually and the following items are taken into account. A group peer evaluation is undertaken after six weeks of the course and at the end of the course, the project presentations are rated by the whole class and project clients are asked for feedback on the students’ project performance.
 
The mid term assignment requires the students to write an essay on the issues in the involvement of people in technology related change and action that might be taken to improve it.
 
The team feedback assignment is based on presentations that the students make to the class on their projects as they proceed. In the assignment the students are asked to provide feedback to the presenting team on their project and advice on its conduct. Each team will recieve substantial feedback on their project.
 
Communications between the students and their project sponsor will be critical to the project success. Most teams meet weekly with their sponsor and a weekly written progress report is provided to the sponsor andf the course professor. At the end of the project the sponsor receives a wrtitten report and the online presentation, plus any other deliverables that have been agreed with the sponsor.
 
 
 
 
 

The Impact of Technology on Business Blog

This blog has been written for the students of the MSci 421 Strategic Management of Technology and Innovation course at the University of Waterloo. Each posting reflects the content of a lecture for the course  and is intended to allow students to review and digest presented course content more easily and conveniently than a classroom and powerpoint will traditionally allow.

The course also involves the students working on real world projects that involve the use of information technology to drive better business performance. If you are interested in proposing a project for the students please contact me.

The blog is also intended to allow people who are not in the class to access the course content, making the knowledge that exists in the university more accessible to the world. If you are reading the blog and find it interesting or useful or if you wish to take issue with anything that I have said, please post a comment or let me know by sending me an email at pdcarr@uwaterloo.ca

If you found this blog interesting, you might like to take a look at my others:

Social Media For Business Performance: http://smbp.uwaterloo.ca/

Impact of Information Systems on Society: http://impactofinformationsystemsonsociety.wordpress.com/

Project Leadership: http://projectleadershipwaterloo.wordpress.com/

Operations and Supply Chain Management: http://operationsandsupplychain.wordpress.com/

You can also follow me on Twitter: @impactofinfo

Peter Carr, Department of Management Sciences, University of Waterloo, Canada