Read below and look around at your organization, whether your school or workplace. What three ideas can you come up with right away for possible innovations? How would your ideas, if implemented, benefit both the organization and society at large? What are the potential obstacles to getting your ideas implemented? What steps could you take as an "innovation champion" to turn your ideas into real practices?

Reference: Exploring Management by John R. Schermerhorn.

CHAPTER 9 Rum an SIEISyk/Alamy Slack F'hnlo Thought Leadership Analytics Family Values Pressure Organization Cultures Choices #OK Boomer Versus #OK Millennial Ethics Hidden Agendas in Organizational Change Insight Get Comfortable with Tolerance for Ambiguity Issues Good bye High Fives... Hello Elbow Bumps and Emojis Quick Case \"Ghosting\" Has Becomethe Norm on our Remote Working Team Chapter Case Gamiiication: Games Fit the New Corporate Cultures How About It? Have you been in settings where \"go along to get along\" was standard behavior? where do shared expectations like this come from? What can a leader do to avoid the downsides of a culture that reinforces dysfunctional behavior? Organizational Cultures, Innovation, and Change Adaptability and Values Set the Tone \"The ofce is far away. Can it's culture survive? Bosses fear long term rem ole wu rk will lray bonds and kill innovation? Wall aneefJnurnul Career Readiness | \"Go Along to Get Along\" Culture Is 3 Danger Signal \"Don't tell the boss" . . . \"Don't bring it up.\" These are warning signs of what experts call \"a tendency for people in organizations to tell bosses what they want to hear.\" when taking over as General Motors's CEO, Mary Barra had to change what she claimed was a culture ofthe \"GM nud"7agree but take no action, and the \"GM salute? directing responsibility to others and covering up rather than confronting problems. The Wall Street Journal calls this malaise a \"go along to get along\" culture. CHAPTER 9 LEARNING OBJECTIVES 1. Explain the nature of organizational culture. 2. Discuss how organizations supportand achieve innovation. 3. Describe how managers lead the processes oiorganir zational change. 163 X 164 m Organizationalcultures, Innovation,and Change WileyPLUS See Author Video Organizational culture is a system of shared beliefs and values guiding behavior. Strong cultures are clear, well defined, and widely shared among organization mem hers. I Learning Objective 9.1 l Explain the Nature of Organizational Culture. Things to Remember . Organizational culture is the personality ofthe organization. . Organizational culture shapes behavior and influences performance. - Not all organizational cultures are alike. . The observable culture iswhat you see and hear as an employee or customer. - The core culture consists of the underlying values of the organization. . Value-based management supports a strong organizational culture. You probably hear the word \"culture\" a lot. In today's global economy, it's hard not to appreciate the cultural differences between people or nations. However, there's anothertype of culture that can bejust as importantithe cultures of organizations. Just as nations, ethnic groups, and famie lies have cultures, so do organizations. These cultures helpto distinguish organizations from one another and give their members a sense ofcollective identity. A culturerperson fit should be good for both parties. And, how to nd the right t is a real career issue foryou to consider. Organizational Culture Is the Personality ofthe Organization. Think of the stores where you shop, the restaurants where you eat, and the places where you work and enjoy leisure activities. What is the "atmosphere\" like, and does it draw you in or hurry you out? Do you notice how major retailers such as Anthropologie and WilliamseSonoma have store climates that fit their brands and customer identities'.\" These aspects of the internal environments of organizations are important in management. They represent the organizational culture as a system of shared beliefs and values that devel- ops in an organization and guides the behavior of its members.2 Whenever someonetalks about \"the way we do things here," he or she is talking about the organization's culture. Sometimes called the corporate culture, it communicates the personr ality of the organization. And it can have a strong impact on an organization's performance and the quality of work experiences of its members. For example, check out Zappos.com. Its CEO Tony Hsieh has built a fun, creative, and customerrcentered organizational culture. He says that \"the original idea was to add a little fun," and things moved to the point where the notion of an unhappy Zappos customer is almost unthinkable: \"They may only call once in their life,\" says Hsieh, \"but that is our chance to wow them. If we get the culture right most of the other stuff, like brand and the customer service, willjust happen.\"3-\" Organizational Culture Shapes Behavior and Influences Performance. Although cultu re isn't the only d nverofwhat happens in organizations, it'san im portant one. Organr izational culture helps to set values, shape attitudes, reinforce beliefs, direct behavior, and establish performance expectations and the motivation to fulfill them.5 In strong culture organizations, the culture is clear, well dened, and widely shared by members. Does this sound good to you? It can be. But you also have to be careful. A strong culture can have both downsides and upsides. When the strong culture is positive, it supports high performance by forging a good fit between the nature of the business and employees' talents. It discourages dysfunctional behaviors and encourages helpful ones while keeping a clear performance vision front and cenr terto focus employees' efforts. But when the strong culture is negativeilook back to the \"go along to get along\" cultures highlighted in the chapter opening Career Readiness featureiit X Learning Objective 9.1 Explain the Nature of Organizational Culture 165 Choices #OK Boomer Versus #OK Millennial Shaun Jones/Alamy Stock Photo The phrase \"0K Boomer\" went global as a younger generation retort to ideasthey mnsideroutdated or off-base. when something or some- one earns its own memes, you know it has arrived In social culture. "The phrase \"OKBoomer\" has gone global. It has become young generations' retort to ideas they consider outdated or obnse." Eut is this phrasejust alun way to say \"Sure, whatever,\" or is ita step over the line intn being a dismissive insult? In today's \"just say it" and \"woke" culture, there's a risk of toppling teams and organizations into an unhealthy crossfire. Gene- rational mixes on teams and workroroes can become generational divides. Age dif'lerences bring value differences that can create faul- tines in working relationships. It's not easy to put yourself in the shoes oi someone a lot olderor youngerthan yourself. Kashti Khan, age 22, describes having mixed feelings when an older man told her, \"Vou look good today." She says: \"And I'm like, that's such a weird thing to say.\" A consultant on age differences warns that, \"Unless the older generation really lets their ego down and allows the younger gener- ation to come onboard and challenge the way they do things, there's gonna be this disconnect.\" But a vice president forAARP, a nonprot membershipgroup forthe aging,worries thatthe use oflabels likeOK Boomer create discord. She says, \"I have to tell you, I was a little sur- prised by il, because we have a lot or research thatshows how much workers actually like to work to getherno matterthe generation.\" What's Your Take? Are we too quick these days to toss phrases and labels around and not adept enough to just enjoy and benet from cultural dif- ferences? The workplace isalways going to be cross-generational, a microcosm of society at large. We spend lots or time working. Areexchanges uf\"0KBuomer\" and \"OK Millennial" really helpful? Whatresponsibllities do eachof ushave tohelpbulld masterpieces out of generational puzzle pieces? becomes a performance inhibitor. Everyday behaviors reinforced and shared in the culture diss advantage the organization.E Strong and positive cultures don't happen by chance. They are created by leaders who set the tone and are reinforced through socialization.7 This is the process through which new members learn the culture and values of the team or organization, as well as the behaviors and attitudes shared among its members.I Each new Disney employee, for example, attends a care fully planned onboarding program called \"traditions." It introduces the Disney culture by edus cating them on the company mission, history, language, lore, traditions, and expectations. This commitment to employees bound together in a strong culture began with the founder Walt Disney. He once said \"You can dream, create, design and build the most wonderful place in the world, but it requires people to make the dream a reality."9 Not All Organizational Cultures Are Alike. It takes a keen eye to identify and understand an organization's culture. But this understanding can be a real asset to employees and job hunters alike. Who wants to end up in a situation with a bad personrculture fit? Management scholars offer ideas for reading organizational cultures by asking questions such as thesezl\" . How tight or loose is the structure? Do most decisions reect change or the status quo? What outcomes or results are most highly valued? How widespread are empowerment and worker involvement? What is the competitive styleiinternal and external? What value is placed on people as customers and employees? Is teamwork a way of life in this organization? Socialization isthe process through which new members learn the Culture 0f 3 team or organization. Result 3 of 12 166 c HA PT E It 9 Organizational Cultures, Innovation, and Change whom... Main Cu mpunents of Organi- utionalCulture? With a bit of effort, one can easily identify the organizational culture. The mostvisible part is the observable culture. it is shown in the stories, rituals, heroes, and symbols that are part of the everyday life of the organization. The deeper, below-the-suriace part IS the core culture. it consists of the values that influence the beliels, atti- tudes, and work practices among organizational members. Team Culture Authority shared, distributed Teams and teamwork rule Collaboration, trust valued Emphasis on mutual support Hierarchical Culture Authority runs the system Traditions, clear roles Rules, hierarchy valued Emphasis on predictability Entrepreneurial Culture Authority goes with ideas Flexibility and creativity rule Change and growth valued Emphasis on entrepreneurship Rational Culture Authority serves the goals Etciency, productivity rule Planning, process valued Emphasis on modest change m Four culture types found in organizations. A useful way to describe organizational cult es is shown in Figure 9.1. Based on a model called the competing values framework, it identies four different culture types.u Hierarchical cultures emphasize authority, tradition, and clear roles. Rational cultures emphasize process, effi ciency, and slow change. Enirepreneuriol'cultures emphasize change, growth, creativity, and compe- tition. Team cultures emphasize teamwork, collaboration, and trust. How do these organizational culture options sound to you? According to a study by LeadershiplQ, employees are likely to rate entrepreneurial cultures the highest for engagement and motivation and as good places to workPThink about the organizations that are important to youemployer, voluntary, school, and sports teams. Just where in this competingvalues model do their cultures fall? And, importantly, how good is the \"fit\" between that cultureand you? The Observable Culture Is What You See and Hear as an Employee or Customer. Figure 9.2 shows \"observable\" and \"core" aspects of organizational culture. The observable culture can be recognized in stories, heroes, symbols, and rites and rituals. The core culture consists of values and shared beliefs that require a deeper look and understanding.\" But both are important to understand, and both inuence behavior in organizations. OBSERVABLE CULTURE Tales about events conveying core values CORE CULTURE Rites and Rituals Underlying values that identify shared beliefs about Celebration of heroes and events displaying core values People lpast and pre sent) who display the right ways to me values behave Symbols Language and other symbols conveying core values X Learning Objective 9.1 Explain the Nature of Organizational Culture 167 The observable culture is what you see in people's behaviors and hear in their convere sations. It is reflected in how people dress at work, arrange their offices, speak to and behave toward one another, and talk about and treat their customers. You'll notice it not only as an employee, but also as a customer or client. Test this out the next time you go into a store or restaurant. How do people look, act, and behave? How do they treat one another? How do they treat customers? What's in their conversations? Are they enjoying themselves? When you answer these questions, you are starting to describe observable culture. Observa ble culture is also found in the stories heroes, rituals, and symbols that are part of daily organizational life. In the university, it includes the pageantry ofgraduation and honors ceremonies; in sports teams, it's the pregame rally, sideline pep talk, and all the\"thumping and bumping" that take place after a good play. In workplaces, it can be spontaneous celebrations of a work accomplishment or personal milestone such as a coworker's birthday or wedding. And in organizations such as Apple, HewlettePackard, Zap pos, Google, and Amazon, it's in the stories told about the founders and the firm's history. The presence or absence of these observable things and the ways they are practiced can say a lot about an organization's culture. They represent, communicate, and carry the culture over time, keeping it visible and clear in all members' eyes. New members learn the organization's culture through them, and all members keep the culture alive by sharing andjoining inthem. The Core Culture Contains the Underlying Values of the Organization. In the iceberg metaphor of organizational culture, what lies below the surface is called the core culture, consisting ofthe core values or underlying assumptions and beliefs that shape and guide people's behaviors. Positive examples include performance excellence, The observable culture is what you seeand hearwnen walking around an organization. The coreculture is found in the underlying ualues of the organization. Corevalues are beliefs and values shared by organization members. Issues Goodbye High Fives... Hello Elbow Bumps and Emojis martin-d m/E+/Getty images In pre-Covid-19 days, \"high fives\" and "handshakes" and \"bro hugs\" were common celebratory and bonding behaviors. And we generally liked them, But things changed with the advent of social distancing and more remote working. Re tie archers lmlr rituals with i'nt'i'e riseo' employee in L'olL-'e merit and ohigher :ieme ui'mnnecti'an nmong team members: When was the last time you shared even a fist bump with a coworker? Manyperhaps mostpeople are afraid to even try, given fears that range from virus contamination on the one hand to #Me'foo concerns on the other. How do you relate to \"thumbs up" and \"happy face\" emojis during online chats and video meetings? Do they really replace the face-to-face interactions you're used to, and help to create and reinforce an emotional bond? Most of us follow rituals. . ,leelgood, confidence-building, stressreducing rituals. Think of the softball player who tight- ens and retightens her batting gloves before each pitch. when ritu- als move into the office, they are linked With increased employee involvement and a higher sense of connection among team mem- bers. They are part olthe gluethat gives organization cultures per- sonalities and holds them together. All ofthis is changing under the influenceol the pandemic's new normal. How About It? Are celebratory rituals really that big a part of organizational cultures? Wilat are you comfortable with as bonding behaviors in an office environment? Suppose you get a \"shoulder bump\"is that okay, or is it a step too far into your personal space? What can team leaders and managers do now to encourage celebra- tion, camaraderie, and engagement? How can you make rituals part ofthe team culture under socialdistancing? How can they be transferred into virtual space and remote working situations? Result 3 of 12 > 163 c HA PT E ll 9 Organizational Cultures, Innovation, and Change Value-based management actively develo p5, co mmu nicates, and enacts shared values. innovation, social responsib ty, integrity, worker involvement, customer service, and teamwork.\" It's common to find values statements on corporate websites, in mission statements, and in executive speeches. Here are some examples: Whole Foodsi'freating ongoing winewin partnerships with our suppliers" . . . UnderArmouri\"Innovation, Inspiration, Reliability and Integrity" . . . Teslai\"the best electric car and electric power trains in the world\" . . . Honest Teai\"We strive to live up to our name in the way we conduct our business."'5Nice, we might say. Butdon't be fooled by values statements alone when trying to understand an organizar tion's core culture. It's easy to write a set of values, post them, and talk about them. It's much harder to live up to them. If an organization's stated values are to have positive effects, everyone in the organiza tion from top to bottom must know the values and live up to them in daystosday actions. It's in this sense that managers have a special responsibility to \"walk the values talk\" and make the expressed values real. After all, how might you react ifyou found out senior executives in your organization talked up values such as honesty and ethical behavior but were known to spend company funds on expensive private parties and vacations? Value-Based Management Supports a Strong Organizational Culture. SITUATION: After making a big investment in a new deodorant, founder Tom Chappell of Tom's of Maine learned that customers were very dissatisfied with it. He quickly decided to reimburse cus tomers and pull the productfrom the market, even though it would cost the company more than $400,000.10m had founded the company on values of fairness and honesty in all matters. Rather than trying to save costs, he did what he believed was the right thing.\" When managers practice the core values, model them for others, and communicate and reinforce them in all that they do, this is called value-based management. That's what Tom Chappell displayed in this situation. His decision to reimburse customers and pull the product lived up to the company's values and set a positive example for others to follow. And it set Cultures workers and their families: Family Values Pressure Organization Ariel Skelleyj'ihe image Eank/Geny Images The pressure is on organizations to pay more attention to family associated with remote working? on you see an oppununity values and the work~life balance issues faced by their employees here for employers to accept and respect the family realities Talk to friends and relatives to check facts such as these about US. of employees? What can employers do to help remote workers 75% of employed millennial; are couples who both work full- time; for mu pies overall the figure is 43%. 43% of workers have a child younger than lBliving at home. 35% of workers provide care for their parents. 13% of families are supported soley by working mothers. Now add remote working to the mix of pressures and stresses. After just a few months into the Covid-l') crisis over 50% of remote work- ers in one survey said they felt less connected to their employers. Lots ofthings are beingtried to iillthe gaps, from virtualwater cool- er sessions to guided meditation times to online Trivia games. But the questions are still there. . . what about our culture? .what 7 . . ,what about innovation? what ahoutthe per- ahout camraderi sonal connecti n? Vow Interpretation? What organizatlonal culture issues are raised by family stresses find reasonable worklife balance? X Learning Objective 9.1 Explain the Nature of Organizational Culture 169 an enduring precedent. When employees faced difficult situations and dilemmas, they could check their behavior by asking this important valuesquestion: What would Tom do? The notion of workplace spirituality is sometimes discussed along with value-based management. Although the first tendency might be to associate the term \"spirituality" with religion, it is used in managementto describe practices that enrich people's lives by bringing meaning to their work and helping engage each other with a sense of shared community." A culture of workplace spirituality will have strong ethical foundations, recognize the value of individuals and respect their diversity, and focus efforts on meaningful jobs that offer real value to society. Anyone working in a culture of workplace spirituality should derive pleasure from knowingthatwhat is being accomplished is personally meaningful, cre ated through community, and valued by others. Anyone who leads a culture of workplace spirituality values people by emphasizing meaningful purpose, trust and respect, honesty and openness, personal growth and development, workerrfriendly practices, and ethics and socialresponsibility. Study Guide Learning objective 9.]. Explain the Nature of organizational Culture. Terms to Define Core culture Organ\" ational culture Valuerbased management Core values Socialization Workplace spirituality observable culture Strongcultures Rapid Review . Organizational culture is a climate olshared values and beliefs that guides the behavior of members; it creates the character and personality of the organization and sets its performance tone. . The observable culture is found in the everyday rites, rituals, stories, heroes, and symbols of the organization. . The core culture consists ofthe core values and fundamental beliefs on which the organization is based. - Value-based management communicates, models, and reinforces core values throughout the organization, - Symbolic leadership uses words, symbols, and actions to communicate the organizational culture. Questions for Discussion 1. Can an organization achieve success with a good organizational design but a weak organizational culture? 2. When you are in your local bank or any other retail establishment as a customer, what do you see and hear around you that identifies its observable culture? a. What core values would you choose ifyou were creating a new organization and wanted to establish a strong performance-oriented culture? Be Sure You Can - explain organizational culture as the personality olan organization describe how strong cultures influence organizations dene and explain the process of socialization distinguish between the observable and the core cultures explain value-based management explain symbolic leadership Career Situation: What Would Vou Do? You have two really good job arrers and will soon have to choose between them. They are both in the same industry, but you wonder which employerwould be the \"best fit\" for you. Make a list of the key aspects of the cultures ofthese organizations that you would investigate to help make youriob choice. Why are these aspects oforganizational culture important to you? Workplace spirituality involves practices that create meaning and shared community among organizational members, Q 110 c HA PT E It 9 Organizational Cultures, Innovation, and Change Wi leyF LUS See Author Video Innovation is the process of developing new ideas and putting them into practice. Process innovations result in betterways ofdoingthings. Product innovations result in new orimproved goods or services. Business model innovations result in ways for firms to make money. Green innovation or sustainable innovation reduces the carbon footprint of an organization or its products. I Learning Objective 9.2 I Discuss How Organizations Support and Achieve Innovation. Things to Remember . Organizations pursue process, product, and business model innovations. 1 Green innovations advance sustainability goals. : Social innovations seek solutions to important societal problems. . Commercializing innovation turns new ideas into salable products. - Disruptive innovation uses new technologies to displace existing practices. . innovative organizations share many common characteristics. The iPad, Kindle, Postrit Note, Super Soaker Water Gun, ATM, streaming movie and video game rentals, overnight package delivery, and more. Name your favorites! These examples are all brought to us through innovation, the process of developing new ideas and putting them into practice.\" The late management consultant Peter Drucker called innovation \"an effort to create purposeful, focused cha nge in an enterp rise's economic or social potential.m Today's organizations and entrepreneurs thrive on cultures of innovation. Organizations Pursue Process, Product, and Business Model Innovations. Innovation takes different forms. Process innovations create better ways of doing things. Product innovations create new or improved goods and services. Business model innovae tions create new ways of making money.\"7 Consider these examples: . Process innovationisouthwest Airlines streamlines operations to fit its lowecost business strategy; IKEA sells furniture and fixtures in assembleriteyou rself kits; Amazon's \"onerclick\" option makes online shopping easy; Nike lets customers design their own sneakers. - Product innovationiApple introduced the iPod, iPhone, and iPad and made the \"app" a \"must have\" for smartphones and tablets; Amazon brought us the Kindle ebook reader and Alexa; Snapchat, Instagram, Twitter made social media a part of everyday life; and Uber made rideesharing an easy taxi alternative. . Business model innovationiNetix turned movie rental into a subscription business; eBay profits by connecting users of its online marketplace; Zynga made paying for \"extras" profitable with free online games; Salesforcetom introduced cloudrhased software as a service. Green Innovations Advance the Goals of Sustainabi ty. Green innovation, or sustainable innovation, is an important addition to the prior list of innovation types. It advances sustainability by creating ways to reduce the carbon footprint of an organization or its products. Look for them in areas such as energy use, water use, package ing, waste management, and transportation practices, as well as in new product development. Replacing air travel with videoconferencing not only reduces travel costs but it also reduces carbon emissions. Getting energy from biogas or solar energy cuts electricity costs and reduces air pollution. Recycling used garments and reweaving the fibers into new clothing helps save energy and lower carbon emissions.\" Learning Objective 9.2 Discuss How Organizations Support and Achieve Innovation 1.11 Social Innovations Seek Solutions to Important Societal Problems. Although the tendency is to view innovation in an economic business context, 5 important to remember that it applies equally well to societal issues such as poverty, famine, literacy, and disease. Social innovation is business innovation driven by a social conscience. It is spears headed by social entrepreneurs who take risks to pursue creative ways to solve pressing social problems.22 Peter Drucker was an early and vocal champion of this notion. \"Every sin gle social and global issue of our day," he said, \"is a business opportunity in disguise.\"23 His message is still applicable today. Dipak C. Jain, respected scholar and dean, says that business schools \"should be producing leaders of real substance who put their knowledge to work in ways that make the world a better place?\" Commercializing Innovation Turns New Ideas into Salable Products. Whatever the goalnew product, improved process, unique business model, better sustain- ability, or social problem solving, the innovation process begins with inventionithe act of discove ryiand ends with applicationithe act of use.15 The business process of commercialize ing in novation turns new ideasithe inventionsiinto actual products, services, or processesi the applicationsithat generate profits.25 3M Corporation, for example, owes its success to the imagination of employees such as Art Fry. He's the person whose creativity turned an adhesive that "wasn't sticky enough\" into the product known worldwide today as Post-it Notes. It's tempting to believe that commercializing an innovation such as the Posteit Note is easy. You might even consider it a \"no brainer.\" But it isn't. Art Fry and his colleagues had to \"sell\" the Posteit Note idea to 3M's marketing group and senior management. It took quite some time before they obtained the nancial support needed to tu rn theirinvention intoa salable product. Figure 9.3 shows how new product ideas such as Posteit Notes might move through the typical steps of commercializing innovation. One of the newer developments to pass through this process is called reverse innovation or trickleeup innovation. The concept got its start in the world of global business when firms stopped viewing innovation as something only done \"at home" and then transferred to \"foreign or emerging markets.\"27 eiexper entat n Sharing the idea with others and testing it in prototype form Idea creation Feasib ty determination Testing the practicality and financiai viability of the new product COM M ERCIALIZING Discovering a potential product or way to modify an existing one INNOVATION Final application Commercializing the product for sale to customers or ciients m How Do Organizations Commercialize Innovation? In business, it is the process of com mercializing innovation that turns new ideas into actual products, services, or processes that can increase prots through greater sales or reduced costs. This requires management encouragement and supportfor idea creation iinvention and the act at discovery), experimentation and feasibility determina- tion, and final application (actually putting the tested idea into use). Social innovation is business Innovation driven by a soclal conscience. Social entrepreneurs take risks to pursue innovative ways to solve pressing social problems. Commercializing innovation Is the process ol turning new Ideas into applications that generate profits. Reverse innovation recognizes the potential forvaiuabie innova tions to be launched lrom Iower organizational Ievels and diverse locations, including emerging markets. Result 3 of 12 > 112 c HA PT E It 9 Organizational Cultures, Innovation, and Change Disruptive innovation creates products or services thatbecome so wid ely used that they largely replace prior practices and Management scholar C. K. Prahalad goes so far as to call these costrco nscious markets \"labs oratories for radical innovation.\" Disruptive Innovation Uses New Technologies to Displace Existing Practices. Attimes, the innovation process is so successfulthat disruptive innovation occurs. Harvard scholar Clay Christensen defines it as the creation of an innovative product or service that starts out small scale and then moves \"up market\" to where it is so widely used it displaces prior practices and competitors.'5Historical examples include cellular phones that disrupted corn petitors, traditional landlines and discount retailers that disrupted fullrline department stores. The impacts of technology and innovation are evident everywhere you look and, literally, everywhere you areiat work, at home, at play. But whereas innovation used to be remarks able, ident' ' ble, and a longrlasting event, technology is now moving so fast that the time line of innovation is greatly compressed. And with it, disruption has shifted From a gradual to a fastrpaced and almost realrtime force. The old adage of "here today, gone tomorrow" is a very accurate label. Online erretailers have disrupted brickrandrmortar stores, while online video gaming and movie and music streaming have disrupted \"buy and own" business models. Now, electric vehir cle technologies are disrupting traditional internal combustion markets. Even your college or Qu ck Case \"Ghostirig\" Has Become the Norm on our Remote Working Team \\ Dbradovic/iSLock/Geuy images It was good to be contacted for a new gig. I had been out of work for two months and iinally got the call to join a visual effects lilm project. Working remotely from home has been great and l'm en- joyingtl'ie scenes that come my way. The team is quite large, wtth over twenty of us scattered around the country. Everything went really well in the early stages. Now we're al- most three months in and the daily and weekly task deadlines are getting tough. This is common with a movie project. but normal- ly we're all together in the studio and share both the tensions and the long hours. Things have taken an interesting turn In the remote work setting. Something we call "ghosting\" has set in where people we call \\ hash g " hus se n where people are worki 9 more hours than they are on y in order to hit their targets andlook good for the employ are working more hours than they are booking in order to hit their targets and look good for the employer. When we worked together In the studio and clocked in and out, all hours were counted and paid forincluding overtime. Now that ghosting has spread throughoutthe remote team, most. perhaps all. or us are notcharging lorall hours worked. My chats with good riiends on the team indicate that not everyone is happy with how things are gol rig, yet they also feelthey don't have anycholce but to do their own ghosting. Withjobs being scarce no one wants to look bad and risk not getting hired for future projects. As for me, I'm just hall P)' to have a job and my pride won't let me do less than quality workanyway. Everyone on theteam has just received a requestlrom our proj- ect leader to provide feedback on the remote working situation and offer ideas lor howthings can be improved in the luture. I believe the request is sincere. Remote work is here to stay in our industry and everyone, employers and employees alike, has to figure out how to do it well. I would really like to bring up the ghosting issue as part of my feedback on the ups and downs ofremote working. Whll Do Von Do! Should I address ghosting behavior in my feedback, or is there too much risk for me - a gig worker in a bad economy? Should I send out some messages and encourage others to join me in addressing ghostingin ourreedbeehz How (on anyone workin g at the bottom of the pyramid get risk-free management attention with the hope or changing a practice like this? Why would the employer in this case have anything to gain by addressing the ghosting practices ratherthan turninga blind eye? Result 3 of 12 > Learning Objective 9.2 Discuss How Organizations Support and Achieve Innovation 1.13 university faces disruptive threats from the availability of certificate programs in specialized areas like data analytics and software development. The same applies to free and lowecost online courses that challenge the cost and value of traditional on-campus learning. What is on your list for the next great disruptor of established products or business prace tices? What will come next as artificial intelligence and robotics continueto fundamentally dis, rupt the nature of work as we know it? Are you staying on top of this innovation curve and really preparing yourself for what the future might hold in respect to new or disappearing career opportunities? Innovative Organizations Share Many Common Characteristics. Do you view Microsoft as a firm whose strategy and culture drive an innovation powerhouse? Or do you see what PC Worid once described as \"a stodgy old corporation churning out boring software"?\"' Microsoft's CEO certainly wants to the company to fit the former description, not the latter. Truly innovative organizationsifrom large corporations such as Ap ple and Amazon to small startrupsitend to share features such as those shown in Figure 9A.\" In highly innovative organizations, the corporate strategy and culture embrace innovation. The strategies of the organization target innovation and the culture of the organization values an innovation spirit. If you go to the website forthe design firm IDEO, you'll find this descrip- tion: \"Our values are part mad scientist (curious, experimental), bearrtamer (gutsy, agile), reiki master (handseon, empathetic), and midnight tax accountant (optimistic, sawy). These quale ities are reflected in the smallest details to the biggest endeavors, composing the medium in which great ideas are born and flourish.\"2 There's little doubt that core values at IDEO encoure age innovation and allow new ideas to flourish. In highly innovative organizations, organization structures supportinnovation. Bureaucracy is the enemy of innovation. Innovative organizations take advantage of organic designs and team structures that empower people and eliminate cumbersome bureaucratic ways. Busir nessweek says: \"Instead of assembly line, think swarming beehive. Teams of people from dif ferent disciplines gather to focus on a problem. They brainstorm, tinker and toy with different approaches.\"E The term skunkworks is sometimes used to describe special work units set free from the formal organizational structure and given separate locations, special resources, and their own managers, all with the purpose of achieving innovation. In highly innovative organizations, stafng buiids taient for innovation. Step 1 in meet, ing this goal is to make creativit mportant when hiring and moving people into positions of responsibility. Step 2 is allowing their creative talents to fully operate by inspiring and empow- ering them by the practices just discussedistrategy, culture, and structure, as well as the right leadership. In highly innovative organizations, leadership drives innovation. Sometimes leadership support for innovation is policy driven. Google,for example, gives engineers freedom to spend 20% of their time on projects of their own choosing. Other times, this support is style driven. Innovation leaders not only encourage new ideas, but they also tolerate crit sm and differ- ences of opinion. They know that success doesn't always come in a straight line and admit that mistakes are part of the innovation process. when talking about the firm's innovative elecr tronic reader, the Kindle, Amazon's CEO Jeff Bezos said, \"Our willingness to be misunderstood, our longeterm orientation and our willingness to repeatedly fail are the three parts of our cule ture that make doing this kind of thing possible.\" Culture Structu res Staffing values support builds talent innovation innovation for innovation m Characteristics oi Highly Innovative organizations. Skunkwurks are special creative units set free from the normal structure forthe purpose of innovation. Q 114 c HA PT E II 9 Organizational Cultures, Innovation, and Change Wi IeyPLU 5 See Author Video Learning Objective 9.2 Discuss How Organizations Support and Achieve Innovation. Terms to Define Businessmodel innovation innovation Skunkworks Commercializinginnovation Process innovations Social entrepreneurs Disruptiveinnovation Product innovations Socialinnovation Green innovation Reverse innovation Sustainable innovation Rapid Review - Innovation is a process that turns creative ideas into products or processes that benefit organizations and their customers. . Organi lions pursue process, product, and business model innovations. . Organi tions pursue green innovations that support sustainability. - Organizations pursue social business innovations to tackle important societal problems. . The process of commercializing innovation turns new ideas into userui applications. . Highly innovative organizations tend to have supportive cultures, strategies, structures, stafng, and top management. Questions for Discussion 1. Are there any potential downsides to making organizational commitments to green innovation? 2. what are the biggest trouble points In a large organization that might prevent a great idea lrom becoming a commercialized innovation? 3. What difference does a leader make in terms of how innovative an organization becomes? Be Sure Vou Can - discuss differences among process,product, and business modelinnovations - explain green innovation and social business innovation . list five steps in the process of commercializing innovation - list and explain fourcharacteristics ofinnovative organizations Career Situation: What Would You Do? Take a look around your present organization, be it a school or workplace. What three ideas can you come up * right away forpossible innovations? How would your ideas,if implemented, benetboth the orga- niza n and society at large? What are the potentialobstacles to getting your ideas implemented? What steps could you take as an \"innovation champion\" to turn your ideas into real practices? Learning Objective 9.3 I Describe How Managers Lead the Processes ofOrganizational Change. Things to Remember . Organizations and teams need change leaders. . Organizational change can be transformational or incremental. - Planned change includes unfreezing, changing, and refreezing phases. . Times of complexity require improvising duringthe change process. - Managers use force-coercion, rational persuasion, and shared powerchange strategies. . Change leaders identify and deal positively with resistance to change. X Learning Objective 9.3 Describe How Managers Lead the Processes of Organizational Change 1.15 Change sum- qua leaders mun-gen - Condent of ability I Threatened by . willing to take mm m Gil-le _ change \"SIG and creativity. avoid . Bome'ed by . Seize opporlunily gamma \""1 ' imd even ' uncertainty - Expect surprises sum-art hum-HM discourage . Prefer predictability - Make things I Support the status happen qua - Wait for things to happen m Change leaders versus sums qua managers. What ifthe existing structure or culture of an organization is flawed, doesn't drive high perfore mance,and in generalcauses problems? What if you hit a major crisis and something like Covidrlg wreaks havoc with your business? Just \"change things," you might say. The fact is that we use the word \"change" so much that the tendency may be to think changing things is easy, even roue tine. But that's not always the case.35 FormerBritish Airways CEO Sir Rod Eddington once said, for example, that \"altering an airline's culture is like trying to perform an engine change in flight.\" Organizations and Teams Need Change Leaders. Just look at the business news. It's not just crisis times that call for change. You'll always find firms that are struggling, and it's not always because they don't have the right ideasiit's because theyand their employees and membersaren't adapting well to new circumstances. In otherwords, they have difficulty creating organizational change. There are times when mane agers at all levels have to be change leaders and take initiative to change the existing pattern ofbehavior of another person or social system.\" Change leaders make things happen even when inertia has made systems and people reluctant to adopt to new ways. They are alert to cultures, situations, and people needing change; open to good ideas and opportunities; and ready to support the implementation of new ideas in actual practice. But the reality described in Figure 9.5 shows a big lference between true change leaders and status quo managers. All too often, people in organizations have major tendencies toward the status quoiaccepting things as they are, not wanting to change, and expecting to revert to established ways even after major shocks to the system. And it's this embracement of the status quo that creates lots of difficulties when managers need to push organizations and teams to innovate and adapt to changing times. Organizational Change Can Be Transformational or Incremental. Changes led from top levels are likely to be large-scale, strategic, and frame breaking. They are repositioning changes targeting big issues that affect the organization as a whole. We call this transformat' rial change. It is supposed to result in a major and comprehensive redirectionia new vision, new strategy, new culture, new structureJ and even new people.\" Transformational change is intense, stressful, and difficult to achieve. Many largerscale change efforts fail, and the main reason is bad implementation." One of the most common implementation mistakes is management failure to build commitment so everyone accepts and works hard to accomplish change goals.'n Instead of setting the stage for change and get, ting key people onboard before the process begins, they just \"order and hope." Popular advice to wouldrbe leaders of largerscale changes includes the following guidelines" . Establish a sense of urgency. - Celebrate shorteterm wins. . Createand communicateachangevision. - Celebratethosewhohelp. . Formaleadingcoalition. - Keepsellingthevision. . Empower others to drive change. - Be the change champion. Achange leader tries to change the behavior ofariother person or social system. Transformationalcllange results In a major and comprehensive redirection foran organization. Result 3 of 12 > 116 c HA PT E It 9 Organizational Cultures, Innovation, and Change lncrementalchange bends and adjusts existing ways to Improve performance. Unfreezingistbe phaseduring which a situation is prepared for change. changing isthe phasewhena planned cha nge actually ta kes place. Strategic, large-scale changes to reposition organization in its environment Major changes to improve performance through new structures, systems, technologies, products, and people Small-scale changes to fine tune performance, enable short- term gains, and provide continuous improvements in operations m The Dry nizatio rial change pyramid. The organizational change pyramid shown in Figure 9,6 displays a modest and framerbending side to organizational change. It deals with ongoing adjustments in struce tures, systems, technologies, products, and stafng. This is incremental change that tweaks and nudges people, systems, and practices to better align them with emerging problems and opportunities. The intent here isn't to break and remake the system but to build on existing ways of doing things with the goal of doing them better. Common incree mental changes involve new products, processes, technologies, work systems, and human resource approaches. Don't, by theway, getthe idea that incremental change is inferiorto transformational change. Organizations are most successful when they put the two together.\"Think of it this way. Incre- mental changes keep things tuned upelike a car engine, in between transformationsiwhen the old car is replaced with a new one. Planned Change Includes Unfreezing, Changing, and Refreezing Phases. Managers seeking to lead change in organizations can benefit from a simple but helpful model developed bythe psychologist Kurt Lewin. Shown in Figure 9.7, it describes how change situe ations can be analyzed and addressed in three phases: unfreezjngipreparing a system for change; changingimaking actual changes in the system, and refreezingistabilizing the system after change.'3 Unfreezing is the stage in which managers help others to develop, experience, and feel a real need for change. The goal here is to get people to view change as a way to solve a problem or take advantage of an opportunity. Some might call this the \"burning bridge\" phase, arguing that to get people tojump o'a bridge, you mightjust have to set it on fire. Managers can sime ulate the burning bridge by engaging people with facts and information that communicate the need for changeenvironmental pressures, declining performance, and examples of alte rna- tive approaches. And, as you have probably experienced, conflict can help people to break old habits and recognize new ways of thinking about or doing things. The cha nging phase iswhere actualchange takes place. ldeally,these changesare planned in ways that give them the best opportunities for success, having maximum appeal and posing X Learning Objective 9.3 Describe How Managers Lead the Processes of Organizational Change 1.17 This is done by: - Establishing a good relationship with the people involved. - Helping others realize that present behaviors are not effective. - Minimizing expressed resistance to change. PHASE 1 Unfreezing Change leader's task: implement change- This is done by: - Identifying new, more effective ways of behaving. - Choosing changes in tasks, ople, culture, technology, structures. I Taking action to put these c anges into place. PHASE 2 Changing Change leader's task: 5 This is done by: - Creating acceptance and continuity for the new behaviors. - Providing any necessary resource support. - Using performance-contingent rewards and positive reinforcement. PHASE 3 Refreezing minimum difficulties for those being asked to make them. Although this phase should follow unfreezing in Lewin's model, he believes it is often started too early. When change takes place before people and systems are ready, the likelihood of resistance and failure is much greater. In this sense, Lewin might liken the change process to building a house: You need to put a good foundation in place before you begin theframing. The final stage in the planned change process is refreezing. Here, the focus is on stable lizing the change to make it as long lasting as needed. Linking change with rewards, positive reinforcement, and resource support all help refreezing. Of course, in dynamic environments, there may not be a lot of time for refreezing before things are ready to change again. You may well find that refreezing in Lewin's sense probably gives way to an other phase of evaluating and reassessing. In other words, we begin preparing for or making more change even while trying to take full advantage of the present one. Times of Complexity Require Improvisation during the Change Process. Lewin's threeaphase model gives the impression that change is a linear, stepabyastep process with clear beginning and end points. But the complexity facing organizations introduces an important reality: Change is dynamic and ongoing, and its outcomes may be uncertain and transitory. Change leaders often deal with the change phases simultaneously, and new changes may begin before refreezing ever takes place. This complexity creates a need for improvisar tional change, where change is an ongoing process and adjustments are continually made as changes are being implemented.\" Consider the case of bringing new technology into an organization or work unit. A technologythat is attractive in concept may appear complicated to new users. The full extent of its benefits or inadequacies may not be known until it is tried. To succeed in these situa tions, a change leader should continually gather feedback on how the change is going and then improvise to adjust the new technology to meet usersI needs. And, while this change is underway, another neweror related technology may emerge that places further demands on change leadership. FIGU RE 9.7 What Are the Change Leader Respons ties in Lewin's Three Phases of Planned Change! Kurt Lewin Identified three phases of the planned change process. The first is unlreezing, where people open up and become receptive to the possibility of change. The second ls changing.where real change happens. Third is refreezing, where changes become part of everyday routines, Lewin believed that change agents often neglect unfreezlng, thus setting the stage for change failuresThey may also neglect refreezing, with the result that any achieved change has only temporary effects. Refreexing is the phase atwhlch change is sta bilized. Improvisatiunalchange makes co ntinual adjustments as cha nges are beinginnplernented, Result 3 of 12 > 113 c HA PT E II 9 Organizational Cultures, Innovation, and Change A force-coercion strategy pursues change through formal authority and/or the use of rewards or punisnmenls. A rational persuasion strategy pursues change through empiri- cal. data and rational argument. A shared power strategy pur- sues change by participation In assessing change needs, values, and goals. Change Strategy Power Bases Managerial Behavior Likely Outco mes Faster. but low Legitimacy Direct forcing . and unilateral action commune\" and."ly Rewards temporary compliance Political maneuvering Punishments and indirect action Expertise informational efforts using credible knowledge. demonstrated facts, and logical arg ument Reference Participative efforts to share power and involve others in planning and implementing change Slower. but high commitment and longer- term internalization What Happens when a Change Leader Uses Dilferent Types of change Strategies! Force-coercion strategies use authority, offers oi rewards, and threats oi punishment to push change forward. The likely outcomeis, at best,temporary compliance. Rational persuasion strategies use information,facts, and logic to present a persuasive case in supportol change. The likely outcomes are com pliance with reasonable cpmmitme nt. Shared power strategies allow others to participate in the change process. from initial planning through implementation. The likely outcomes are more internalization and greater commitment to change. Managers Use Force-Coercion, Rational Persuasion, and Shared Power Change Strategies. How does a manager or team leader actually move people and systemstoward change? The answer in Figure 9.8 shows three common approachesforce coercion, rational persuasion, and shared power. Each should be understood and most likely used by all change leaders." A to rceecoercion strategy uses the power bases of legitimacy, rewards, and punishments as the primary inducements to change.\" It comes in two forms. In a direct forcing strategy, the change agent takes direct and unilateral action to command that change take place. This involves formal authority or legitimate power, offering special rewards, and/or threatening punishment. In politicalmaneuvering, the change agent works indirectly to gain special advan- tage over others to force the change. This involves bargaining, obtaining control of important resources, forming alliances, or grantingiavors. Most people will probably respond to force coercion with tempoiary compliance. They'll act in a limited way and only out of fearof punishment or hope for a reward. But the new behavior continues only as long as the possibl as for rewards and punishments exist. This is why force coercion may be most usefulas an unfreezing strategy. It can help to break people from old habe its and try new ones that eventually prove valuable enough to be seliesustaining. The rational persuasion strategy seeks to bring about change through persuasion hacked by special knowledge, information, facts, and rationalargument. The likely outcome is compliance with reasonable commitment. This is actually the strategy that you learn and prac- tice in schoolwhen writing reports and making formal presentations on group projects. You'lldo a lot of rational persuasion in the realworld as well. But, as you probably realize, success with this change strategy depends on having very good facts and informationithe rational partiand than being able to communicate them wallithe persuasion part. The rational persuasion strategy works best when the change agent has credibility as an expert. This credibility can come-from having special information or a reputation as an expert. It can also be gained from bringing in external consultans or experts, showing case examples or benchmarks, and conducting demonstration projects. Ford, for example, has sent managers to Disney World to learn about customer loyalty, hoping to stimulate them to lead customerservice initiatives of their own." In this sense, the power of rational persuasion is straightforward: If it works for Disney, why can't it work for Ford? A shared power strategy engages people in a collaborative process of identifying vale ues, assumptions, and goals from which support for change will naturally emerge. Although slow, the process is likely to yield high commitment. Sometimes called a normative reedue coti've strategy, this approach relies on empowerment and participation. The change leader X Learning Objective 9.3 Describe How Managers Lead the Processes of Organizational Change 1.19 Eth cs Hidden Agendas in Organizational Change -Jl Roi) Lewlne/Media Bakery sharing power is a popular choice when implementing a change strategy. It means allowmg others to have a decisionmaking role and be involved throughoutlhe change process. This approach can generate a lot of good ideas and helps to establish all-important \"buyin\" to support change. But suppose the ideas offered and the ensuing conversations move in a direction that top management me managers use deception to avol losing Inuence w the appearance ofsharlng powe Some managers are afraid of losing influence while sharing power during organizational change. So, they resort to hidden agendas. They handpick key members to be on their change teams. They also ask them to take prominent roles in discus- sions and support the \"right" ideas. The goal is to make sure that change heads in the predetermined "preferred\" direction while still giving everyone a sense of being included and em- powered. It's a very political way of appearing to share power enjoyingthe imagerelated benefits of inclusiveness but still get- ting your way. Your Decision? What are the ethical issues involved here? As a manager, would you handpick the leaders of a change effort to get your way, even if that meant that alternative points of view were likely to he excluded from the process? What ir your boss sele(ted you to represent your department on a task force just because you agreed with his or her favored approach? If you knew that most or your coworkers disagreed, would you do what your boss wanted you to do? Or, would you try to represent the wishes of the majority of your coworkers? What are the risks of sharing power on the surface while keeping power for yourselr in private? thinks is wrong? What happens then? engages others as a team to develop consensus to support change. This requires being comfortable and confident in allowing others to influence decisions that affect the planned change and its implementation. Because it entails a high level of involvement, this strategy is often time consuming. But shared power can deliver major benefits in terms of longerslasts ing and internalized change. The great strength of the shared power strategy lies with unlocking the creativity and experience of people in the system. Still, many managers hesitate to use it for fear of losing con trol or having to compromise on imponant organizational goals. Harvard scholar Teresa M. Amabile points out, however, that managers and change leaders can share power regarding choice of means and processes, even ifthey can't debate the goals. \"People will be more cres ative,\" she says, \"if you give them freedom to decide how to climb particular mountains. You needn't let them choose which mountains to climb.\"'3 Change Leaders Identify and Deal Positively with Resistance to Change. You may have heard the saying \"change can be your best friend.\" At this point, however, we should add . . . \"but only ifyou dealwith resistance in the right ways." when people resist change, they are most often defending something important to them that nowappears threatened. It is tempting to view such resistance as something that must be overcome. But this mindsset can easily cause problems. Perhaps a better approach is to view resistance as feedback, as a source of information about how people view the change and its impact on them. A change leader can learn a lot by listening to resistance to develop ideas for Improving the change and the change process.\" Such resistance is often associated with the following hangups and concerns: e Fearofthe unknownnot understandingwhat is happeningor what comes next s Disruptedhabitsifeeling upset to see the end ofthe old ways of doing things . Loss ofconfidencefeeling incapable of performing well under the new ways of doing things Result 3 of 12 > 180 c HA PT E II 9 Organizational Cultures, Innovation, and Change - Loss ofcontroliteeling thatthings are being done \"to\" you rather than \"by" or \"with\" you . Poor timingifeeling overwhelmed by the situation or feeling that things are moving too fast - Work overloadinot having the physical or psychic energy to commit to the change - Loss offaceifeeling inadequate or humiliated because it appears that the old ways weren't good ways - Lock ofpurposeinot seeing a reason for the change and/or not understanding its benefits The prior list probably contains some familiar items. You've likely seen some or all of these reactions in your own experience. Quite honestly, haven't you also been a resister at times? When you were, how did the change leader or manager respond? How do you think they should have responded? Once resistance appears, change leaders can deal with it in various ways. And, some of theirchoices are better than others.SD Education and communication use discussions, presentas tions, and demonstrations to educate people about a change before it happens. Participation and r'nvoivementallow others to contribute ideas and help to design and implement the change. Facilitation and support structure provide encouragement and training, channels for commus nicating problems and complaints, and ways of helping to overcome performance pressures. Negotiation and agreement offer incentives to those who are actively resisting or ready to resist, trying to make tradesoffs in exchange for cooperation. Change leaders who use manipulation and cooptation try to covertly influence resiste rs by providing information selectively and structuring events in favor ofthe desired change. Those using expi'icit andimpiicit coercion to force resisters to accept change threaten them with nega- tive consequences if they don't go with the program. Would you agree that most people don't like to be on the receiving end of these last two approaches? Learning Objective 9.3 Describe How Managers Lead the Processes of Organizationa