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Innovation and Change ManagementMGN240

Chapter Two : Change, innovation and Organization StructureOrgani ation Structure

Part TwoProf. Ahmed Hanane, MBA, CMA, Eng

Email: ahanane360@gmail.com

Today’s Course objective

1. Strategic Planning2 Business Case Coca Cola2. Business Case – Coca Cola3. Organizational structure4. Change Management

– Levels of change– Phases of change management– Phases of change management– Processes for change management

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What did we learn least week? 

1. Strategic planning2. SWOT3. PEST Analysis4. External and Internal environment analyses5. Porter Five Froces6. Competition analysis7. Core competencies8 St t d l

1‐3

8. Strategy models9. Perceived Use Value10.Innovation strategy

Assignement ‐ Business Case

– Do an internal and external analysisSt t i lt ti / ti• Strategic alternatives / options 

• Operational issues

– Identify strategic options (Opportunities) – Identify Pros and Cons of each options– Make a recommendation– Provide an implementation plan that address strategic and operational issues 

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Bottling Process flow

Empty bottlesCO2WaterSyrupPalletizer

Concentrate makers

RinsingPasteuriser

Filling & Labeling InspectionInspection

Assignement ‐ Business Case

– Spin offC lid ti– Consolidation

– Concentrate producers– Bottlers– …

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Customer Value: Perceived Use Value

1. What does the customer value?

2. Where is our competition?

3. Which attributes to highlight? 

4. Which segments to focus on?

5 Which attributes to5. Which attributes to improve?

6. Where to innovate?

How to get information for our PUV

• Focus groups• Survey• Routine interaction• …

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• Badouiya is a newly created business that produce and commercializeArgan products for cosmetic use.

• Our argan products are extracted from freshly harvested kernels from the

Business Case

Our argan products are extracted from freshly harvested kernels from thefruits of the Argane tree. Pressed when cold, the kernels are then filteredto extract our aromatic oil. As a result, it does not have the nutty aromaand is almost odourless. It takes 30 kg of fruits and more than 15 hourswork to produce 1 litre (33,40 fl oz) of oil. The task is carried out exclusivelyby Berber women.

• Argan oil can be used as an aliment or cosmetically. It enriches the skin andprotects its elasticity. It is rich in natural ingredients which play a role ofprimary importance in the renewing of cell structure. In traditionalMoroccan medicine, Argan oil was used for the care of body and face to, g ycounteract the effects of age and weather. It works wonderfully on wrinklesand dry skin, reduces visible scars left by acne, chicken pox, and spots andother damage like chapped, cracked skin and on burns and scalds. Whenused also for the care of the scalp, it restores shine to dull, lifeless hair andit strengthens brittle nails. Lastly it can relieve the pain occurring in jointsand is very suitable for massage.

In‐class Teamwork

• In a team of twos identify for Argan Cosmetic P d tProduct:– The key attributes– Identify the competition in the Moroccan market– Draft a PUV chart

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Innovation Strategy 

Strategy innovation is the capacity to re‐i th i ti i d t d l iconceive the existing industry model in ways 

that create new value for customers, wrong‐foot competitors, and produce new wealth for all stakeholders. 

Gary Hamel 

Value Innovation Analysis

• What dimensions of PUV might be li i t d th t theliminated that the industry has taken for granted?

• What dimensions of PUV might be greduced well below the industry standard?

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Value Innovation Analysis

• What dimensions of PUV might be graised well beyond the industry standard?

• What dimensions of PUV should be created that the industry has neveroffered?

Customer Matrix 

• In a team of two, do the following:

eived Use Value

• Identify the threeinnovativeways to improved ti t

Perce

Price

education atPIIMT

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Strategy Innovation examples

http://www.fastcompany.com/most‐innovative‐p p ycompanies/2012/full‐list

Organizational Structure

Consists of three key elements:

1. Designates formal reporting relationships– number of levels in the hierarchy– span of control

2. Identifies groupings of:– individuals into departments– departments into the total organization

3 Design of systems for3. Design of systems for– effective communication– coordination– integration across departments

02‐16

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Forms of Organization Structure

• Functional organizations – group people performing similar activities into departmentsperforming similar activities into departments

• Project organizations – group people into project teams on temporary assignments

M t i i ti t d l hi h i• Matrix organizations – create a dual hierarchy in which functions and projects have equal prominence

02‐17

Functional Organizational Structure

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Functional Structures

Strengths Weaknesses1 Fi ’ d i i t i d 1 F ti l il i1. Firm’s design maintained

2. Fosters development of in-depth knowledge

3. Standard career paths

1. Functional siloing

2. Lack of customer focus

3 Projects may take longer

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

3. Standard career paths

4. Project team members remain connected with their functional group

3. Projects may take longer

4. Projects may be sub-optimized

Silo Effect Found in Functional Structures

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Project Organizational Structure

02‐21

Project StructuresStrengths Weaknesses

1. Project manager sole authority

1. Expensive to set up and maintain teamsauthority

2. Improved communication

3. Effective decision-making

maintain teams

2. Chance of loyalty to the project rather than the firm

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

4. Creation of project management experts

5. Rapid response

3. No pool of specific knowledge

4. Workers unassigned at project end

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Matrix Organizational Structure

Figure 2.9

Matrix Structures

Strengths Weaknesses1 Suited to dynamic 1 Dual hierarchies mean1. Suited to dynamic

environments2. Equal emphasis on

project management and functional efficiency

3. Promotes coordination f ti l it

1. Dual hierarchies mean two bosses

2. Negotiation required in order to share resources

3. Workers caught between competing project & f ti l d d

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall

across functional units4. Maximizes scarce

resources

functional demands

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Change management ‐ Innovation

Being innovative is increasing the rateincreasing the rate at which new products and services that customers value are successfully brought f y gto market each year

Innovation and Change ManagementMGN240

Chapter Three : Change management

Prof. Ahmed Hanane, MBA, CMA, EngEmail: ahanane360@gmail.com

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• Characteristics of The Adaptive OrganizationTh P i it f Ch

Change Management process

• The Prerequisites for Change• Characteristics of Effective Change Sponsors• What Effective Change Leaders Need to Do• The  Internal Players in the Change Process and their Roles

• The Role of Outside Consultants

The Adaptive Organization

• Willingness to make change• Identifies problems quickly

I t l d t l

Risk taking is rewarded

Candidness– Internal and external looking

• Implements solutions rapidly

• Focus on innovation– Upward communication

• Trust

CandidnessOpen to feedback

Enthusiasm

Long‐term focus

Skill Development

Learning Organization

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Examples of adaptive organizations 

Prerequisites for Change

• Vision: Develop, articulate and communicate a shared vision of the desired change

• Need: A compelling need has been developed and is shared

• Means: The practical means to achieve vision: planned, developed and implemented

• Rewards: Aligned to encourage appropriateRewards: Aligned to encourage appropriate behavior compatible with vision and change

• Feedback: Given Frequently

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Management Change process –toward innovation 

An Effective Change Sponsor Must Have

• Power: to legitimize change• Pain: Personal Stake• Vision: Total in depth view• Vision: Total in‐depth view• Public/Private Role: Commitment and ability to support change publicly/ meet privately with agents

• Performance Management: Ability to d/ freward/confront

• Sacrifice: Pursue change despite personal price

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What Effective Change Leaders Do

• Embrace change when it’s needed

• Develop a vision for change

• Communicate effectively

• Shake things up by challenging status quo and encouraging others to do the same

• Stay Actively Involved by walking the walk and being visible about it.about it.

• Direct, Review Implementation of change ‐ continued participation ‐ never done attitude.  Be in position to notice and coach.

Roles: The Change Players

• Sponsors: Senior management leaders ‐ the driving force of change ‐must walk the walk. 

• Advocates: Allies of leaders, deploy the vision ‐ communicate ‐ involve ‐ sell ‐MOTIVATE

• Agents:  Influence sponsors’ commitment, target resistance, measure readiness, assess existing people/structuresexisting people/structures

• Targets: Everyone in organization ‐ develop, train, reinforce, support

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Role of Consultants

• Assessment of: management, key players, barriers, opportunities

• Coach/Develop/Train: help people adopt new behavior• Plan: Assist in process/knowledge• Values / Vision: Facilitate their development 

• Redesign Organizational Factors: Rewards, Reports, Re‐engineer

• Communications: Facilitate the process

• Project Management Assistance

In‐class team work

• Identify an innovative thing you want to h i i tchange in your environment

• Identify the steps you will follow 

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What did we learn today?