Innovation and Change Management in Manufacturing Companies - Coursework Example

A Plan for Innovation and Change Management in Manufacturing Companies Executive Summary This plan provides a framework upon which companies in the manufacturing industry can develop and successfully implement a process of innovative change with regard to developing and introducing new products in the market. The framework for innovation and change in manufacturing companies is based on the following organisational elements: nature of the work, the people involved within the organisation, and formal and informal organisation. In essence, the idea of an innovative company in the manufacturing industry is centred on the ability to increase the rate at which the manufactured products, which are valued by the customers, are brought to the market. As such, manufacturing companies need to implement changes that will enable them to avail their products to the market in time, within the budgetary allocations and at a price that makes the entire process highly profitable to them. In order to implement this vision, manufacturing companies need to accomplish several steps. These are derived from Kotter’s model of organisational change management as follows: generate a sense of urgency, create a vision, and manage and sustain the change process. The success of the process depends on the extent to which all the organisational elements are aligned to each other and to the overall vision of the company as well. One key practice of change management that is critical for managing change in the future entails measuring the progress of change within an organisation. This is important since it allows organisations to assess the extent to which the objectives associated with the process of change have been achieved. Table of Contents 1.0 Introduction Organisational innovation and change management seek to realign different elements of an organisation with its values, vision and objectives in order to develop a competitive strategy that will guide the organisation. As such, innovation and change management within an organisation take place in line with the structure of the organisation, its processes and systems. Organisational processes entail the sequence in which raw materials are converted into finished products. On the other hand, whereas systems entail the decision making framework in place within an organisation, organisational structure takes into consideration functions, products and the geographical location of the clients. This plan presents information on innovation and change management for companies operating in the manufacturing industry. It is divided into two distinct parts. The first part identifies a sustainable innovation framework which companies can adopt. In the second part, a change management strategy to implement the innovation framework is presented. The strategy addresses key issues in organisational elements that centre on unfreezing old approaches, developing new approaches and refreezing the new approaches with systems so as to sustain change as well as monitor and evaluate progress over the course of time. The plan concludes by examining the key practices of change management that are critical for future management of change in companies in the manufacturing sector. 2.0 The Framework for Innovation and Change Management 2.1 Organisational Elements According to Nadler and Tushman (1989, cited by Jones 2010, p. 14), organisations are usually composed of different elements that are mutually dependent on each other. The interaction among formal organisations, work, people and informal organisations is a key factor in maintaining balance within organisations. According to Hamel (2006, p. 75), the competitive strategy of a firm plays a central role in creating a purpose and influencing the design of the four organisational elements. As such, the strategy acts as a long-term plan to lead the company into fulfilling its vision through a process of pursuing specific and synchronised operational goals. All the four organisational elements are involved in the process of designing and implementing change in organisations. For instance, people who are hired in organisations require continuous education, training and other initiatives that seek to improve their productivity (Harsh 2010, p. 135). On the other hand, since when hiring different staff, organisations introduce into their systems varieties in terms of knowledge, skills and abilities, there is need for organisations to develop consistency within their human resources in line with the strategic objectives being pursued (Leonard & McGuire 2007, p. 85). One common way in which organisations develop consistency in their workforces is by encouraging their employees to internalise the norms, beliefs and values of the company. By doing so, employees are able to act in accordance with the objectives of the company at all times. Also, the performance of work within an organisation may take the form of individuals with special skill performing different functions either separately or in teams. According to Kotter (2012, p. 33), the decision on whether to organise work in terms of employees or in terms of individuals performing separate tasks depends on the nature of the task at hand. For instance, the use of teams is appropriate in cases where the nature of work involves tasks that are highly interdependent while seeking to achieve a common objective (Manning 2013, p. 124). The element of informal organisation entails all things that are not formally designated as work or the formal structure of the organisation. The role of this element arises from the fact that the structures and procedures developed for organisations may fail to address all the realities in the workplace. As such, this creates room for innovation to find solutions where the existing system fails to address all the issues at hand and to get around inefficiencies inherent in the existing system (Leonard & McGuire 2007, p. 75). 2.2 The Change Process The process of change and innovation within organisations is usually divided into several logical steps. Although there are several local variations in the way different steps within the various change management models are applied in different organisations; one common feature in the different models is that the distinct steps provide a useful framework upon which organisations can base the process of change. According to Kotter (2012, p. 38), the process of change within organisations takes place in eight distinct steps. The first step involves establishing a sense of urgency within the organisation. By generating excitement among all the people involved in a process of change, organisations can ensure that the change process is well managed and monitored throughout the process of implementation. Secondly, the process of organisational change entails creating the guiding coalition within the organisation. This means that organisations need to create and coordinate the functions of highly effective teams that will be charged with the responsibility of leading the change efforts in the organisation. The third step in the process of organisational change according to this model entails developing a change vision for the organisation (Kotter 2012, p. 54). According to Beer and Nohria (2000, p. 134), this step involves using the competitive strategy of the organisation to visualise the state of the organisation after the entire change process and aligning all the different organisational elements with the developed strategy. The fourth step in organisational change entails empowering broad-based action within the organisation. Organisations need to remove all manner of obstacles to the change process within their systems (Harsh 2010, p. 100). In addition to this, organisations seek to encourage risk taking activities and approaches towards their operations as a way of ensuring that the process of change is implemented successfully. The fifth step in the change management process for organisations involves generating short-term wins (Beer & Nohria 2000, p. 135). With short to mid-term objectives, organisations seek to capitalise on their achievements as a way of building a solid base of organisational change. As a way of following up on the sixth step in the process of organisational change, organisations seek to change different policies, systems and functions that fall short of the vision by use of increased credibility. Apart from changing the policies and structures in place in order to establish conformity with the strategic objectives, organisations seek to replace their existing processes with different change agents and themes. Lastly, the process of change management within organisations involves incorporating changes into the culture of the organisation. In this step, the connection between new practices and processes with the success of the organisation are emphasised. As such, the new processes are implemented as part of the new culture of the organisation undergoing change (Harsh 2010, p. 201). 2.3 Alignment and Innovation For manufacturing companies, becoming an innovative company entails increasing the rate at which the manufactured products that are valued by the customers are brought to the market (Salo 2010, p. 132). In essence, manufacturing companies are considered successful if they manage to avail their products to the market in time, within the budgetary allocations and at a price that makes the entire process highly profitable to the companies. In order for companies in the manufacturing industry to develop their innovativeness, there is need for realigning all the different organisational elements with the overall competitive strategy of the company. According to Andrioupooulos and Dawson (2009, p. 49), there are four different forms of alignment between organisational elements and the competitive strategy of an organisation. For instance, horizontal alignment indicates the extent to which all the four organisational elements support each other and are working in mutual dependence in the operations of the organisation. On the other hand, vertical alignment signifies the extent to which all the organisational elements are aligned with the overall competitive strategy of the company. Thirdly, alignment within an organisation may take the form of the extent to which the competitive strategy of the company is aligned to the factors of the external environment which are the competition, the labour market, legislation and the products’ market (Andrioupooulos & Dawson 2009, p. 60). In order for an organisation to be competitive, there is need for the essential elements to be fully aligned with the overall competitive strategy of the organisation. As such, all the elements should be supportive of the competitive strategy and work in unison with each other. According to the McKinsey Global Institute (2012), the competitive strategy of an organisation may be based on different factors, including price and products. As such, an organisation achieves innovation by ensuring that all its elements are working in coordination with each other and in support of the chosen differentiation strategy. For the case of manufacturing companies, innovation should focus on developing and introducing new products and services in the market within reasonable time and at prices that are highly profitable to the companies. According to the McKinsey Global Institute (2012), innovation in manufacturing firms should take the form of a slow process that continuously improves the products and processes of a company. Through this process, a company is able to fine tune its operations and processes with its business model in accordance with the desired vision. With progressive innovation, manufacturing companies will be able to enhance the following: the manner in which the day-to-day operations of the companies are carried out, the rate of employee involvement and the process of development of new products for the market. 3.0 Implementing the Change Management Strategy For manufacturing companies to implement the innovative change in their overall operations and processes, there is need to consider the role that will be played by different stakeholders in the process. For instance, the leadership of the company will play a critical role throughout the process of implementing the changes. The top management of the company is charged with the responsibility of communicating the vision and mission of the firm to all the people involved in the process (McKinsey Global Institute 2012). Apart from that, it is the role of the top management of a company to ensure that all the steps in the process of change within the organisation are accomplished in relation to the competitive strategy of the company. Also, change within manufacturing companies should take place in relation to the broader organisational context which entails the strategic objectives that any given company seeks to accomplish. Since it is recommended that manufacturing organisations should seek to innovate on progressive product development, implementing the changes requires that the companies take into consideration the processes of information flow and general decision making with regard to the day-to-day operations of the company (McKinsey Global Institute 2012). In essence, the process of implementing the desired changes should take place in several distinct steps as outlined in the sections that follow. These steps are in relation to the model of organisational change process as developed by Kotter (2012, p. 66). 3.1 Step One: Generating a Sense of Urgency According to Kotter (2012, p. 90), the success of a change process depends on the level of excitement generated and maintained in all the people involved in the process. This enables people to be part and parcel of the process, thus enabling them to participate fully. Manufacturing companies will have to realise the need for change in the first place. By weighing out competing possibilities and assigning different projects to different individuals, the top management in manufacturing companies will create recognition of the need for change within the employees in the companies. By doing this, employees will realise the sense of urgency depending on the projects and tasks assigned to them by the top management of the organisations. After creating a general recognition of the need for change within the company, the management has the responsibility of managing any possible resistance to the process of change. Resistance to change covers a wide range of counterproductive activities that hamper the process of change either by active or passive action (O’Connor 2002, p. 21). As such, resistance may arise from either the structures of the firms itself or from the individuals within the firm. There is, therefore, need for the management of companies in the manufacturing sector to identify the actual cause of resistance before seeking ways of managing it. Since individuals resist change because of the fear of the possible loss of benefits associated with the status quo; there is need for the top management in manufacturing companies to minimise this resistance. According to O’Connor (2002, p. 23), one way in which organisations can minimise resistance to change is by shifting the primary objective from one that emphasises on tackling resistance to one that seeks to create an overall readiness for change within the organisation. Apart from influencing the attitudes, actions and behaviours of employees within an organisation, such an approach ensures that there is a shared sense of meaning, interpretation of events and direction within the company. As such, there is need for manufacturing companies to develop an overall sense of readiness for change within their employees. This is an important step in creating a sense of urgency as the first step in the process of change. 3.2 Step Two: Creating a Vision A vision is important for an organisation because it provides a means of aligning the strategic objectives of the organisation with different elements that make up the entire organisation (Jones 2010, p. 7). Because of this, a vision is a key factor in implementing the process of change within an organisation. In essence, manufacturing companies will have to develop a vision that shows how the companies should be organised and managed in accordance to their competitive advantages. With this, the companies will be able to have a realistic picture of their future after the objectives in the change process have been attained. One way in which manufacturing companies can create a credible vision is by forming transition teams (Manning 2013, p. 89). These are formal groups that are charged with the sole responsibility of planning and setting off the process of change within an organisation. Coordination between the transition team and the entire workforce in manufacturing companies can be established by use of action teams which can be made up of first-line supervisors and other employees directly involved in the manufacturing process. According to Leonard and McGuire (2007, p. 100), the importance of the quality of the team is central to the overall success of the change process. Because of this, there is need for the team to be made up of employees who not only appreciate the need for change within the company but are also well equipped to tackle the challenges that are associated with implementing such a process. Also, there is need to ensure that the composition of the team satisfies the conditions of broad representation within the organisation. This is an important aspect that will ensure that the vision that is developed bears the contribution from different departments and cadres within the organisation. By developing a good vision, manufacturing companies can successfully implement the proposed innovation in terms of enhancing their production of new products and services to the market at a price that is highly profitable. 3.3 Step Three: Managing the Transition By managing transition, organisations will seek to empower their employees by undertaking the following steps: removing all possible obstacles to the process of change; putting in place all the structures necessary for the change process; and lastly, making commitments and reassurances to all the people involved in the process of change. In order to empower employees, manufacturing companies will have to release employees from non-essential tasks and reassign them to tasks that are essential in the change process. This is a necessary step since initiating the process of change should not amount to an excessive addition of work that is done by the employees (Kotter 2012, p. 112). Apart from ensuring that the workload of the employees remains within acceptable levels and is relevant to the process of change, it is also important for companies to ensure that both the formal and informal structures of the company are consistent with the overall competitive strategy that has been established (Salo 2010, p. 134). For instance, it is necessary that the company ensures that the processes which support the generation, articulation and evaluation of ideas receive all the support required within the organisation. Separately, organisations should ensure that the human resource functions are consistent with the goals under the new vision. This means that companies will have to change their reward and motivation systems to take into account changes in their overall strategic objectives and visions (Jones 2010, p. 23). 3.4 Step Four: Sustaining the Process of Change This is a necessary step for companies to ensure that after successfully implementing the change process, they do not get stuck in the process itself in the course of time. Theoretically, according to Jansen (2004, cited by Beer & Nohria 2000, p. 138), there are two competing forces which operate within firms during the course of change: stasis-based momentum and change-based momentum. Whereas change-based momentum seeks to move the company towards a full realisation of the process of change, stasis-based momentum works to return the organisation to the status quo. In order to ensure that the process of change is implemented successfully within an organisation, there is need for the management to generate sufficient change-based momentum. This can be done by setting short-term targets in the course of the process. Such an approach can be effective to maintain the energy and concentration needed to ensure that all the objectives of change are achieved (O’Connor 2012, p. 23). In so doing, it is necessary for companies implementing the process of change to monitor their progress and evaluate the entire change process in the course of time. Such an approach is critical to ensuring that the change process is on track. 4.0 Conclusion In conclusion, manufacturing companies should develop their innovation and change processes based on increasing the rate at which their manufactured products, which are valued by customers, are availed to the market. This should be done in a manner that adheres to the budgetary constraints and which guarantees prices that are highly profitable to the companies. Also, in order for manufacturing companies to develop their innovativeness, there is need for realigning all the different organisational elements with the overall competitive strategy of the companies. On the other hand, the process of implementing change within the processes in the organisations entails three general steps: breaking old practices, establishing new ones and re-enforcing the new practices. The success of the change strategy depends on the how accurately the process is measured and monitored. This is important since it allows the organisation to evaluate the extent to which the goals associated with the process of change are achieved. References Andrioupooulos, C & Dawson, P 2009, Managing change, creativity and innovation, Sage Publications, London. Beer, M & Nohria, N 2000, ‘Cracking the code of change’, Harvard Business Review, May – June 2000, pp. 132 – 140. Hamel, G 2006, ‘Management innovation’, Harvard Business Review, vol. 84, no. 2, pp. 72 – 84. Harsh, P 2010, Organisational change, Pearson Education, New Delhi. Jones, M L 2010, ‘What do managers do during major organisational change?‘, in Proceedings of the 2010 IABR & ITLC Conference, The Clute Institute for Academic Research, Littleton, Co., 1-16. Accessed at: (4 November 2013). Kotter, J P 2012, Leading change, Harvard Business Review Press, New York. Leonard, D & McGuire, M 2007, The executive guide to understanding and implementing the Balderidge Criteria: Improve revenue and create organisational excellence. ASQ Quality Press, London. Manning, K 2013, Organisational theory in higher education, Routledge Publishers, London. McKinsey Global Institute 2012, ‘Manufacturing the future: The next era of global growth and innovation’, Insights and Publications. Accessed at: (4 November 2013). O’Connor, C 2012, ‘Managing resistance to change’, Strategic Direction, vol. 18, no. 6, pp. 21 – 23. Salo, J T 2010, ‘Innovation in the metal manufacturing industry: facilitating innovation with electronic business applications’, International Journal of Electronic Business Management, vol. 8, no. 2, pp. 130 – 138. Accessed at: (4 November 2013). Read More