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Module 4:Innovation and Change
06/05/2021 – 07/05/2021Day 1
Contracting
• Be present
• Challenge (But be Kind!)
• Chat function for lectures
2
Academic Deadline for Essay : 20/08/2021
• This module asks you to write a 4,000-word essay that critiques how to drive change and new ways of working within an organisation. Be sure to address demonstrate the following knowledge of:
• Innovation; the impact of disruptive technologies (mechanisms that challenge traditional business methods and practices); drivers of change and new ways of working across infrastructure, processes, people and culture and sustainability. (B1.1, B2.1, B3.1, B3.2)
• Brand and reputation management (C1.1, C2.1, C3.1, C4.1, G5.1)
• Large scale and inter-organisational influencing and negotiation strategies. (G1.1)
Essay 4 cover sheet can be found on the Hub
Reading
• Modular reading – as named in the handbook was placed on the Hub two weeks ago
• References contained in lectures: collated into a single list and has been added to the Hub
(Should lecturers mention anything not already listed, the extra references mentioned will be captured and shared following the PLDs)
Canvas
Sam Conniff- Guest Speaker
• Final session tomorrow
• Be More Pirate
• Upcoming session: Uncertainty Experts
17 June
4-6pm
https://zoom.us/meeting/register/tJUod-6srzkvHdRKQvYwsa9KKg-NUtLcvy1d
https://www.samconniff.com/
Survey – regional hubs
• Google survey to be sent out next week
• Please complete to indicate your location preference by 30th
May
8
Schedule
The Science of ChangeDan Stone
Module 4 – Lecture 1
This session studies seminal change models, including Lewin and Kotter, and explains how their application drives effective transformation within an organisation as well as the building blocks for implementing the change.
What is Change Management and why do we need it?
• Change management is the discipline that guides how we prepare, equip and support individuals to successfully adopt change in order to drive organizational success and outcomes
• Change management provides a structured approach for supporting the individuals in your organization to move from their own current states to their own future states
Organisations are ever-changingThe shift in people's behaviours/ways of working is integral to achieving the new target state
https://www.prosci.com/resources/articles/what-is-change-management
Change Management at an Individual Level:The Kubler-Ross Change Curve
Change Management at an Individual Level:Think, feel and act…
Individual change management draws on disciplines like psychology and neuroscience to apply actionable frameworks to individual change
Projectoutputs
Diagram: Change management from Starting Out in Project Management, 3rd edition, Copyright, APM
Do I understand why?
Do I intended to co-operate?
Do I know what to do?
Think
Feel
Act
Change Management at an Individual Level:The challenge in Change is to sustain commitment
Change Management at an Organisational Level:Demand v Capacity
• In many organisations the demand for change outstrips the capacity to deliver it.
• In addition, the demand and pace for change is increasing.
Demand
Capacity
Change Management at an Organisational Level:Process and Interaction with Project Management
What does Change Management Involve?
• Organizational change management involves first identifying the groups and people who will need to change as the result of the project, and in what ways they will need to change.
• Organizational change management then involves creating a customized plan for ensuring impacted employees receive the awareness, leadership, coaching, and training they need in order to change successfully.
• Driving successful individual transitions should be the central focus of the activities in organizational change management.
How does Change Management Work with Project Management?
• Organizational change management is complementary to your project management.
• Project management ensures your project’s solution is designed, developed and delivered, while change management ensures your project’s solution is effectively embraced, adopted and used.
Questions
Change Management at an Organisational Level:Change Models
Change Management at an Organisational Level:Lewin – Change drivers / resistors – Force-Field Analysis
• Lewin (1952) described the change environment as a ‘field’ of driving and restraining forces.
• Change occurs when there is a shift in the balance of forces, either a weakening of the restraining forces or a strengthening of the driving forces such that a move to the desired state can occur.
• Achieving planned change therefore involves analysing those forces and developing strategies for changing the forces in a way favourable to the intended change.
Source: Lewin K. (1951) ‘Field Theory in Social Science. Harper and Row: New York.
Change Management at an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Managementat an Organisational Level:Kotter’s 8 steps
Change Management at an Organisational Level:The Flexible Organisation
• Protect the core and disrupt at the edge: Find areas of the organisation that require agility and disrupt them with new ways of working
• Unleash the networked teams: Realign select existing structures into self-managed networked teams focused on a specific outcome
• Adopt a collaborative systems mindset: Shift mindset away from static ‘boxes and wires’ and embrace the transformative power of systems thinking.
• Create conditions for flexible design: Create an ecosystem of open talent with a fail-fast perspective and harness social technology as a mechanism to keep the organisation connected.
Change Management at an Organisational Level:The Flexible Organisation
“We are not suggesting that an oil super-major or global consumer business giant needs to look like the latest start-up, but we are suggesting that the current design of these massive organizations often crush the free-flowing energy and culture that makes teams of small disrupters so successful.”
”Google redesigned its organization to protect its successful core and tackle new ideas on its edge. Google is now part of a larger holding company called Alphabet Inc. that organizes business units into two distinct streams. The first comprises Google’s core internet capabilities including Search, Maps, Chrome, and YouTube etc. The second is a new group of companies focused on long-term pursuits, including driverless cars, life sciences and robots.”
5 categorised Reported Reasons for Organizational Change Failure:
Heckleman (2017) states that there are 5 categorised Reported Reasons for Organizational Change Failure:
1. Not creating a simple, compelling organizational vision for change.
2. Not changing individual beliefs, i.e. not ensuring that individuals have bought into the reasons for the change effort or ignoring the or ignoring the organizational culture.
3. Poor planning and/or execution of the change effort
4. Inadequate leadership, including a lack of leader involvement, preparation, and capability
5. Insufficient or confusing communication.
Why, given there has been 20 years of Kotter’s 8 steps!
Heckelman, W. (2017) Five Critical Principles to Guide Organizational Change. OD Practitioner Vol. 49 No. 4 pp13-21
Questions
Project, Programme and Portfolios
• Project – A temporary organisation that is created for the purpose of delivering one or more business products according to an agreed Business Case*
• Programme – A temporary flexible organisational structure created to coordinate, direct and oversee the implementation of a set of related projects and activities in order to deliver outcomes and benefits related to the organisation’s strategic objectives. A programme is likely to have a life that spans several years*
• Portfolio – All the programmes and stand-alone projects being undertaken by an organisation, a group of organisations, or an organisational unit*
* Managing Successful Projects with PRINCE2, p308-309s
Business PlanVision & Mission
Strategic benefits
Programme I Programme IIPortfolio management
Programme management
Project management
Project A
Sub Project A1 Sub Project A2
Project B Project C Project D Project E
Managing group of small/minor projects
Business as usual
What is Project Management?
Project Management is defined as:
• ‘The planning, delegating, monitoring and control of all aspects of the project, and the motivation of those involved, to achieve the project objectives within the expected performance targets for time, cost, quality, scope, benefits and Risk’
Key Components of a Project
Key Questions Project Management Component
• Why are we changing? ✓ Business Case for change linked to strategic objectives of the organisation (internal drivers) and environmental changes (external drivers) along with funding required
• What are we changing? ✓ Scope of the change outlining what’s in scope (such as specific groups of people or locations) as well as stating what is out of scope
• When should the change happen?
✓ Defining the plan of what should take place and when as well as the key milestones and underlying activities and tasks to reach them
• Who will be impacted by the change?
✓ Identifying stakeholders who will be impacted is a critical aspect of the project and may be people within or outside the organisation
• Who will be involved in the change?
✓ Mixture of project people running and leading the project, business SMEs (subject matter experts) and leadership steering the changes
• How should we manage the change?
✓ Governance is used to establish project meetings to track progress through reporting risks, issues and changes to the success of the project and comprises key stakeholders running and benefitting from the change
• How do we know the change is successful?
✓ Identifying the benefits as part of the business case and identifying metrics can be used to ensure the project is adding value to the organisation
• When can the project be closed and moved to BAU?
✓ Once the project has delivered on its objectives and milestones have been met, and there is a process in place to make to changes stick the project can be closed
Project Methodologies
• Waterfall delivery is the ‘traditional’ way of delivering projects which ends with a ‘big bang’ from the culmination of linear sequenced events
• In comparison, Agile Delivery iterates through sprints typically 2 weeks in duration to prototype products with incremental features until the final product is delivered
Waterfall Delivery
• Have the end in mind• Liner sequence with distinct goals for
each phase of development• Earlier phases are not revisited
e.g. building the Channel Tunnel
Agile Delivery
• High level of uncertainty • Iterative Development• Products are incrementally developed
through “sprints”
e.g. new software development
Agile Delivery
Below is the classic example of how iterating a product will enable the customer to have a better understand what they are getting through incremental iterations.
How to build a minimum viable product
Waterfall Lifecycle
Below are the typical high level steps of a waterfall project;
Definition
Execution
Initiation
Embed
Close
Business case is approved, funding agreed and
mandate to proceed isin place
Agreeing scope through Project Initiation
Document, including creating the plan and
associated project logs / control documents
Identifying requirements to achieve milestones and assessing how project will
be Implemented
Establishing the governance to control the
project and identifying impacted stakeholders
Delivering against the plan and building and testing
requirements
Tracking benefits to ensure they continue to
add value
Embedding the changes delivered through the
project into BAU
Training and communications to
up-skill
Agreeing project closure
Document lessons learned
Project Planning
Once an organisation has decided what project to execute on based on prioritisation against other projects and assessed the methodology, a plan needs to be created which defines what should take place and when as well as the key milestones and underlying activities and tasks to reach them
Below is a typical waterfall project planning structure:
Item Details
Timeline Select the most appropriate unit of measure
Phase Breakdown the plan into defined sections
Responsible Ownership and accountability are essential
TaskTasks to complete in order to reach the milestone
Milestone Marks an important point in the project
Thank you.
Break
Lunch ( 12.30 – 1.30pm)
Alison Robb-Webb
Module 4 - Lecture 2
The Art of Influencing and Negotiation
This session explores large scale and inter-organisational influencing and
negotiation strategies using theoretical perspectives.
Outline of the session
• The difference between influencing and negotiating
• Distinguishing distributive and integrative negotiation strategies and when they are used
• Gender issues associated with negotiating – a well known fact?
• Findings from a study of top performing salespeople and the belief systems that underpin their success
• The art of influencing – Cialdini’s fundamental principles
• Large scale and inter-organisational approaches to stakeholder management
“We’re all sales people now.”
Daniel Pink
“Playing the “Because I’m the boss” card is out. Even if it weren’t demoralizing for all
concerned, it would be out of place in a world where cross-functional teams, joint ventures, and intercompany partnerships have blurred
the lines of authority.”
Robert Cialdini
Negotiating versus Influencing
• Influencing is a part of negotiating
• Negotiating is not necessarily a part of influencing
• Negotiating implies that both parties are willing to make concessions in order to find a solution that is acceptable
• Successful negotiators work for a win:win outcome
• Influencing is more of a one-way approach where you are trying to change the attitude or behaviours of the other person to get them to do something
Negotiating
Distributive versus integrative negotiation
• Distributive negotiation is what people traditionally consider negotiation to be: both sides fight over something to be attained e.g. price of goods/services and they try to hide their real positions in order to gain an advantage.
• Integrative negotiation uses more creative thinking and more of a win:win mindset. Integrative outcomes satisfy the negotiation parties’ most important interests (by trading off less important for more important issues).
Distributive versus integrative negotiation
• It is possible for all parties negotiating in either style to be satisfied with the final outcome.
• Which then to use when? • Consider whether you will ever deal with the other party again
• Whether the other party can join you with creative solutions to the problem you are facing
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Lewicki and Hiam’s Negotiation Matrix
Lewicki and Hiam’s Negotiation Matrix
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Lewicki and Hiam’s Negotiation Matrix
Lewicki and Hiam’s Negotiation Matrix
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Lewicki and Hiam’s Negotiation Matrix
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Lewicki and Hiam’s Negotiation Matrix
Accommodating Collaborating
Avoiding Competing
Compromising
Importance of Outcome
Imp
ort
ance
of
Re
lati
on
ship
Key points to consider during collaborative negotiation
Pre negotiation phase:• What is your position?• What lies behind your position?• What are the needs you want met?• How acceptable will your proposals be to other
parties?
Negotiating – gender issue?
Negotiating – gender issue?
• Sheryl Sandberg’s COO Facebook
• 2010 TEDx talk Why we have too few women leaders described the harder choices for women between professional success and personal fulfillment and that women do not negotiate for themselves in the workplace.
• Suggested ‘57% of men versus 7% of women negotiated first salary’
• This was followed by her book urging women to ‘lean in’ and seize opportunities.
Sandberg 2010 https://www.ted.com/talks/sheryl_sandberg_why_we_have_too_few_women_leaders
Negotiating - a gender issue?
Mara Olekalns et al (HBR 2019) examined three of the most common challenges women face in negotiations:
• Balancing self-advocacy and communality• women who initiate negotiations come across as pushy,
unlikeable and undesirable team members
• Managing difficult emotions• Negotiations stir up variety of emotions for men and women.
• Large number of women suppressed feeling reluctant, anxious and worried because they feared it might end poorly
• Overcoming interpersonal resistance• Women face more resistance in negotiating than men
Olekalns et al 2019 https://hbr.org/2019/09/3-of-the-most-common-challenges-women-face-in-negotiations
Negotiating - a gender issue?
• Alternative research by Tinsley & Ely (HBR 2018) argues research shows the sexes aren’t so different.
• Meta-analysis of published research claimed:• men and women are very similar with respect to key attributes
such as confidence, appetite for risk and negotiating skills
• differences are not rooted in gender traits
• Many managers try to “fix” women or accommodate their supposed differences.
• Companies must instead address organisational conditions that lead to lower rates of retention and promotion for women.
Tinsley & Ely 2018 https://hbr.org/2018/05/what-most-people-get-wrong-about-men-and-women
Negotiation Research
• Positivist approach (using scientific research tools) dominated the early research since the 1960s e.g. emphasis on experiments, surveys to yield statistical data
• Focus on outcomes of negotiations and cause-and-effect relationships
• Constructivist/interpretive approaches recognise knowledge generation has a social dimension: use of case studies, interviews and field studies.
• Recent research focused increasingly on the ‘how’ and ‘why’ questions as well as the ‘what’.
• Claims here are to be judged against the criteria of trustworthiness and authenticity rather than reliability and validity
Buens, Van De Woestyne et al (2007) Methodological Issues in Negotiation Research: A state-of-the-art review, Springer Science +Business Media
What expert negotiators do differently to average negotiators
Do not go into negotiation with a win-lose mentality
Spend time planning for common ground
Provide fewer, yet compelling, reasons
More curious, not simply about playing offence or defence
Demonstrate openness of their own mind to alternative viewpoints
Understand the other party’s wider constituency
Recognise the importance of not losing face
Drawn from the research of Neil Rackham
The art of influencing
The Art of Influencing
• Hard sell – schools deal in people and so sales techniques do not apply
• Daniel Pink, Mills & Ridley argue we all can learn from sales techniques to use in non-sales roles because we look to influence on a daily basis
• Use of human psychology to understand how people respond to certain questions or actions is useful to developing influencing skills
Cialdini’s (1984) Six Fundamental Principles of Persuasion
Liking People like those who like them
Uncover real similarities and offer genuine praise
Reciprocity People repay in kind Give what you want to receive
Social Proof People follow the lead of similar others
Use peer power whenever it’s available
Consistency People align with their clear commitments
Make their commitments active, public and voluntary
Authority People defer to experts Expose your expertise; don’t assume it’s self-evident
Scarcity People want more of what they can have less of
Highlight unique benefits
Positional power or influence?
Large Scale and inter-organisationalinfluencing and negotiating strategies
Large scale and inter-organisational perspective
• The more senior your leadership the greater number of people who are impacted by your work, and the greater number of people who can influence it
• Large scale projects e.g. across MATs – differing perspectives of multiple stakeholders presents a challenge
• Stakeholder analysis is a useful tool enabling you to identify, prioritise and understand your stakeholders and support better stakeholder management
• The power-interest grid enables you to identify and analysepositions and interests of stakeholders
Stakeholder Analysis
Keep satisfied Manage Closely
Monitor(minimum effort)
Keep Informed
low
low
hig
h
high
Po
we
r
Interest
Adapted from Mendelow (1981) Environmental scanning – The impact of the stakeholder concept https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1009&context=icis1981
Stakeholder management
• Stakeholder management is the process by which you identify the key stakeholders and win their support
• The Power/Interest grid shows you who you should be communicating with; a stakeholder communication plan enables you to consider the key interest each stakeholder has in your initiative then consider whether they are an advocate, a supporter, a critic or a blocker.
• Reflect on the message you want to send to persuade them to support you in the way you want. Remember the win : win strategies of negotiation for those you think may be opposed to your plan
Influence mapping
KeyCircle size = overall influenceLine direction = effect of influenceLine width = strength of influence
CEO
HT
FacultyStaff
SENCO
HoF
Local Board
DHT
Trust SIP
Being better prepared – on every level
• “Every battle is won before it’s fought” Sun Tzu
• Become an analytic observer of the people around you
• Draw on research into negotiating, influencing and social psychology, just as you draw on neuroscience to inform your pedagogical practices in school, to improve your influencing skills
• Move from ‘upselling’ to ‘upserving’ Daniel Pink
Break
76
Brand and Reputation ManagementDr Marvyn Boatswain
Module 4 – Lecture 3
77
78
This session examines brand and reputation management from theoretical perspectives.
79
‘To brand or not to brand’
A brand is… a name, term, sign, symbol, design, or a combination of
these used to identify & differentiate product or service
offering of one seller from that of others in the marketplace.
80
Kotler et al. (2020)
(Interbrand, 2021)
Best Global Brands 2020
Branding
82
Creating mental associations that
enable consumers to organise and
clarify knowledge about products or
services in the decision making
process.
Kotler et al. (2020)
Brand defined
83
Brand elements
84
• brand name
• logo
• slogans
• colour scheme
• packaging
• shape
• symbols or pictures
• sound
Branding matters
• Differentiate a product/service offerings
• Signal a promise
• Simplifies choice & decision making
• Reduces risk and engenders trust
• A valuable asset
Establishes clear positioning in minds of targeted consumers
85Kotler et al. (2020)
Reputation
Observers’ (both internally and externally) summative judgments and assessments of experiences with an organization’s behaviour and performance over time in areas deem important.
• Collective representation of a firm’s past actions and its ability to deliver valued outcomes.
• Gauges a firm’s relative standing among internal & external
stakeholders.
86(Verčič, Verčič, and Žnidar, 2016)
Definitions across disciplines
87
Organisational
theory
Cognitive representations of organisations that develop as
stakeholders make sense of corporate activities
SociologySocial constructions emanating from the relationships an
organisation establishes with multiple publics
AccountingAn intangible asset that is difficult to measure but creates value
for companies
EconomicsTraits or signals that describe a company’s probable behaviour in
a particular situation
MarketingCorporate associations that individuals establish with an
organisation’s name
StrategyIntangible asset that is difficult for imitate, acquire or substitute &
so creates barriers that lead to sustained competitive advantages
Source: Adapted from Fombrun et al. (2000), Palgrave Macmillan.
Publics/stakeholders
88
INTERNAL• Current students
• Graduates
• Parents/guardians
• Teachers & learning specialists
• Administrative & support staff
• Management team
• Other?
EXTERNAL• Prospective students
• Local community & council
• Suppliers
• Competitors/partners
• Media
• Government & regulators
• Other?
Whose perceptions matter?
Education institution perspective
Reputation is a function of the degree to which
stakeholders perceive the organisation’s programmes,
processes, and practices meet their unique
expectations for quality.
89
(Barnett, Jermier and Latterfly, 2006)
Reputation matters
Executives believe that reputation is a high priority for their company
Executives state that reputation has grown in importance over the last few years
Only a minority of executives are ready to proactively manage reputation
Reputation matters• A valuable intangible asset
• Enhances trust, loyalty & word of mouth
• Increases stakeholders’ confidence & reduces risks
• Improves employee engagement, talent acquisition & retention
• Sustains commitment and partnership with local communities, regulatory bodies & stakeholders
• Source of competitive advantage
Roper and Fill (2012)
Reputation increasingly important
Social & consumer concerns – e.g. equality, racial, gender
justice & ethical consumption.
ESG• Environmental
• Social
• Governance
92Reputation Institute’s RepTrak (2021)
What companies or
brands do you hold in
high regard
93
Why
Building blocks of good reputation
98
Source: Fombrun (1996), Harvard Business Review
Reputation quotient
99
An audit of corporate reputation
Reputation
Emotional
appeal
Products &
services
Vision &
leadership
Social
responsibility
Financial
performance
Workplace
environment
Fombrun et al. (2000)
RQ adapted for education intuitions
100
Reputation
Source: Simplified adaptation of Vidaver-Cohen (2007)
conceptual model of Business School Reputation
Triple bottom lineSustainability framework to assess an organisation’s profitability
and its responsibility and commitment to social & environmental
concerns.
• Evaluates how a firm, in its endeavour to make profits, impacts
people and the planet.
101
(Elkington, 1998)
102
Triple bottom line - Implementation
www.greenbuoyconsulting.com, 2021)
Process model: reputation & responsibility
1. Mapping the
situation
2. Exploring vision
and values
3. Engaging with
stakeholders
4. Measuring and
managing
reputation
5. Embedding
corporate
responsibility
6. Linking reputation
and responsibility to
strategy Driving value through
management of reputation and
corporate responsibility
What influences reputation?
104Source; Roper and Fill (2012), Pearson
Linking reputation & strategy
106
Brand and reputation management from theoretical and practical perspective
Summary
107
Elkington, J., 1998. Accounting for the triple bottom line. Measuring Business Excellence.
Fombrun, C.J. 1996. Reputation: Realizing the value from the corporate image. Boston Harvard Business
School Press.
Fombrun, C.J. and Gardberg, N., 2000. Who's tops in corporate reputation?. Corporate reputation
review, 3(1), pp.13-17.
Fombrun, C.J., Gardberg, N.A. & Sever, J.M. 2000. The reputation quotient: a multi-stakeholder
measure of corporate reputation. The Journal of Brand Management 7(4), 241–255.
Jie, C.T. and Hasan, N.A.M., 2019. Student’s perception on the selected facets of reputation quotient: A
case of a Malaysian Public University. Journal of Arts & Social Sciences, 2(2), pp.66-76.
Kotler, Philip., Armstrong, Gary., Harris, Lloyd., and He, Hongwei., 2020. Principles of marketing. Eighth
European edition, UK.
Roper, Stuart. Corporate Reputation : Brand and Communication. Harlow, England; New York: Pearson,
2012.
Vidaver-Cohen, D., 2007. Reputation beyond the rankings: A conceptual framework for business
school research. Corporate reputation review, 10(4), pp.278-304.
Verčič, A.T., Verčič, D. and Žnidar, K., 2016. Exploring academic reputation–is it a multidimensional
construct?. Corporate Communications: An International Journal.
References
Break
108
Lunch 12.15 – 1.00pm
Disruptive Innovation Dr. Adeyinka Adewale, (FHEA)
Module 4 – Lecture 4110
Initial Check In
How are you doing?
Copyright Dr. Adeyinka Adewale (2020)
What have been your most dominant emotions over the past few weeks?
Session objective
This session explores the fundamentals of disruptive innovation, explaining how the impact of disruptive technologies challenge traditional business methods and practices that create new ways of working across
infrastructure, processes, people and culture.
112
Opening reflection
What do you understand by disruptive innovation?
113
Disruptive Innovation
What it is and what it isn’t
114
‘an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and
alliances’
Clayton M. Christensen, 1995
The Process of Disruption
• “Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.
• Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others.
• Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality— frequently at a lower price.
• Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously.
• Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success.
• When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred
116
The Process of Disruption
Christensen, (1995)
Key Features
• Disruptive innovations start in low-end or new-market footholds, two types of markets that incumbents overlook.• Low-end footholds exist because incumbents typically try to provide their most profitable and
demanding customers with ever-improving products and services, and they pay less attention to less-demanding customers.
• new-market footholds, disrupters create a market where none existed. Put simply, they find a way to turn non-consumers into consumers. E.g the Photocopier market and Xerox
It is a process that starts by appealing to low-end or unserved consumers and then migrate to the mainstream market.
Key Features
• Disruptive innovations often start as inferior and unattractive by most of incumbent’s customers. This makes “disruptive innovations” different from “Sustaining Innovations”• Sustaining innovation is the process of innovating to improving products and services for existing
customers. They enable firms sell more to profitable customers.
• Typically, customers are not willing to switch to the new offering merely because it is less expensive. They wait until quality improves.
• Once that’s happened, they adopt the new product and happily accept its lower price. This is how disruption drives prices down in a market.
Disrupters don’t catch on with mainstream customers until quality catches up to their standards.
What Disruptive Innovation isn’t
• It is not a product or service at a fixed point.
• It is not any new technology that changes how we do things
• It is not about claiming that a company is disruptive by virtue of its success
• It is not every business success that does things differently
Disruption in Practice What are the trends and opportunities in Education?
Some thoughts about Disruption
• Technology is a great enabler of disruption, but it is not itself the greatest underlying driver – despite the accepted wisdom of most people.
• Regulatory changes are viewed by 29.3% of executives as the single greatest driver of disruption, particularly by those in the heavily regulated sectors e.g. the financial sector.
• Changing customer behaviour is seen as the second greatest driver by 26.4% of executives – though it is first among healthcare respondents
• While the third greatest driver is red tape and bureaucracy at 21.8%.
The Economist Intelligence Unit (EIU) 2019
Opening Reflection
Are there any examples of OR opportunities for ‘proper’ disruption in the British education sector?
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Disruption in Education
• As an industry, education has certain elements that have made the market difficult to penetrate and lasting reform hard to come by. E.g high levels of regulation.
• As a general rule, the most promising areas for innovation are pockets or areas that appear unattractive or inconsequential to industry incumbents and where there are people who would like to do something but cannot access the available offering.
• To improve education as an industry, stakeholders might consider investing in technological platforms that will allow for robust educational user networks to emerge.
Disruption in Education
• Where are the pockets of ‘nonconsumption’ in education?
• E.g. in the United States, if a student fails a course, they have no recourse to make up the class and must simply move on to the next course. There is no option for credit recovery.
• Perhaps not all aspects of a subject can be offered by a school.
• In these foothold areas, computer-based or online learning is beginning to fill the void and plant itself and make inroads in the education system in classic disruptive fashion.
Is online education the next frontier of disruptive innovation in education?
Looking at your current practice, in what ways do you feel online education is disrupting your schools?
Closing Reflections
• What are current areas of ‘non-consumption we need to pay attention to?
• What groups are your current service offerings overlooking?
• Are there any organisations already harnessing these opportunities?
• How might your schools respond to these? E.g. changing internal processes, perhaps curriculum? There will usually be conservative or radical changes as regulation and individual school constraints allow
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Final Check-In
• What are you taking away?
• What are you going to start doing differently?
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Thanks for listening
Break
Sam Conniff- Guest Speaker
• Final session today from 3.45pm
• Be More Pirate
• Upcoming session: Uncertainty Experts
17 June
4-6pm
https://zoom.us/meeting/register/tJUod-6srzkvHdRKQvYwsa9KKg-NUtLcvy1d
https://www.samconniff.com/
