Organizations must adapt to a new way of doing business in the globalized world, which includes greater competition and potentially endless risks. In addition, organizations must operate in a dynamic environment where several stakeholders are bound together in complex ways. The notion of connectedness has been elevated with the advent of the internet, which has allowed the exploitation of online resources, posing the possibility of a beneficial impact on increased propensities for creativity (Hanelt et al., 2020). In today’s organizations, changes are a perpetual problem. Leadership styles and innovative changes that functioned during the past century will not continue to be relevant in this century.
This literature review assesses leadership theories, such as transformational and path-goal theories. The discussion explores how leadership philosophies have changed over the past few decades, particularly in the post-industrialized world where the value of talent has gradually supplanted the value of labor. The essay evaluates the ideas and applications that are most pertinent to organizational management. In addition, the research discusses how a more sophisticated leadership style boosts innovation and organizational performance. This transitional topic draws on innovation and how it has affected workplace leadership. The analysis of a case study of an unsuccessful change and how to make it effective is presented.
Analysis of Theories of Innovation and Change
Innovation is the introduction of new, better methods of developing processes and the practical impact that fresh concepts can have on businesses and societal settings. As a result, innovation crosses multiple organizational management domains. Human resource management is crucial in supporting innovative workplace behaviors that contribute to the organization’s overall performance. Innovative workplace conduct and culture encourage individual employee initiative and creative thinking. The workforce’s level of innovativeness and creative thinking is key to organizational effectiveness (Christensen et al., 2013). It is critical to maintain and develop an innovative force that contributes to the increased success of the organization.
Innovation is deemed incremental when the process impacts partially and is characterized by proportional growth. Innovations are radical when they are revolutionary and imply the organization is working on something new and different. Importantly, Joseph Schumpeter began to develop a theory of radical innovation in the 1920s (West, 1987). This entails a significant change in technology, processes, products, or services, ultimately transforming markets and industries and creating new markets. Disruptive innovations are centered on creating new goods or services, either gradually or drastically, but distributing them through a bottom’s up approach regarding the value chain (Myllylä, 2018). The theory was created by Clayton Christensen to explain the impact of new market actors(Christensen et al., 2013). Radical and disruptive innovations have increased across all industries and crafts as a result of the digitization of society and organizations.
Incremental innovation patterns that change from conventional to more radical approaches are necessary to adapt organizational innovation to these volatile circumstances. Radical or disruptive innovations have the potential to upend the dynamics of the market and change customer expectations by providing technological breakthroughs that deliver much greater value to the customer than was possible via the earlier products. Radical innovations are crucial because they give progressive companies exponential growth potential while forcing out underperformers from the market (Skillicorn, 2017). Research on digital innovations has shown how disruptive innovations have enormous potential, whether they build on recently established technology or create new business cases for existing technologies (Mattone, 2020). Radical product innovations are founded on emerging or new technologies.
In contrast, disruptive product innovations may not use new technology but have the potential to change how customers view or use the product. Disruptive innovations are often targeted at an emerging market, but radical innovations might be both targeted at current mainstream markets and developing markets (Rastogi et al., 2019). As technology advances and performs well to appeal to the mainstream market, a disruptive innovation trajectory transitions from emerging to mainstream markets. Disruptive inventions are frequently original in concept and feature, making them difficult for the general public to accept.
Businesses with dual innovation inclinations can maintain dominance in their current markets while focusing on emerging areas for the long run. ML Tushman and CA O’Reilly developed this theory and reinforced it in practice (West, 1987). Such businesses can generate innovation founded on an imaginative appraisal of future technology or future client demands, as well as targeted innovations that increase the efficacy or efficiency of their current business processes or products. Dual innovation can occur when businesses use a growth strategy concentrating on their current and future practices (Skillicorn, 2017). Innovative companies use the define, model, abstract, solve, and implement (DMASI) model for tactical innovation to solve present challenges and maintain the company’s current market position (Myllylä, 2018). This paradigm enables organizations to devote time and money to incrementally improving their current operations or goods. Accordingly, the basic principle is that the most significant problems should be solved to improve the functioning of the business (Alsher, 2017). In addition, during the operation of the company there are constant problems, which managers need to address, depending on the priorities.
The define, map, apply, plan and implement (DMAPI) method is used to innovate and change for the future strategically. A method is needed to establish key development strategies that will be supported by evidence. With the help of this framework, businesses can generate novel and disruptive concepts that could lead them to emerging markets (Alsher, 2017). Dual innovation enables firms to develop numerous innovations simultaneously. However, this is only possible if the organizations have an ambiguity-tolerant culture. Most firms have the potential to either conduct incremental innovation to strengthen their current operations or have the talents, mindsets, and potential to conduct disruptive innovation (Hanelt et al., 2020). Organizations can create innovative strategies through a supportive and enabling culture. A culture of continuous innovation can be fostered through leadership that empowers employees to envision futuristic ideas for products or processes while preserving or improving present product and process efficiencies and effectiveness (Rastogi et al., 2019). Thus, the model is designed to solve efficiency problems in the creation of new models and innovative proposals.
Change Management for Innovation
Strong cause-and-effect connections exist between innovation and change. In organizations, change is induced by strategic actions, whether structural, functional or conditioned by external factors, which entail altering or realigning some organizational assets. Change is a result of innovation and is frequently planned in conjunction with the introduction of the innovation. Obtaining support from the audience through enlisting their assistance is a crucial component of effective and efficient innovation and change management strategy (Hughes et al.,2018). It is prudent to analyze the major areas of interest before and after any change and determine the concerns attributable to various stakeholders. A stakeholder’s impact on a change and the organization may be substantial. However, the stakeholder’s control over the innovation may be limited to a narrower scope of action relative to the organizational environment.
Review of Relationship between Innovation and Change
The typical obstacles to implementing change include a lack of cooperation among personnel, a general mistrust of unproven methods, or the fear of departing from what has previously worked. Kurt Lewin’s change management theory helps identify the uncertainty and resistance to change that all staff members can encounter within an organization. Lewin’s synthesis of innovation and change theory entails three manageable stages: unfreeze, change, and refreeze.
The unfreezing stage involves the realization that change is required and that it is essential to progress outside the comfort zone. The first unfreezing phase progresses through the search for incentives and excitement for organizational change. Some action is needed to break existing practices. Most organizations adhere strongly to the old case study methods and dismiss any modification, which is why the radical step is essential. Kurt Lewin understood that change is not a short-term event but a process, which Lewin later called the transition process (Burnes, 2004). The changing phase is one of the more difficult because people are uncertain about the consequences of a further course of action. At this stage, support is needed, which can be in the form of training, coaching, and mistakes should be perceived as part of the process (Burnes, 2004). This phase involves the implementation of planned activities to change the behavior of employees or departments.
The third step is called refreezing to establish stability after the change occurs. This phase is often criticized by critics who assume there is no time for this step, leading to criticism of Kurt Lewin’s model. The need for this stage is inconsistent with the modern understanding of change as some kind of constant, often chaotic process, where considerable flexibility is required. Thus, the unfreezing process for subsequent change will proceed more readily (Burnes, 2004). Interventions are conducted to consolidate the new organizational practices. The change theory is favored for its ability to uncover unseen organizational issues while providing a fresh approach to business practices.
Hayes’ theory recognizes the need to implement the three steps of change into a model with five stages. These include recognizing the necessity of change and beginning the transformational process by examining the cause and necessity of change. The diagnoses are made by analyzing the current situation and planning a potential future, which instills a sense of urgency and anticipation in the organization’s members (Pollack, 2018). The next step entails establishing a timetable, a management plan, and a team of key players in preparation and planning for implementation by taking the actions that will bring about the change and analyzing the results (Hayes, 2018). Sustaining change can be compared to Lewin’s refreezing model, which describes how organization members adopt new behaviors. Organizations and individuals are forced to develop new and better ways to manage change due to globalization, downsizing, mergers, competition, reorganizations, and new technology.
The most popular research on leading change is Kotter’s eight-stage model. Kotter outlines eight steps businesses should take to overcome these obstacles and successfully implement significant change. The first step of the model is the most important step. It is because employees are conscious of the need and urgency for change that support will be created. This requires open, honest, and convincing communication (Danter et al., 2000). The management should openly discuss with employees what is happening and why change is necessary and ask for support from stakeholders and industry experts. The second step is to create a project team that wants to address the changes the organization is trying to implement (Danter et al., 2000). The team’s composition will alter depending on the proposed change’s specifics. The formulation of a clear vision can help everyone understand what the organization is attempting to accomplish within an agreed-upon timeframe. It establishes more specificity and creates implementation support (Danter et al., 2000). Connecting the adopted vision to the company’s strategy will assist employees in achieving their goals.
The right vision motivates and directs team actions and decisions, assisting in the successful implementation of change. The goal of the fourth step is to convince the organization to embrace and support the change project by clearly communicating the vision and tactics (Alsher, 2017). The objective is to persuade employees to support and relate the change outcomes to staff and organization benefits. Obstacles may occur when implementing organizational-wide transformation into practice. The change barriers include inadequate processes, employee resistance to change, supervisors who lack authority, and administrative regulations. The fifth phase outlines strategies that the guiding coalition and senior management should implement to eliminate these roadblocks that stand in the way of the organization implementing the transformation vision.
Fundamental transformation takes time to fully manifest; thus, employees may become demoralized after experiencing an extended period without celebrating any wins. Early in the change process, it is crucial to establish short-term targets to achieve and celebrate to maintain momentum and inspire personnel to support the effort. The sixth step is the creation of short-term goals to ensure that employees have a clear understanding of what is occurring. When goals are achieved, employees will be motivated to make further changes (Danter et al., 2000). The goal of the seventh stage is to maintain the implementation of change by ensuring that teams continue to work diligently toward realizing the change vision while tracking their advancement. After a few swift victories, it is crucial to prevent the squad from prematurely declaring triumph. In the eighth step, the change leaders focus on creating a new culture to ensure change endures.
A criticism of Kotter’s approach is that the first step of Haye’s model, when the necessity for change is assessed, is not considered. Kotter’s 8-Step Change Model may be seen in action in numerous areas of organizational psychology. Executing someone else’s vision or leading the push for a significant company transformation can benefit management at different levels where one is aware of the change implementation process.
The Leadership of Innovation and Change
Organizational transformation is a fluid process affecting multiple components and should be strategically managed instead of adhering to a stage-by-stage methodology. Leadership style has been emphasized as one of the most significant individual impacts on business innovation since leaders can actively decide to introduce new ideas into an organization and set specific goals (Hughes et al., 2018). A leader that can identify the urgency and realize the need for a shift in the marketing strategy is primarily responsible for a successful change. Leadership regarding innovation and change entails transformational theory and path-goal theory of leadership.
Transformational leadership enhances the motivation and performance of workers. It is significant to note that the theory of transformational leadership was developed by James Downton in 1973, but was later supplemented by James Burns in 1978 (Amabile et al., 2004). Transformational leaders can direct employees’ efforts by expressing a vision that prioritizes long-term over short-term company goals and directs them toward innovative work procedures and results. By fostering the right environment and making decisions that encourage the successful development and use of knowledge, transformational leaders significantly influence how organizations can develop innovations. Furthermore, transformational leaders can impact management innovation by articulating a shared vision, encouraging change, and fostering a specific organizational culture by lowering the uncertainty and complexity related to its pursuit (Faupel and Süß, 2018). The effectiveness of research and development project teams is positively impacted by transformational leadership, which increases subordinate innovativeness, impacts the degree to which they are oriented toward innovation, and adds distinctive value to the projects they complete.
The disadvantage of transformational leadership is that it is also essential for a leader to have someone to rely on. Therefore, it is widespread to combine transactional and transformational leadership. At the same time, the drawback is that minor tasks are forgotten, which makes it challenging to implement the concept (Amabile et al., 2004). In addition, the invariable presence of a favorite can lead to overload and staff burnout.
Path goal theory emphasizes that leaders should change their leadership styles to their subordinates or adopt a path based on the situations they face to achieve a goal. The theory was developed by Robert House in 1971, although it was modified afterwards (Anderson & West, 1998). It is molded on the expectancy theory of motivation, where employees are motivated to work towards a task if they believe that the organizational goal is achievable; there is a promise of reward based on the value of attaining a goal. Leaders look for ways to motivate their teams to achieve their objectives and eliminate any roadblocks or ambiguities in their way. The fundamental disadvantage is that the theory is complicated to use in a practical case. This is because it includes many management frameworks. At the same time, the theory describes only the leader’s influence on the employees and does not study the reverse process. Empirical studies of this theory have obtained contradictory data (Anderson & West, 1998). A significant drawback is the absence of clear recommendations on the leadership styles to be selected.
Every leader should adopt an innovative strategy to foster innovation in a specific field by fostering a safe culture, open communication among his team members, and upending the status quo (Mohiuddin et al., 2022). Leadership innovation and change underline the significance of empowering leaders with the necessary liberty to enable them to test novel solutions with their teams. Innovative leaders exhibit specific traits that distinguish them from their peers and give them the power to affect change inside their organizations. Entrepreneurs should be able to strike a balance between their vision and managerial ability, their zeal and practicality, and their proactivity and patience.
Hence, this essay reviews the literature on theories of innovation and change and assesses the link between these variables and leadership. The chapter discusses the radical and disruptive views, the dual innovation perspective, and their impacts on organizational performance. The strategies proposed by Kurt Lewis, John Hayes, and John Kotter, facilitate the change implementation represented during the various stages of the proposed change. Establishing a sense of urgency is crucial to facilitating change by creating more robust engagements. Innovative leaders can create an environment with a high level of trust that encourages and supports innovation. The consequences of not creating a high-trust atmosphere among team members are significant since trust is the key to an open and honest exchange of ideas necessary for creating novel solutions.
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