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The Official Baldrige Blog

Are Change Management, Continuous Improvement, and Innovation the Same?

A Question Outside the Box
Credit: clipart.com

Maybe it is semantics, but I think there is benefit in distinguishing among these three concepts, understanding the purpose of each of them, and the responsibilities of leadership and management for each of them. By making this differentiation, organizations have a richer set of tools for becoming better. My comments are occasioned by a recent McKinsey & Company commentary I read, entitled "Build a change platform, not a change program."

In this commentary, Hamel and Zanini assert that continuous improvement requires change platforms rather than top-down, leader-managed change programs. And I agree that continuous improvement (and innovation) require leader-inspired environments or platforms that encourage intelligent risk-taking, local improvements, cross-organizational collaboration, and best practice sharing. However, in my opinion, that is different than strategic change management which is leader-driven and initiative based. Here is where the confusion enters in the McKinsey blog. They discuss social media, such as Facebook and Pinterest as examples of change that can't and shouldn't be managed by leadership. These are innovations, not examples of change management and the two concepts should not be equated or confused. Let me briefly explore continuous improvement, innovation, and transformational change management to provide some definition around each that might encourage the use of all three in your organization.

Continuous improvement involves the ongoing improvements to processes and products that result in incremental improvements, cost savings, and productivity enhancements. Continuous improvement is part of everyone's job in a high performing organization.

Innovation involves discontinuous or breakthrough improvement of products, processes, or performance that result in new dimensions of organizational performance. Innovation can result from brainstorming, research and development, outside-the-box thinking, serendipity, and interdisciplinary collaboration. Innovation can come from anywhere in the organization, but requires a supportive environment set by senior leadership; an environment that encourages intelligent risk taking and recognizes that there will be failures in pursuing some of those risks.

Change management is a leadership induced process that involves transformational organizational change that leadership controls and sustains. It requires dedication, involvement of employees at all levels, and constant communication. Transformational change is strategy-driven and stems from the top of the organization. Its origin may be from needs identified within the organization and it requires active engagement of the whole organization.

All three activities should harness the minds and energy of employees. Change management is episodic and disruptive to the organization; innovation and continuous improvement should be ongoing and be constant sources of building competitive advantage. For innovation and continuous improvement, senior leaders are enablers and cheerleaders. For transformational change management, senior leaders are the chief agents. Sometimes lines among these concepts may blur, but the construct as three different concepts provides a framework for recognizing that different types of opportunities exist and all should be considered in seeking organizational performance excellence.

All three concepts are embedded in the newly released 2015-2016 Baldrige Criteria for Performance Excellence.

About the author

Harry Hertz “The Baldrige Cheermudgeon”

I am Harry Hertz, the Baldrige Cheermudgeon, and Director Emeritus of the Baldrige Program. I joined the Program in 1992 after a decade in management in the analytical chemistry and chemical sciences laboratories at the National Institute of Standards and Technology (NIST), the home of the Baldrige Program. I started my career at NIST (NBS) as a bench analytical chemist.

My favorite aspects of the Baldrige Program are: (1) the opportunity to interact with leading thinkers from all sectors of the U.S. economy who serve as volunteers in the Baldrige Program, who participate in the Baldrige Executive Fellows Program, and who represent Award applicants at the forefront of the continuous journey to performance excellence, and (2) the intellectual challenge of synthesizing ideas from leading thinkers and from personal research into Insights on the Road to Performance Excellence and other blogs that tackle challenges at the “leading edge of validated leadership and performance practice,” and contribute to the continuous revision of the Baldrige Performance Excellence Framework.

Outside of work I spend my time with family (including three beautiful granddaughters), exercising, baking bread, traveling, educating tomorrow’s leaders, and participating on various boards and board committees.

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Comments

Clarification I would make is that CHANGE is episodic and disruptive to the organization, and Change Management is a way to reduce the negative impact of change on an organization or individual. During teaching of Innovation and Change Management at a local University, we (the class participants) discuss the differences between strategic and tactical approaches. It is important to distinguish between the two for successful implementation and gaining leadership engagement when necessary.
Sir, Agree that three different opportunities exist and as per my limited experience got to know that even a small change implementation in a big organization would take long time and there many such small changes are pending for implementation in a long queue. Is it that change management need to be considered for small and big changes that need to be implemented on a day to day basis? Because the delay at implementation stage would need a conviction in people that the change indeed will bring in value on implementation.Churning of ideas at different levels on value proposition of change,power structure that oppose on genuine change which bring in value due to various self interest etc,solution to the problem that satisfies all existing boundary conditions etc need to be given consideration for effective change to happen?
Srinivas: You are quite correct that some organizations are not set up to adapt to change quickly, no matter how necessary the change may be, nor how well the idea is planned and presented. It is unfortunate, but such an organization needs a disruption of the existing systems, as mentioned in the third section (Change Management) in Mr. Hertz's article. I would recommend that top-level management needs to be engaged in an exercise that will "prove" (whatever that means in the organization) that change (small and large) is needed, and then they need to be guided into how to create a culture that allows for change, small or large.
I completely agree with you on this Harry. Good clarification to differentiate change (through continuous improvement and innovation) from change management.
W. Edwards Deming remarked that if he was to reduce his message to management to just a few words, it all had to do with reducing variation. This statement represents an unrecogized axiom. "An axiom is a maxim widely accepted on its intrinsic merit; a statement accepted as true as the basis for argument or inference: an established rule or principle or a self-evident truth. A maxim is a well-known phrase that expresses a general truth about life or a rule about behavior." Understanding variation would lead to the conclusion that "continuous improvement" includes both incremental (continual) and non-incremental improvement (revolutionary, discontinuous, transformational, et.al.) ALL employees are involved in project, process and quality management and require the knowledge and understanding of variation in support of continuous improvement. Deming estimated in 1986 that it would be another 50 years (2036) before "... its all about reducing variation" became more common knowledge. An broader description of variation supporting the axiom available at the following: http://asq.org/learn-about-quality/variation/overview/overview.html
Great observations and points made here Harry! I would like to add that change management can also be a process that is integrated into an organization that has accepted change as a constant environment. If an organization is truly focused on meeting or even being ahead of meeting customer needs then the organization needs to constantly process and incorporate changes into their operations. This demands an environment that is flexible and able to incorporate changes as 'normal' business continues. Thanks and Happy New Year, Steve Paulone Malcolm Baldrige School of Business at Post University
Thank you for sharing the "Framework" for organizational change. It would be interesting to think about each of these as a separate account each with an operating, savings and reserve account and then to go on to consider the consequences of not making deposits to these accounts.
Nice Harry. Of the three, change management is event driven and often unplanned. It is usually initiated as a result of a change in the operational environment - e.g. negative results trends, competitive environment changed, new opportunity presents itself, etc. Whereas the other two are continuous activities that are able to be planned.
Yes: change management, continuous improvement, and innovation are the variations of the phenomen of change itself, wich reveals to us the search of perfection Descartes´s thesis inherent to human mind. For an enterprise means to consider the virtualities of each person working for the cause. This afects the management style and is an answer for the lidership failures.
Thank you Harry. Maybe, in some cases we might not realize that there is a local wisdom considered in change/ adaptability especially in traditionalist/ remote land. Example: social responsibilities, local regulations (informal). Tacit knowledge of local wisdom people will influence the way of thinking and culture. Thanks.
According to ITIL, Change Management is a process (note: ITIL moved away from everything being a process in V3) , Continuous Service Improvement is also a process, Innovation can therefore be a trigger for the CSI, or CM processes. If CM is poorly managed, yet documented, CSI kicks in to correct the CM process. (For a good chart of the relationships can be found here: http://shop.axelos.com/officialsite.asp?DI=597910&trackID=002192
As cool as all the comments are stated above, they are all missing the key component of all 3 and that is the feeling of safety that must be present and experienced by all who are expected to be the responders of each initiative. If a staff member does not feel safe in contributing their thoughts, Ideas and perspectives they will flat out not participate and totally lean on the WIIFM. We as continuous improvement people already have a stigma to overcome simply because of what we do when "looking for opportunities" and folks being exposed for the first time already have a difficult time understanding what we are saying and avoid us in the hallways "Here comes that metrics guy again". We all have a tendency to speak like some of the bloggers in this thread which creates in and of itself a form of distrust amongst the ranks, so in any initiative it is important for the Analyst, Facilitator, Change Agent be multi lingual in terms of business speak and mindful of the audience in which the message is being delivered, If we do that, our chances for success in any of the 3 will be much greater and better received.
One of the key requirements for continuous improvement, innovation, and change management is a supportive environment provided by leaders. This includes an appreciation that failures will and should occur and should result in recognition for trying, not punishment. This philosophy is embedded in the Baldrige Criteria.
I agree that an organization must build the tolerance for failures. Leaders must foster the culture of learning not from success stories alone but through failures as well. Though it is easier to influence and transform an organization through successes, there is value in scrutinizing and dissecting the factors that contributed to the failures. We all want to succeed each time, every time but that is not the natural discourse.

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