Management of Change, Innovation and Risk
Managing change
Lewin's model: unfreeze (create readiness), move (implement), refreeze (stabilise new norms). Force-field analysis weighs driving against restraining forces - reducing restraint is often cheaper than adding pressure. Kotter's eight steps: urgency, guiding coalition, vision, communicate, empower and remove barriers, short-term wins, consolidate, anchor in culture. Resistance is rational as well as emotional - loss of status, competence or security, or plain misunderstanding - and is met with participation, communication, training and negotiation, not decrees. Bridges' transition runs ending → neutral zone → new beginning; the human transition lags the structural change.
Innovation
Incremental innovation improves existing offerings; radical innovation creates new ones; Christensen's disruptive innovation starts cheap and simple at the low end and moves upmarket. Rogers' diffusion curve: innovators, early adopters, early majority, late majority, laggards. Idea funnels and stage-gate processes screen options; open innovation sources ideas externally; ambidexterity separates exploiting today's business from exploring tomorrow's.
Risk
ISO 31000 process: establish context, identify, analyse, evaluate, treat, then communicate, monitor and review. Treatment options: tolerate, treat, transfer, terminate. Risk appetite is the aggregate risk the board will accept; a 5×5 likelihood–impact matrix prioritises the register; COSO's ERM framework links risk to strategy and performance.
Worked example
A logistics firm scores a cyber-attack on payroll data: likelihood 4, impact 5 → score 20, above its appetite threshold of 12. Reasoning: high–high demands action beyond toleration - treat with multi-factor authentication and network segmentation, transfer residual financial exposure through cyber insurance, and review the register quarterly. Insurance alone transfers money loss, not the reputational and regulatory harm.
Traps
- Treating refreezing as the end of the work rather than consolidation of new behaviour.
- Claiming change fails mainly because of poor communication alone.
- Equating innovation with R&D spend.
- Confusing risk appetite (willingness to accept) with risk capacity (ability to absorb).