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Innovation Management
Module Tutor: Dr Rebecca De Coster
Student I:D: 0409576
Student Name: Hassan Saif
MSc Engineering Ma...
Innovation Management HSK Ltd
2
1.0 Data Networking Co
The data networking HSK Ltd Company was founded in 1997 and has aro...
Innovation Management HSK Ltd
3
1.2 HVAC Market Trends
The aim is to combine and use both companies technical expertise to...
Innovation Management HSK Ltd
4
1.3 High Performance Approach
A proposed approach to planning is to involve everyone in th...
Innovation Management HSK Ltd
5
2.0 Innovation Management
Creativity is very important component for meeting challenges in...
Innovation Management HSK Ltd
6
for us to invent new products in Eco- friendly HVAC systems and we should focus on
acquiri...
Innovation Management HSK Ltd
7
competitor in the market. While differentiation offers a unique dimension to its
customers...
Innovation Management HSK Ltd
8
allow effective two way communication between departments. Furthermore it
would keep all t...
Innovation Management HSK Ltd
9
The Production department workforce has some competency level but not in the
relevant fiel...
Innovation Management HSK Ltd
10
4.0 Strategic leadership
To improve innovation performance leader needs to successfully m...
Innovation Management HSK Ltd
11
To be successful in these functions the leader must follow the following steps. The
setti...
Innovation Management HSK Ltd
12
importance of challenging goals. According to his work the manufacturing employees
produc...
Innovation Management HSK Ltd
13
can effectively use this technique and offer constructive feedback to the employees.
Acco...
Innovation Management HSK Ltd
14
5.0 References
Axtell, C. & Harrington, E. (2000). Shop floor innovation: facilitating th...
Innovation Management HSK Ltd
15
Appendix A: Cross-departmental structure
Innovation Management HSK Ltd
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Appendix B: Performance Measurement Strategy
Innovation Management HSK Ltd
17
Appendix C: Motivational techniques
Table 1: Motivational Techniques
Recognition&
Rewards...
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Innovation management case study

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Innovation management case study

  1. 1. Innovation Management Module Tutor: Dr Rebecca De Coster Student I:D: 0409576 Student Name: Hassan Saif MSc Engineering Management Brunel University, West London 1/12/2009 HSK Ltd
  2. 2. Innovation Management HSK Ltd 2 1.0 Data Networking Co The data networking HSK Ltd Company was founded in 1997 and has around 800 employees with its headquarters in London and Manufacturing facilities based in Kent. The company is committed to expanding in to different areas and has a successful track record in developing data networking business solutions. HSK offers various Services and its Strengths are in the following areas:  HSK offers various data networking products including IP Routing, WAN access, firewall and Ethernet Private Line products. The solutions are compatible with various operating systems and standard based IP routing and switching networks.  Addresses today’s business challenges by providing reliable survivability, security, high speed QoS and remote connectivity.  At the central site, branch office or at home, a broad range of capabilities allows network designers to build an infrastructure exactly suited to the company’s business needs.  Competitively priced products offer network designers an excellent alternative that delivers the functionality and reliability customers expect and demand. 1.1 Acquired Wireless Security Co The wireless XYZ Ltd Company that has been acquired is based in South East with its headquarters in Surrey. It has a workforce of approximately 100 people and is relatively a new company offering its expertise in the commercial security sector. It is a provider of wireless security systems which are designed to help organisations create a secure environment and remain safe from intrusion. It provides range of wireless security measures such as CCTV system, intrusion alarms, card swipe in systems and movement detection devices. The core capability lies with its technical experience as they understand business requirements and have developed various wireless devices delivering cost effective yet user friendly systems. It has also good business relationship with software developers in wireless systems in India and China.
  3. 3. Innovation Management HSK Ltd 3 1.2 HVAC Market Trends The aim is to combine and use both companies technical expertise to develop wireless HVAC systems with optimise intelligent zone to zone interaction and provide wireless reporting to central location. The first step in the development process would be to develop a wireless device that integrates main control features such as temperature set points, Air handling unit (AHU) and Fan coil unit FCU etc into one device. This would make the system more user friendly. The zoning system would save initial cost and energy therefore making the overall system eco-friendly. The commercial sector should be targeted as a main market. A recent research carried out by AMA (American Marketing Association) states that UK HVAC industry is expected to grow by 4% over the next two years 2008-2010 despite the economic downturn. Today the overall non-domestic HVAC market is estimated to be in the region of £1.35 billion. The industry has seen a consistent growth of 2% and above since 2000. The recent growth of public sector and the introduction of environmental legislation have made this sector even more lucrative. More so at present south east would see more development programmes due to Olympics as seen from the Figure 1. Figure 1: Growth Rate of HVAC market
  4. 4. Innovation Management HSK Ltd 4 1.3 High Performance Approach A proposed approach to planning is to involve everyone in the organization in the planning process. The planning process should be decentralized such as TQM as it involves most employees in the organization and is more suitable in this competitive business. Moreover it allows the planning experts to work with the managers in major departments to set their individual goals. This facilitates managers throughout the company to become more involved in finding solutions to problems. As the environment becomes more turbulent and competitive dynamic plans are required to meet fast changing needs. Therefore by shifting decentralization even further down the hierarchical order by working directly with line manager and front line employee’s organizational goal can be achieved. The overall vision and goal of an organization is vital in order to increase employee motivation and commitment. During time of turbulence and uncertainty a powerful sense of purpose and direction for the future becomes even more important. It is also very important that an innovative culture which facilitates learning and creativity should be created. As we are entering into new fast paced innovative market this culture would enable us to keep ahead of our competitors and would also help us to get the best of our employees figure 2 shows the high performance organizational culture. Long term strategic planning is important however for high performance organization it should be accompanied by event-drive planning, rather than focusing entirely on a strategic goal. It is attractive to implement this technique as it is more relevant to current market demands. The hierarchical structure of goals on the next page shows proposed strategic, tactical and operational goals for our company. Figure 2: High Performance organizational culture
  5. 5. Innovation Management HSK Ltd 5 2.0 Innovation Management Creativity is very important component for meeting challenges in organizations of all types. Accordingly the leaders should take specific actions aimed at building creativity in organizations. Innovation management requires managers to have both technical and soft skills in people management to promote creativity. Ideas are central in innovation process and managers need to create an organizational culture that supports creativity both at the individual level and team level. According to Axtell et al, (2000) innovation is critical to the long term success of any organization. Without innovation organizations tend to become less competitive and less desirable to customers hence continuous innovation could provide competitive advantage to organizations. A common problem in technology based companies is the speed of change and the difficulty of forecasting the speed of change. Therefore in fast paced environment the organization needs to be flexible when responding to change and should implement a strategic management approach that consists of clear sense of direction based on a clear vision and mission. 2.1 The Innovation Process Framework Innovation process requires high performance in all of the different disciplines. Innovation management is made of different inter-related factors. Goffin and Mitchell (2005) identified five key areas of innovation management. Innovation strategy: Top management has the responsibility of setting clear vision and mission and should focus on number of key areas. It needs to develop a strategy which promotes and encourages innovative culture. There are lot of opportunities New Product Figure 3: The Innovation Process Framework
  6. 6. Innovation Management HSK Ltd 6 for us to invent new products in Eco- friendly HVAC systems and we should focus on acquiring expertise in HVAC systems and our product strategy should focus on being first to market. Subsequently this would require a large amount of investment in R&D and Production departments. Therefore the top management needs to clearly communicate the corporate vision and should also communicate the role of innovation within the company. Ideas: ideas are a central point of our innovation strategy, consequently managers need to focus on creating an organizational culture that supports and facilitates creativity at both the team level and individual level. According to Barton (1999) the successful new ideas are delivered successfully in an integrative organization rather than in a matrix organizational structure. Along with creating an innovative culture the application of decentralisation is a key part in gaining competitive advantage. This gives people the empowerment at a lower hierarchical level of organization consequently giving them the freedom to explore new ideas. Prioritization: An effective and efficient process is vital to make sure that the best ideas are chosen for development into new products. A resource needs to be carefully assigned for the implementation of innovative projects. A manager needs to assemble the information from across the range of projects to check that the innovation projects are appropriately balanced and matches the company’s innovation strategy. It is important that the management teams review and learn from previous projects. Implementation: This phase should focus on developing new products quickly and efficiently. For our innovative company faster development times can be achieved through effective cross-functional teams, prototyping and testing. The next step is the commercialization of the product hence successful market launch is essential for our new products. The implementation process is a continuous learning process therefore we should learn from each project, so that the future performance can be greater. People and organization: Creating a company culture in which employees are motivated to be constantly innovative is fundamental to company’s success. Effective reward and recognition programmes will need to be maintained. For us it is important to have leaner, flatter and flexible organization structure in place which facilitates innovation and creativity. A company can achieve a competitive advantage over its rival by choosing one of the three strategies commonly used. Those strategies are cost leadership, differentiation and focus. In choosing cost leadership strategy company aims to be lowest cost
  7. 7. Innovation Management HSK Ltd 7 competitor in the market. While differentiation offers a unique dimension to its customers. Finally, focus strategy offers its services to a particular market or group. In our case it would be more suitable to adopt a differentiation strategy as the products we are offering are unique to our competitors such as eco-friendly services; wireless monitoring and control are distinctive features. In today’s environmentally friendly world the governments are drafting in new legislations to help clean the environment. The differentiation strategy would make us distinctive among our competitors and help gain market share in HVAC market. 3.0 Training requirements Leadership and commitment is absolutely necessary to drive the successful implementation of innovation strategy. The interpersonal skills and leadership style should reflect the innovative culture of the organisation as it mainly task orientated. In such an environment task orientated leaders should provide a clear vision and establish a culture in which innovation is visible and widely communicated. Moreover the leaders must have the aptitude to understand the multiple disciplines, processes and projects in an organisation. On the other hand, leaders may need to adapt to different situations with different leadership styles thus flexibility is essential. The relationship-orientated leadership structure should be adopted once our organisation has developed familiarity with HVAC market and has established clear structure and direction. The structure of training should be based on building teams and improving employee performance. By using the situational leadership model (figure 4) the current development of our workforce can be assessed. As the development level of our workforce varies across different department the leaders need to develop different methods and approaches to each situation. 3.1 Leadership style For Sales & Marketing department the workforce possesses a required level of competency and lie in D3 quadrant hence requiring leadership style with low directive and high supportive behaviour. The department should continue to use the same framework of training as before and should share the feedback with all departments. As we entering into new market the sales & marketing department should have a greater understanding of the different HVAC products that we are offering. It is essential to have a clear communication process between internal departments for that reason the use of intranet communication network would
  8. 8. Innovation Management HSK Ltd 8 allow effective two way communication between departments. Furthermore it would keep all the employees informed about the company strategic position. The Systems engineering department has a reasonable level of competency in developing data networking solutions. Nevertheless, the development of new product would require combining existing technology which would place them in D2 level. Therefore primarily requiring a coaching leadership style from the management. It also might be useful to deploy a mentoring training programme where an experienced worker woks alongside a less experienced worker offering support and direction. The Finance department workforce has an essential level of competence required and lie in D3 quadrant thus requiring leadership style with low directive and high supportive behaviour. With the purpose of developing business needs the management should approve the membership of professional bodies such as Chartered Institute of Management Accountants. Employees should be given the opportunity to gain CIMA accredited training and development courses hence allowing our employees to focus primarily on business needs. The management should provide a comprehensive training plan which should include mentoring systems, internal and external course to help employees achieve the professional status. Source: Richard Daft “The New Era of Management” Figure 4: Situational Leadership Model
  9. 9. Innovation Management HSK Ltd 9 The Production department workforce has some competency level but not in the relevant field hence lie in the D2 quadrant. Management needs to provide clear direction furthermore the management needs to develop comprehensive plan for a manufacturing process for a wireless communication and monitoring devices. With the aim of increasing productivity and reducing manufacturing costs a comprehensive training programme should be provided compromising of practical workshops and cross functional training. The importance of cross functional training is highlighted by the following statement “We have great functional specialist but not enough people who have worked in several functions and have a deep understanding of the interfaces between functions. Therefore we need to find, encourage and develop cross functional boundary managers” Massimo Fumarola, Business development manager at Fiat. (Goffin & Mitchell (2005) page 328). The comprehensive training plan would allow high utilization of resources and processes. According to Daft (2006) one method is to introduce “Self-directed learning” training programme. It is a wide ranging training programme which could be successfully applied once the HVAC system has fully developed. Finally the R&D department is at D2 stage as well. The R&D department has a very impressive record of developing various data networking solutions however as we are entering a new market the ability to invent is essential. Moreover we should focus on being first to market as this would give a greater control. With the purpose of developing the competency further the workforce of HSK Ltd and XYZ Ltd should be fully integrated into one company. Here it is important to provide necessary resources and direction therefore the top management should invest in a manufacturing change programme. To facilitate the R&D department in developing innovative products an experienced project manager should be appointed with his expertise in HVAC market. This would allow us to accelerate the development process of our innovative products and would provide invaluable direction for our company. The communication between different departments plays an important role in successful implementation of innovative products and ideas. This is highlighted from this following statement “Innovation is often the result of communication between people who do not have homogenous ideas and se we need to simulate constant dialogue both internally and externally” Torsten Hersberg, Project Manager R&D department, Vodafone Group. (Goffin & Mitchell 2005, page 349).
  10. 10. Innovation Management HSK Ltd 10 4.0 Strategic leadership To improve innovation performance leader needs to successfully manage a wide range of issues from ideas generation to technological changes and from culture to organizational changes. The leader needs to take positive actions to bring about a strategic change, the leader must work effectively to changing customer demands and needs to support, motivate and lead its team to success. The successful achievement of strategic goals depends on identifying opportunities and dealing with external barriers. We need to change our organizational practice and structure to match the strategic direction. A new cross-functional hierarchical structure for our organization is proposed in Appendix A. It is important to use this structure as it provides leaner, flatter and flexible composition of our organization compared to traditional structure. This cross-functional culture compromises of smaller networking teams which have self developed goals and objectives. 4.1 Developing the change process Achieving high performance in an innovative organization requires good leadership. Leaders need to recognize that there are three key stages; moving from current to desired state via a transition state. Therefore to achieve this strategic leadership needs to provide a vision which is widely communicated and rewarded. It needs to link innovative strategy with people development programmes that facilitates innovative projects. There are seven common roles involved in strategic leadership as illustrated by the diagram below. Similarly there are three key functions which are to be achieved (Maull & Brown, 2001).  Achieving the common task  Motivating and Developing the individual  Building and Maintaining the teams Figure 5: Strategic Leadership
  11. 11. Innovation Management HSK Ltd 11 To be successful in these functions the leader must follow the following steps. The setting of a clear vision and focus from the top management is a first step. To help plan strategic goals the top management should be personally involved this would increase the sense of urgency. It is vital that the vision of the company is communicated widely and is transmitted down the lower level of organization such as operational departments. This is highlighted by the following statements “it’s important that everyone in the organization understands their role in the innovation process. Businesses that innovate successfully have a culture where the whole organisations vision and strategic goals are widely communicated and is committed to making new initiative work” Trudy Lloyd, Management consultant, Synectics. (Goffin & Mitchell 2006, page 334). The leaders would then need to inspire its workforce and value their input by creating an open and innovative culture. It is important that while setting strategic goals the concerns of its stakeholders, customers and partners are taken into consideration. The importance of this is emphasized by the following statements. “The strategic goal is about getting everyone involved. It’s just not the voice of the customer. You also need to involve the suppliers, the regularities agencies and all other stakeholders right from the beginning. I think that the best leaders of tomorrow will be the ones that can maximize innovation process by minimizing the interface issues” Pierre Olivier. Vice president of Cobra, Thailand. (Goffin & Mitchell 2005, page 327). The leaders need to lead by example and adapt the learning process to stimulate enthusiasm amongst its workforce. Participative leadership such as joint decision making can create a positive and innovative culture. Axtell et al. (2000) found a positive relationship between participation and employees’ innovative behaviour in a manufacturing plant, measured using self-ratings of employees’ suggestions and implementation efforts. 4.2 Process Theory Strategic leadership could take advantage of well known theories such as “Process theories” to help our employee’s motivational level high. Process theories consist of three theories “Equity theory”, “Expectancy theory” and “Goal setting theory”. For an innovative company like ours it would be more valuable and effective if we adapted “Goal setting theory”. This theory would enable our employees to focus their energies in the right direction. To challenge and encourage our employees highly ambitious but achievable goals should be set. Locke and Latham (Daft, 2006, p708) in their study proposed that specific challenging goals increase motivation and performance of the employees. Ulrich, D. (2008) in his study highlighted the
  12. 12. Innovation Management HSK Ltd 12 importance of challenging goals. According to his work the manufacturing employees produced their most creative work when they felt that they working on complex, challenging tasks. The goals needs to be explicit and clear however if the goals are vague this would create tension and would have a direct effect on the motivation levels. It is essential that once a goal is achieved it is fairly rewarded and is recognized by the company. Figure 6 shows the elements of rewards. Figure 6: Rewards and Recognition 4.3 Management by Objectives (MBO) In today’s industry one approach which is being widely employed to improve business performance is known as Management by Objectives (MBO). Many companies including Siemens, Intel and Black & Decker have adopted MBO and most managers in these organizations think that MBO is an effective management tool. This performance management process is intended at improving organisations performance and is based on principles of measurement, appraisal, action and monitoring. Figure 7 illustrates the main performance parameters that must be used to achieve a consistent and accurate business performance evaluation. There is another illustration of performance measurement technique in Appendix B. Certainly the most important aspect of this process is to evaluate organisations performance based on the set goals. It must also be stressed that Performance appraisal technique process should be based on a rating system which accurately evaluates performance appraisal. Moreover, the managers should be trained so they Organizational goals Project teams goals Individual A’s goals Individual B’s goals Increase revenues from new products by 10% Generate a market share of 2% this year Generate a market share of 2% this year Team reward & recognition Employee reward/recognition
  13. 13. Innovation Management HSK Ltd 13 can effectively use this technique and offer constructive feedback to the employees. According to the research carried out by Buzzotta (1998) the most common errors made while performance evaluation were stereotyping and halo effect. Figure 7: Management by Objectives Source: 1000ventures .com 4.4 Motivational theory’s Using Marlow Hierarchy of Needs theory the workforce of the two companies are at Safety Needs category. As we have just acquired another company the employees at that company would be bit doubtful of how they would be considered by another administration. However, they have the assurance that their jobs would be safe as we would be using their expertise in order to move forward as a company. Once the groups are formed into teams and the transition period is completed “Belongings Needs” category would be achieved. The integration of the employees by using a cross-training programme and by sharing the vision with everyone at the company would make this process a lot quicker. Once we have met our goals using performance methods such as MBO the motivational category would move up to “Esteem Needs” for our workforce. Depending on the company’s success and human relation approach the highest category of needs can be achieved in a near future. There are other well known techniques adapted by companies for decades that have helped keeping its employees motivated these are discussed in Appendix C.
  14. 14. Innovation Management HSK Ltd 14 5.0 References Axtell, C. & Harrington, E. (2000). Shop floor innovation: facilitating the suggestion and implementation of ideas. Journal of Organizational Psychology, Vol. 73, pp. 265- 85. Barton, D. (1995). Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation. Harvard Business Press, Boston, MA.. Buzzotta, V.R (1988). Improve your performance Appraisals. Management Review (August 1988), P 40-43 Goffin and Mitchell (2005). Innovation Management: Strategy and Implementation Using the Pentathlon Framework. Palgrave Macmillan. ISBN: 1-4039-1260-2 Maull, R. and Brown, P. (2001). Organisational culture and quality improvement. International Journal of Operations & Productions Management, Vol. 21 No. 3, 2001, pp 303-326, © MCB University Press Olham, G.R. and Cummings (1996), A. Employee creativity: personal and contextual factors at work. Academy of Management Journal, Vol., Vol. 39 No. 3, pp. 607-34 Richard L. Daft (2006). The New Era of Management. International Edition, Thomas south western, ISBN: 0-324-32331-X. Ulrich, D. (2008). The Twenty-First Century HR Organisation. Human Resource Management, winter 2008, Vol. 47, No. 4, Pp. 829–850. © 2008 Wiley Periodicals, Inc. Case studies Massimo Fumarola, Business development manager at Fiat. Fiat Iveco - Identifying innovation challenges. (Goffin & Mitchell (2005) page 328). Torsten Hersberg, Project Manager R&D department, Vodafone Group Plc - future innovation. (Goffin & Mitchell 2005, page 349). Trudy Lloyd, Management consultant, Synectics. Synectics- driving client’s innovation products and processes. (Goffin & Mitchell 2006, page 334). Pierre Olivier. Vice president of Cobra, Thailand. Case study on Cobra, Thailand- leadership. (Goffin & Mitchell 2005, page 327). www.1000ventures.com (accessed 20th December 2008)
  15. 15. Innovation Management HSK Ltd 15 Appendix A: Cross-departmental structure
  16. 16. Innovation Management HSK Ltd 16 Appendix B: Performance Measurement Strategy
  17. 17. Innovation Management HSK Ltd 17 Appendix C: Motivational techniques Table 1: Motivational Techniques Recognition& Rewards In terms of idea generation it is essential that all the ideas are actively listened to and appreciated thus creating an encouraging atmosphere. At the same time approving any innovative idea which may lead to a future contribution. Recognition could be in any form compliments, and awards. Empowering Employees It works on the principle of power sharing. This method includes everyone in the organisation’s decision making process. This gives workforce the feeling of belonging and of achieving company’s success. As well encouraging them to work creatively and in a task orientated culture. Jo Rotation & Enrichment The employees could develop skills further if they are given opportunity to rotate jobs and get a direct experience of different projects. By promoting this approach flexible workforce could be built hence increasing our company’s competitiveness. Monitoring This is another important aspect in keeping in touch with the progress being made by the employee. However excessive monitoring should be avoided as it could act as a barrier to employee’s idea generation and make them feel insecure. Providing resources Once a decision is made to go ahead with the innovative ideas it is essential that the required resources such as manufacturing facilities and money are available. There is positive connection between the availability of resources and innovative results (Goffin & Mitchell 2005. Pg 284). One such example of providing resources for employees is that of 3M, where R&D staff is encouraged to spend 15% of their working hours on their own chosen project.

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