MOI Context

Building the innovative organization

Prof. V.Seshadri SVKMs NMIMS

Components of an innovative organization

1. 2. 3. 4. 5. 6. 7. Shared Vision, leadership, will to innovate Appropriate structure Key Individuals Effective team working High Involvement innovation Creative climate External focus
MOI -Prof.V.Seshadri Ch 3 : Ref 1 2

Components of the Innovative organization ( 1 of 3)

1. Shared vision, leadership and the will to innovate : Clearly articulated, shared sense of purpose, stretching strategic intent; Top management commitment 2. Appropriate structure: Org design which enables creativity; balance between organic and mechanistic. 3. Key individuals: High caliber inventors, Promoters, Champions, gatekeepers. 4. Effective team working: Appropriate use of teams to solve problems
Prof.V.Seshadri MOI - Ref 1 Ch 11 3

Components of the Innovative organization ( 2 of 3)

5. Continuing and stretching individual development: Long term commitment to education and training 6. Extensive and appropriate communication: Within org. ( upwards, downwards and laterally), Between org. and Outside org. 7. High involvement in innovation: enthusiastic and continuous participation and support of senior management. 8. External focus: Extensive networking, Customer focus
Prof.V.Seshadri MOI - Ref 1 Ch 11 4

Components of the Innovative organization ( 3 of 3)

9. Creative environment: Positive approach to ideas, supported by relevant motivation systems. 10. Learning organization: Fostering proactive experimentation; sharing of experiences; University linkages; knowledge capture, documentation and dissemination.

Prof.V.Seshadri MOI - Ref 1 Ch 11

Organizational types
Researchers Tom Burns & George Stalker (1950s) outlined the characteristics of Organic and Mechanistic organizations. These are environments, the former suited for rapid change while the latter suited for stable conditions. These are two poles on an ideal spectrum and they provide some idea of organizational structures suited for effective innovation
Prof.V.Seshadri MOI - Ref 1 Ch 11 6

Innovative organization
It is not correct to assume that innovation occurs only in R&D, where an organic structure often exists. Increasingly, innovation is becoming a corporate-wide task. So, the entire organization needs to be re-structured towards more organic models. However, it is not advisable to take extreme positions.
Prof.V.Seshadri MOI - Ref 1 Ch 11 7

Mintzbergs structural archetypes

Simple structure: Centralized organic type (SME) Machine bureaucracy: Centralized mechanistic type ( McDonalds, Ford, TESCO) Divisionalized form: Decentralized organic form.(L&T. Tata Motors) Professional bureaucracy: Decentralized mechanistic form ( Formal R&D, IT, engineering groups) Adhocracy: Project type organization (NASA) Mission-oriented ( Charity organization like Dignity Foundation)
Prof.V.Seshadri MOI - Ref 1 Ch 11 8

 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

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 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

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 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

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Key Individuals
Key individuals (or sometimes a group) often champion the cause of the innovation and can provide some energy and valuable support when roadblocks are encountered. Example: James Dyson pioneered the double cone vacuum cleaner which revolutionized the industry. Hoover, Philips and Electrolux

Prof.V.Seshadri MOI - Ref 1 Ch 11

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Figure 11.1

The five-stage high-involvement innovation model

2005 Joe Tidd, John Bessant and Keith Pavitt

Table 11.4 Stages in the evolution of HII capability

2005 Joe Tidd, John Bessant and Keith Pavitt

High Involvement in Innovation (HII)

Creative skills and Problem solving abilities are processed by each & every employee. Although each employee may be able develop limited, incremental innovations, the sum of these have far reaching effects e.g. The Japanese quality revolution A study of British companies which have won the Investor-in-people (IiP) award as against an average company shows glaring differences.
MOI -Prof.V.Seshadri Ch 3 : Ref 1 16

 2009 John Wiley & Sons Ltd. www.wileyeurope.com/college/tidd

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Effective Team Working

High level of team working and High Involvement Innovation practices are vital for delivering to customers what they want, when they want and how they want. This is the essence of Mass customisation. Apart from better working, teams result in better fluency of idea generation and in flexibility of solutions developed.
Prof.V.Seshadri MOI - Ref 1 Ch 11 18

Key Elements in high performance team working

1. Clearly defined tasks and objectives 2. Effective team leadership 3. Good balance of team roles and match to individual behavioral style 4. Effective conflict resolution mechanism within group 5. Continuing liaison with external organization.

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Creativity and Innovation

Microsoft's only factory asset is the human imagination - Bill Gates Chance favors the prepared mind - Louis Pasteur

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Creativity and Innovation

Creativity is an attribute which everyone possesses But their preferred style of expressing it varies widely

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Creativity
Creativity in an organization gets stifled if: 1. Dominance of dominant vertical relationships 2. Poor lateral communication 3. Limited tools and resources 4. Top-down dictates 5. Formal, restricted vehicles for change 6. Reinforcing a culture of inferiority.
Prof.V.Seshadri MOI - Ref 1 Ch 11 22

Organizational Culture
Organizational structures are visible artifacts of innovative culture Culture is a complex concept, but it basically equates to the pattern of shared values. Culture can be understood in terms of three linked levels. The deepest is what every individual believes about the world. These shape individual behaviors and these in turn decide the way a group behaves Finally these behaviors creates a set of artifacts (structures, processes, symbols) which reinforce the pattern
Prof.V.Seshadri MOI - Ref 1 Ch 11 23

Tools for sustaining a single-loop learning approach to steady-state innovation.

training and development of staff; development of a formal learning process based on a problem-solving cycle; monitoring and measurement; documentation; experiment; display; challenge existing practices; use of different perspectives; reflection learning from the past.
MOI -Prof.V.Seshadri Ch 3 : Ref 1 24

Invention Factories
Most large manufacturers generate and develop innovative ideas through formal research and development units. They are tailored to focus on inventions. The tasks are quite clear. A strategic plan is made for the inventions they intend to work on, resources are allocated for these and the resources and infrastructure requirements are arranged. The facilities are usually housed in a permanent building which is designed to be flexible to accommodate the people and the labs. Inventions are churned out of these labs which are dedicated for this purpose. similar to a factory. These are euphemistically called Invention factories.
Prof.V.Seshadri MOI - Ref 3 Ch 2 25

Skunkworks
A formal R&D is not the only structure for creating innovative ideas. Some companies have generated ideas by temporarily bringing together talented people with different perspectives with the sole purpose of solving a particular problem or develop a unique concept/product. Mostly these teams are sited in remote settings to keep members focused or to maintain secrecy. The term skunkworks is often applied for these focused project teams.
Prof.V.Seshadri MOI - Ref 1 Ch 11 26

Skunkworks
Companies that have well established technology are often faced with a difficult choice to counter a potential threat from a new technology: 1. Abandon the present business in favor of the rival technology 2. Hold onto the present and make it better. 3. Hold onto the present and begin investing in the new technology as a hedge against the future.
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Skunkworks contd.
The third choice is usually logical: a) The company may not have the required competency b) The culture of the organization may not welcome the new technology c) Existing customers may pressure the company to stay in the old business. The best solution to all these problems is to develop the technology in a separate subsidiary or operating unit. A skunkwork is ideal in this context.
Prof.V.Seshadri MOI - Ref 1 Ch 11 28

Skunkworks contd.
The company sets up an autonomous organization charged with building a new and independent business around the disruptive technology. Such set-ups, free of the power and influence of the mainstream companys customers, can align themselves with a different set of customers those who want the product of the disruptive technology.
Prof.V.Seshadri MOI - Ref 3 Ch 2 29