Managing Innovation and Operations in the 21st Century

Jose Arturo Garza-Reyes, Vikas Kumar, Juan Luis Martinez-Covarrubias, Ming K Lim

• Publisher: Productivity Press
• Year: 2017
• ISBN:
  9781351642989
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book is for directors, consultants, practitioners, and professionals aspiring to effectively manage operations, but is targeted at applying innovation to the management of operations, including supply chains. It is appropriate for those establishing a career in innovation and operations management. This book will: Equip readers with understanding of the nature of innovation, operations management concepts, business models, methods and tools; Explore best practices and most commonly used operations and innovation business models, methods, and tools used by successful organisations; Consider particular operational issues directly impact the competitiveness of organisations

Section III

Understanding the Internal Context

5

The Role of Operations Managers in Building a Culture of Innovation and Continuous Improvement

5.1 INTRODUCTION

It is often common to find in industry that the focus of managers in many innovation and improvement efforts lies on using well-known approaches and making sure that the staff involved in these projects have the right skills to use the appropriate tools. However, an essential part when implementing innovation or improvement initiatives is paying attention to the soft skills. To succeed in these and other change initiatives, employees must be fully committed as well as engaged being part of the process. For this reason, and after having dedicated the initial four chapters to discuss general and external aspects that affect the innovation and operations of organizations, in this chapter, we focus on discussing some key aspects that operations managers must consider to create a culture of innovation and continuous improvement within their organizations. In particular, this chapter provides some insights into the relationship that exists between organizational culture and innovation and continuous improvement. Then, it defines and provides some insights into how the organizational characteristics that facilitate innovation may be developed. Finally, we also offer some suggestions regarding how employees can be engaged in innovation and continuous improvement efforts.

5.2 ORGANIZATIONAL CULTURE AND ITS RELATION TO INNOVATION AND CONTINUOUS IMPROVEMENT

Organizational culture plays a significant role in innovation creation and continuous improvement. This culture is normally deeply embedded in organization’s core values and employees’ behavior and personalities. According to Reigle (2001), culture of an organization is a reflection of their commitment to succeed in innovation activities. Organizational culture can, therefore, positively influence and motivate employees, resulting in the easy acceptance and commitment toward innovation-related customs embedded within their organizations. This signifies that organizations embarking on the continuous improvement- and innovation-led journey based on a process-based approach (see Chapter 1) should foster the right thinking, behavior, and beliefs among their employees. However, the key question is: What type of thinking, behavior, and beliefs operations managers must foster within their employees to successfully enhance processes through either continuous improvement or operational innovation? The section attempts to answer this question. However, before we answer this question, let us first try to identify the most common types of organizational cultures that exist, and relate them to the innovation and continuous improvement cultures.

Over the years, various researchers have proposed a number of ways to classify organizational culture; however, the classification proposed by Handy (1993) is most widely accepted. Handy (1993) classifies organizational culture into four main types, namely, role culture, power culture, person culture, and task culture. Among these, the first two are most commonly evident in industries that are discussed in the following. It is very important for managers to understand the culture of their own organizations as it can assist them in knowing how far their organization is from the desired cultural state that nurtures innovation and continuous improvement.

• The most common culture that normally exists in an organization is the role culture. In this form of culture, the tasks within the organizations are logical and rationally divided such as the use of functional departments (e.g., operations, purchasing, finance, human resources, and so on). Organizations following the role culture are guided and coordinated by managers who exert control through strict rules and regulations. Hence, this form of bureaucratic culture is mostly evident in large and well-established organizations. The evidence reported in upcoming chapters will show that the role culture is normally not supportive of innovation since the procedures and rules often act as barriers for employees in proposing innovative ideas to carry out the organization’s operations. However, it will be difficult to imagine organizations that do not follow any procedures and rules, as some sorts of control are always required to operate efficiently. Therefore, it is challenging for operations managers engaged in building the culture of innovation in an organization following a role culture to foster creative thinking (i.e., innovation) without losing the control of the operations and hence efficiency. A classic example as to how efficiency and innovation can be balanced is that of Google, which gives its employees 20% of their work time to pursue projects that they feel passionate about, regardless of whether those project ideas are outside of their core job responsibilities or the core mission of the organization. Most of these creative project ideas are focused on finding better ways of doing things. The role culture does favor more a kaizen (i.e., continuous improvement) cultural approach, thus focusing on small, gradual, and consistent improvement steps without requiring any radical changes within the organization. Therefore, changes tend not to deviate greatly from the ways of doing things guided by the rules and regulations.

• The second most commonly found culture within organizations is the power culture. This form of culture depends on a central source of power that influences the entire organization. This type of culture is commonly evident in small organizations. Compared to organizations that follow the role culture, organizations following the power culture tend to have less rules and regulations; however, there is no evidence to suggest that these are more innovative. Similar to the challenges faced by operations managers in role culture, here also managers must find a balanced approach promoting innovation without losing those controls to ensure that the organization operates efficiently.

5.2.1 Characteristic of Innovative Cultures

The previous section discussed the two most widely used organizational cultures and their relations to the innovation and continuous improvement culture. It is, therefore, now important to identify characteristics supportive of both cultures that operations managers need to foster within their employees and organizations. In this direction, Von Stamm (2008) identifies experimentation, collaboration and competition, fun and focus, and commitment to innovation as four main characteristics that promote innovation culture. Operations managers can focus on developing these characteristics to achieve operational innovation.

• Experimentation has emerged as one of the key cultural characteristics that operations managers should foster to be innovative. Operations managers believing in experimentation constantly challenge the status quo of the current operations to seek opportunities to improve them and motivate their employees to do the same. The innovation process reviewed in Chapter 1 (Section 1.6) can be used to identify potential ways to improve operations and later experiments with them once the status quo has been challenged. For experimentation to be successful, operations managers must also develop three other subcultural characteristics: acceptance of failure, project termination, and can do attitude. It is a common understanding that not all the plausible ways to improve operations may always be effective or adequate for each scenario. Hence, operations managers need to foster a culture where failure is accepted and used as an opportunity of learning from experience. They should be quick in identifying unsuccessful potential ways and abandoning them as soon as possible. In addition, they should encourage a can do culture, that is, employees should be free to try things out and experiment without a need to request permission in most cases. However, this is only feasible when the organization is willing to accept failures as a likely outcome of experimentation with different and novel ways to achieve operational improvements.

• Collaboration at both internal and external levels is a normal trait of organizations following innovation culture. Hence, operations managers intending to improve operations must focus on developing a culture that encourages close collaboration with core and support functions within the organizations as well as customers, suppliers, and, in general, all key stakeholders. A simple example to support this notion is of Unipart Group, a multinational logistics, supply chain, manufacturing, and consultancy organization headquartered in Cowley, Oxfordshire, UK, that encourages cross-departmental collaboration and includes representatives of customers, suppliers, and transportation groups in its operation improvement activities. Apart from collaboration, some innovative organizations also believe in the value of internal and external competition. Hence, operations managers should also create a competitive environment among their employees such as rewarding the employee who proposes the best approach to operational improvement. Many successful organizations such as American Express and AT&T often sponsor online creativity contests to inspire innovation among their customers.

• The third important innovative culture characteristic is fun, exploration, and play, which Von Stamm (2008) identifies as a fruitful ground for operations managers, particularly in the manufacturing industry where operation procedures are rigid and well established, and are expected to be followed. This is often a challenge for operations managers; however, if they are able to cultivate a fun-filled and explorative atmosphere without losing focus, and ideas and suggestions are encouraged, failure will be more bearable.

• Innovative organizations are fully committed to innovation even when they are going through difficult economic times as they continue to invest in innovative teams and projects, and implement supportive policies. Thus, ideally, improvements through operational innovation must be part of the day-to-day operations of an organization independent of the organization’s current economic status. However, in most cases during hardships, innovation and improvement projects are among the first activities canceled. Therefore, it is the task of operations managers to convince the top management of the value of innovative projects and highlighting the medium- to long-term benefits of those activities for the organization.

5.2.2 Characteristic of Continuous Improvement Cultures

So far we h...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface
• Acknowledgments
• About the Authors
• SECTION I Understanding the General Context
• SECTION II Understanding the External Context
• SECTION III Understanding the Internal Context
• Index