Introduction
The case is about Toledo specialty glass, which was founded in the early 1900s by Johann Gerhardt. This company prides itself on its R&D facilities following the Edisonian approach which meant that inventors used components and materials they knew well, changing one element at a time closely following the base architecture. Gerhardt emulated the Edisonian approach and filled inventory with tools and numerous chemicals and materials which his employees could tinker with.
After WWII with Peter Gerhardt, founder’s grandson, at the helm, the firm moved into specialty glass production. As the firm grew it opened another office in Long Beach which eventually became the HQ and center of engineering development and manufacturing for the firm (Lee 2003).
Background
Interest in solar cells began during the energy crises of the ’70s, and started off by discussing the available options, brainstorming, and tinkering with the available variables. The project never got mainstream as the HQ wasn’t interested in solar cell manufacturing at that time. Frank Harlan, a new technician, became well known for his ability to come up with newer recombinations that promised better yield and more efficiency. In the meanwhile the company opened another lab in Palo Alto California in Stanford Industrial Park, primarily to initiate and build on contacts with academia and hire top-of-the-line physicists, scientists, and material specialists (Lee 2003).
One of the important hires was Linda Choate, a Ph.D. in Physics from Stanford, who during earlier rotations chanced upon Frank Harlan’s solar cell and was able to calculate and predict the maximum theoretical efficiency of the end product solar cell given the materials Frank was using. Miffed at being proven wrong, Frank intensely began new series of experiments and chanced upon a solar sandwich technique that allowed mono crystalline efficiencies using amorphous processes. This breakthrough if converted into a manufactured product could have had a major impact on Toledo’s image and resultant profitability (Lee 2003).
Toledo glass, where Frank Harlan worked, worked on the principle of empirical designing, iteratively changing products one by one until they found the combination that clicked. It was seldom the best choice available or the most scientifically accurate fit, the first product to satisfy the requirements usually signified the solution. Frank by 1991 had grown to the level of Sr. associate, highest cadre of an employee without a formal college degree, and had 38 patents, and was averse to documentation and analysis of techniques and processes. This drawback repeatedly got him into a confrontation with “those with college degrees” whom he believed that “don’t understand the physical world and how to create the real thing” (Lee 2003:6).
Linda Choate had become well known and was now being slated to head the solar panel division if she could get solar sandwich cells into manufacturing within the next twelve months. The solar sandwich project had to be manufactured in HQ in Long Beach as Toledo did not have a manufacturing facility to cater to this type of work. Linda’s main critique of Frank was his inability to qualify the process and provide adequate documentation.
The CEO had offered Linda the option of closing the Toledo site as no worthwhile project had come out of it unless this solar sandwich project could be moved into production. She knew the potential of Toledo as it provided major breakthroughs while the other lab site Palo Alto screened and accessed information coming out of the Silicon Valley and the Long Beach was good for piecemeal improvement hence the innovative edge of Toledo could not be underscored by any of the other sites (Lee 2003).
Rob Heras, heading Palo Alto center, was 180 degrees apart from Frank and preferred the prestige of having first published a breakthrough in a scientific journal more important than managing a breakthrough to manufacturing for the company’s profits. Rob was more interested in the why than finding a useful product application. He had the leeway to research the ideas and products that interested him while Linda coerced him to also consider the pragmatic applications of the concepts he researched and to demonstrate appropriate commercial returns from his research.
Regarding Frank’s breakthrough, he was critical of the base material that Frank used to demonstrate results – according to Rob the base materials had sufficient impurities to make it difficult to duplicate results without the base material which would, in any case, be a problem once the current stock at Toledo finished. Also, Rob’s first priority was to understand the process behind Frank’s invention before he could duplicate the process and further minor contaminations in the base material drastically changed the properties of the output product and interrelationships between the components (Lee 2003).
It was at the conference call between Rob, his assistants, Frank, Mike Stahl, the VP of manufacturing, and Linda that all of the warring issues were raised and questioned. Rob’s main concern was to understand the intricacies of the process as there were too many variances in the output, well beyond the tolerant range. Frank however was adamant about documenting the process preferring to test out the variables rather than qualify them.
The VP of manufacturing also agreed with Rob that he needed the understanding of the variables to control the output and enable the test product to make it into manufacturing. The issue was the time and effort required to exhaustively test out all the variables and the environmental conditions that affected them. Frank on the other hand was insistent on cashing on his test product before letting anyone else take ownership of the product. Mike Stahl was reluctant to take on the sandwich product from Toledo as he had a bad experience with previous products which according to him were “half-baked processes” (Lee 2003:15).
Mike wanted Frank to give him documented process that was characterized across all parameters and that he set up a manufacturing screen with an accelerated life test so that possible variations in production and variations over the lifetime of products are characterized and documented. The other option, according to Mike, was that Rob understands the process and is willing to set the process up for manufacturing (Lee 2003: 15).
Rob was noncommittal on taking up the charge saying there too many unknowns to quantify before process identification could be done or production could commence and Mike was unwilling to commit on ownership of the process unless it was a process he could get his hands on as he would have to scale up and that required a clear understanding of the interrelationship between the parameters. Linda was in a quandary, how to get the sandwich solar product into production after ironing out the pre-production parameters so that the end product was characterized across all or major parameters. She had to ponder the bigger issues about the future of the two labs – merger or close down of one site-innovation boded major teething problems how to resolve these issues was the question (Lee 2003)?
Innovation at work
Innovation could be described conceptually in different dimensions amongst them incremental, radical, and disruptive are amongst the most important ones. Schumpeter describes innovation as creative destruction. Schumpeter further distinguished between inventions and innovations, citing innovations as inventions that are economically useful and earn profits (Erwin 2004). Hence our solar sandwich project may be a useful invention yet it is Linda’s responsibility to manage the invention to become an innovation and become economically useful and generating profits for Toledo Specialty Glass.
Incremental vs. radical innovation are different treatments of innovation; incremental innovation builds upon existing resources and is competence enhancing, something that the Toledo manufacturing facility is doing, building upon an existing storehouse of tacit knowledge. Radical knowledge will require new resources or knowledge – Rob is radically looking for newer aspects never discovered before for the prestige of publishing novel findings in scientific journals and in this way Palo Alto facility differs remarkably from its sister facility at Toledo. Incremental change will require modicum changes or one change of a variable at a time like in the empirical testing environment so reminiscent of Edison at vogue here (innovation management theory 2006).
Shaping the Future
As Richard Chang says effective job of a leader in changing times is strategic transformation of an organization, shaping how the organization will behave and perform in the coming times (Richard 2007). Toledo has been on the inventing front for a long time, it is time the facility turns into a more productive and fruitful facility else it has the inevitable ‘sword of Damocles’ to deliver the coup de grace.
According to Richard change requirements dictate speed and flexibility to adapt to changing requirements; increase in strategic capabilities for increasing productivity, managing threats and opportunities maintain a compelling and impelling vision of the future – a vision that Linda needs to sell to Frank and Rob and et them to work together with manufacturing to get the product out of the door within the 12 months time frame that Linda has been given. Management of human capital is as important, here enters the questions about over staffing, strategic forecasting, and aligning with organizational goals.
Toledo’s CEO is faced with these issues as he has to enforce nonproductive Toledo facility to deliver or to face the ax as continued investment in R&D without deliverance may not be feasible. Finally, stimulation of innovation and creativity is important and this is quite evident in both the facilities at Toledo and Palo Alto, however, the creative juices need to be channeled in accordance with the requirements and needs of the market. Richard calls this drive the passion that not only creates energy but what inspires action, instilling the spirit to take calculated risks or for the pursuance of newer opportunities, something which Rob needs to learn more of (Richard 2007).
Knowledge creation and knowledge management
Nonaka while comparing knowledge creation and innovation with reflection from Japanese companies’ management, comments on innovation says it is more about creating and recreating the world according to an ideal or vision. In his view knowledge, creation or invention is not just the domain of the R&D, rather everyone participates in this activity. Nonaka further stresses on the individual saying that an individual creates the spark or idea that is eventually translated into organizational knowledge – this requires making knowledge available to others, and this is a continuous concept. Looking at our case of Toledo this aspect is something that Frank needs to be more aware of and more practicing of for enabling knowledge sharing in an effective way (Nonaka 2007).
Tacit and Explicit knowledge
Toledo contains many thousands of person-years of experience in building specialty glass. Tacit knowledge according to Nonaka consists of mental models, associated beliefs, and perspectives that cannot be easily expressed or communicated. Knowledge communication patterns thus may be explained in one of these four basic patterns: Tacit to tacit knowledge transfer occurs in Frank’s team disseminating knowledge by working alongside each other.
This knowledge is rarely available to the organization hence limited usability remains of this mode of knowledge; Tacit to explicit knowledge transfers occurs when tacit knowledge is communicated to others in the company; Explicit to explicit is combining or synthesizing available information into a new format that allows analysis in a different format – there is no addition to knowledge; explicit to tacit information occurs when explicit knowledge is internalized and this knowledge serves to aggrandize employees tacit knowledge (Nonaka 2007).
Ella et al. consider innovation as a composite of exploration and exploitation. Increased exploitation may provide incremental innovation yet may decrease radical innovation while separation of exploratory vs. exploitative units would result in enhanced radical innovation. Exploitation according to the author has two facets; attention to detail, which provides improved quality, and outcome orientation which reduces costs and focuses more on meeting time constraints (balancing innovation attention).
Jan Lambooy suggests that innovation as introduced by Schumpeter denotes five different kinds of possible new approaches including new products, new production technologies, new markets, new organizations, and newer inputs. Innovation is the interplay between the environment and individual action – innovation has the source to provide major changes to the markets and organizations. Dissemination is one of the most important aspects of innovation and without dissemination knowledge loses most of its utility.
Promoting innovation and invention requires embracing uncertainty and innovation can be described as an act of taking decisions in an uncertain environment coupled with an attitude of risk-taking. Innovation has created a bridge between researches carried out in academia with application-oriented enterprises. This was the prime reason that the Palo Alto research facility was formed – to foster links with the academia and who’s who of the Silicon Valley (Jan 2005).
Innovation a process of learning
Globally companies are resorting to all sorts of competitive advantages that give them an edge by leading through innovation, according to Sara and Michael who describe a generic innovation model that is applicable across multiple sectors. This model has main constituents; design and learning. Sara and Michael have quoted Charles Owen saying that design is a creative process that uses tools as well as language to invent, and further with evolution in society our ability to design has also evolved. The design process has base analytic phases of search followed by understanding and ending with phases of experimentation and invention (Sara, Michael 2007).
The design process operates in both theoretical and practical worlds – in the analytic phase it focuses on discovery while in the synthetic phase it focuses on invention or making. As learning occurs there is a gradual shift from theoretical to practical coupled with insights that each learner draws from his/her experiences. Experience has a major bearing on all aspects of learning, whether it may be experience reconstruction or juxtaposing new experiences with older ones in an uninterrupted learning process. Kolb has developed an experiential learning theory and Kolb’s learning cycle is based on premise that people learn differently from experiences, books, etc (Sara, Michael 2007).
According to Kolb in Experiential learning, each mode of learning and adaptation requires different abilities and the holistic learning process requires integration of thinking, perception ability to learn and behaving (Peter 1997). He highlights different styles of fortes- Convergent learner has both the learning abilities of abstract conceptualization and active experimentation. Problem-solving skills are this learner’s hallmark together with pragmatic decision-making skills.
A divergent learner, on the other hand, emphasizes concrete experience and reflective observation making him a creative thinker and also this person is sociable and can empathize and sympathize with people. A reflective learner works with concepts and ideas and finally, a person with concrete experience and active experimentation forge ahead with the hit and trial method, eager to get things done. There is no reason, according to Kolb that people can’t learn other styles or operate in multiple styles (Peter 1997).
Sara and Michael explaining the Kolb model say that individuals with predominant divergent style are good in creative idea generation while those with convergent style preference prefer technical and introspective tasks. Preferences for learning styles are a combination of factors from personality types, educational backgrounds, careers, and the type of task or problem being handled at the concerned moment.
The innovation process again is analogous to Owen’s model moving its participants between abstract and concrete worlds and using synthesis and analysis for generating new ideas, products services, etc. The innovation process starts at the observation stage with diverging style as noted above being most suited.
The abilities required are concrete experience and reflective observation. Once data is generated through this process movement from concrete to abstract realm occurs framing and reframing data is done to extract patterns, insights, and abstract representation of the collected data. According to Sara and Michael framing is perhaps the most difficult of the tasks in the innovation process as it requires digesting huge amounts of data, regurgitating it, and making sense of the result to yield meaningful insights (Sara, Michael 2007).
Linda’s Predicament
After the framing, the data is synthesized into imperatives or converged into imperatives and then it is back to the concrete realm to generate solutions that best match the imperatives. Where does Linda come in this cycle – she has to lead through innovation and enable resultant sandwich solar cells in production format before 12 months deadline. She understands the innovation process, having worked with Frank during the early part of her orientation at Toledo Glass.
She has to move paradigms between abstract and concrete and between synthesis and analysis to achieve her objective. The right mix of people has to be assembled; in this case, Frank has to work with Rob. As we see in the enclosed exhibit 3 showing efficiency data show consistent improvement between Frank’s results over the years after receiving the funding in 1997. The yields have grown from between 15% to 20% bracket to more than 20% in recent years while comparable results at Palo Alto fall far short, even lesser than 15%. Frank has a chip up his shoulder of being the most prolific patent holder in the company and having produced consistent breakthroughs with his Solar product process.
Frank believes he deserves to be beyond the senior associate level into that domain normally commandeered by engineers. Linda should promise him promotion into the coveted zone provided he can translate the process into production with the characterized parameters and accepted tolerance ranges within the 12 months time frame. Rob meanwhile has to get off his academic pedestal and work more towards making a practical product rather than a theoretically efficient one. The manufacturing arm has to work alongside Frank and Rob to ensure meeting the deadline. Linda has the right set of leadership skills, with an understanding of the process and with the ability to leverage the diverse thinking cultures and working styles of the three sites as an innovative team.
The long-term coalescing of the two labs might not be fruitful as each works in a different manner. However, Linda should work with either lab with concrete deliverables as a guarantee of continued survival and funding. Cross-training between the two labs should be initiated for better acclimatization between the two sites and of possible collocation in the future. Rob is interested in the scientific recognition for his research, so he should be offered awards for publishing in a scientific journal, provided he can also find a practical utility for the concerned research. Frank needs to be trained in better qualifying his work and delivering completed projects rather than promising half starts.
As part of the process, Linda has to work towards incorporating tacit knowledge acquisition. Although as mentioned in the case this exercise of tapping the tacit knowledge failed, by redoing the acquisition exercise better collection of tacit knowledge might be made.
Conclusion
The case represents a typical scenario in which decentralized operations occur. This particular instance is representative of divergent style management and of the people representative of that management style that would be present in any decentralized multiple site operation.
Linda has a tall order to fulfill by getting representatives of diverse cultures to work together for a common goal. The goal might be achievable yet the approach would have to be a carrot with a stick as failure would mean the closure of one or both of the facilities and at the same time nonfruition of the promised promotion for Linda.
List of References
- Lee Fleming (2003). Photovoltaic Breakthrough. President and Fellows of Harvard College. 1-24.
- Jan Lambooy (2005). Innovation and Knowledge: Theory and Regional Policy. European Planning Studies Vol. 13, No. 8. 1-17.
- Nonaka, Ikujiro (2007).The Knowledge-Creating Company. Harvard Business Review. , Vol. 85, Issue 7/8.
- Erwin, Douglas H., Krakauer, David C. (2004) Insights into Innovation. Science. Vol. 304, Issue 5674.
- Chang, Richard (2007). Instead of Changing With the Times, Shape the Future. Chief Learning Officer. Vol. 6 Issue 12, p12-12, 1p.
- Peter M. Saunders (1997). Experiential Learning, Cases and Simulations in Business Communication. Business Communication Quarterly. p 97+.
- Sara L. Beckman, Michael Barry (Fall 2007). Innovation as a Learning Process: Embedding Design Thinking. California Management Review. VOL. 50, NO. 1.
- Innovation Management Theory (2006). Web.
- Innovation Management Theory (2006). Web.
- Ella Miron-Spektor, Miriam Erez And Eitan Naveh (2007). Balancing Innovation Attention-To-Detail And Outcome Orientation To Enhance Innovative Performance. Academy of Management Proceedings. p1-7.