Customers’ needs are not static, they keep changing and so do businesses. Businesses are faced with the challenge of making strategic decisions on how change will be implemented. Innovation and invention in a company are changes that need to be natured and supported. The challenges come when a business is doing well, and an innovation to change its course of action is comes-by with the aim of better future.
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Management must weigh the options available on whether to remain in the current operation state or move to a risky or un-tested structure that do not guarantee success current or future success (Fred,2008).
Innovation cannot be limited to certain sections of a business but generally can take many forms; it can be an innovation in products and services produced or internal processes like marketing, human resources and information technology.
Innovators in a business in most cases are the employees who well understand their companies strengths and weakness, or may be from a new entrants who comes with a different approach of doing things. Management have the task of tapping these intellectual properties in human resources for an effective innovation. It is argued that one of the reasons why businesses have a longer life than human beings is innovation.
They keen changing and innovating better ways to work and remain competitive. Phillips Lightening Company is an international company incorporated in 1891, by y Anton and Gerard Philips. Initially the company was called Philips Gloeilampen Fabrieken N.V.
The success and the longevity of the company are vested in its innovativeness (Phillips Lightening Company Corporate Website, 2010). This paper discusses management of innovation in Philips Lighting Company.
Brief Phillips lightening company
Since its incorporation in 1891, Phillips has grown from a small business to an international multi-billion company. The company have launched new products in the market in its effort to remain competitive.
Among the innovated products include X-ray tubes earlier in 20th century, in mid 20th century, the company innovated Compact Cassette in the 60s, which it upgraded to Compact Disc in early 1980s, in 21st century, the company have innovated Ambilight TV.
The innovations are enabled by a deep understanding by the company of the need to innovate. In the company, an innovation is generated internally but its research and development team, which is one of the most robust in the world, plays a significant role in the innovation.
Innovation does not always guarantee a success, in 2000, the company was innovating fast and the time it was a leading bulb seller in the world only to innovate and suffer a loss of EUR 3,206millions. The following is the process that the company have undergone for successful innovation:
Shared vision and leadership
In case of an innovation, the top management of Phillips is actively involved. When an employee has come out with an innovation or invention, the company policy allows the employee to consult either the immediate supervisor or anyone else whom he thinks can undertake the innovation positively.
If the innovator comes with an idea and shares with the supervisor, the supervisor has the role of discussing the innovation at supervisors meeting. From there, it is passed to management at departmental level and finally to the top most management. At all this time the employee is the one whom credit is accruing.
In 2000, there was a meeting called “five minutes of silence”, the top management had called department leaders to come and discus on which method they can use to innovate. It was an open forum where the managers were asked to air out their views.
After five minutes every one trying to think on what to say, they were able to open up and discussed at length the way forward of the company. They developed a different vision and rapped everything with the saying that innovation is doing what you do better. The meeting served as a reminder to the managers of what they already knew that it is their task to enhance innovation in their company.
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For an innovative mind to develop there is need for an appropriate combination of employees. Proper combination does not mean highly trained or experienced employees because innovation can even come from the least learnt in a department.
It requires a combination of highly knowledgeable people, people who may not be very established but have a developing mind and researchers. They are not locked in a room and told to innovate, but are offered the necessary support as they work together to develop better ways of doing things.
After the 2000 meeting at Phillips, the management decided they needed to align their employee in a ways that can yield better result. In 2001, Central Lighting Development Lab developed a visionary team that was composed of four team employees of equal gender representation. Two of the team members were highly experienced in the department while the other two were new to the department.
The role of the team was to inspire the department to come with better ways of doing things. They ran a program called “out of the box” , the program took only one year and it invented Ambilight TV.
Alongside with the team of four, there was a team of four senior management, they were asking simple question to Phillip employees so they can trigger their minds to think of an innovation. The second team was called ‘New Business Creation’ (NBC).
From the above innovation of Ambilight TV, it is clear that management took deliberate moves to tap intellectual assets. They set up mechanism, which facilitated communication and innovativeness (Seebode, Harkin and Bessant ,2009).
After an idea has been developed, the person who has taken up the innovation, mostly the manager or the person who have come up with the idea determines its success. Not all innovated processes, products, or services are tested. Some are left to go and some innovations are tested.
The breakthrough that was attained in 2001 triggered the management to think of how they can have such programs in future but this time in a continual way. The CEO himself started ‘Think the Lighting Future’ project (TTLF), which members were senior managers to support the organisation to develop and tap intellectual assets of their teams.
They even set a financial target that they were to attain in a period of five to seven years. They wanted to have ten percent growth rate, which was approximately an addition of EUR 500 million in profit. The project did not immediately yield results.
It took time and after one year, they developed ‘Atmosphere Provider’, a project targeted at creating an atmosphere of innovation. In the project, management style and organisational culture of the company was changing were they started adopting a freelance culture. Pioneered by the senior management, the program was easy to develop and implement.
After an innovation, the promoter should be well acquainted with the new process or products to be developed. This will assist in making others understand what direction the company is taking.
Effective team working
Developing an orchestrate team is important for successful innovation and support for an innovation. A team is composed of complimentary people mostly taking similar tasks or developing a certain project.
How well a company blend the available talents will assist in creating an innovative atmosphere. Teams should be able to listen to each other, and the team leader should understand the potential of all his team members (Ettlie,2006).
In July 2003, Phillips launched Atmosphere Provider Program: a program that was aimed at developing strong teams. People were interchanged in different departments and the best combination was gotten. The company manages its human resources in small teams, which are mandated with the task of undertaking a certain program. In 2000, there was the “out of the box”, new Business Creation’ (NBC) among others.
They were incorporated to assist departments and undertake different project. There are main production teams and support teams like research and development. In the case of innovation, marketing and research and development team since they are more close to the consumers and the market offer a company input information on what they should do. They are strong posts in innovation.
High creative environment
To invent, create and innovate, there is need to have an environment that facilitated these three business elements. The management and the employees should have free and effective flow of information where they can exchange ideas. Other than office supervisor- boss interaction, there is need to have outdoor activities together.
They relax the mood between the employees and management a move that facilitated better communication and innovation. When employees and top management communicate freely, they are likely to develop better processes and products.
A strategy that facilitates innovation is recognition of past innovators; they should be noted as people who have made history to the company. Human beings are motivated by being recognised and thus a company with such kind of policy will have motivated staffs as far as innovation is concerned.
Phillips maintained teams of applications, technologies, business models, new alliances, and the teams were given the necessary resources that they required when undertaking their activities. This combination and dependency among the teams gave rise to ‘Light Embedded in Furniture’ innovation.
High involvement teamwork
Innovators should be people who understand current processes and products/services and see a gap that the company is not fulfilling. In the case of Phillips, employees have been the major innovators as they learn processes that they undergo every day and look for better ways of doing thing. Eventually an innovation comes by (Phillips Lightening Company Corporate Website, 2010)
External environment as an element of innovation
Businesses operate in environments that have other players, government, shareholders, creditors, customers, society among others. External environment can be a source for innovation. It may offer its recommendation to research and development team, marketing, or call centres of an organisation.
Through customer complaints and compliment, a company learns where it is not performing as per societal expectation and focus on such areas to innovate. What the competitor is offering can also trigger innovation. In shareholders meetings, some innovative mind can be gotten or triggered. The system is called innovation by crisis (Seebode, Harkin and Bessant ,2009).
Phillips innovation cycle
After an innovation has occurred in the company, it goes through various stages before it reaches to the final customer. The following is the cycle of innovation:
This is where the company develops the idea and sets all processes to go. Any support from the top management and team members is sort so as when launch is done, then the company gets on business. The stage involves:
- Setting a brand tag
- key skills for leading incremental product innovation
- create product l believes and positional statements
These processes are internal though products, services or process are set to go
Prototyping and market testing
This is market entering. The marketing team plays the most important role at this stage since it is supposed to sell the products and services to the people. Market segments are created and target groups established. The stage is important as it gives the response that new goods are getting form the market.
Creating alliances and accounting for the changes
After successful innovation, measures to strengthen the new system are put in place. They may involve having alliances with other companies, mergers or even acquiring some companies. Returns from the new system are counted and room for improvement created (Seebode, Harkin and Bessant ,2009).
Globalisation has increased competition among service and goods industries. To remain competitive, a company needs to innovate, invent and be creative. Managing innovation in an organisation is a deliberate move by management; it should be supported by all teams.
Phillips Lightening Company has been in operation for over a century and remains relevant and competitive in today’s business environment. Its success is in innovation that it undertakes to fit market needs at a particular time. Phillips has motivated teams and provides a creative environment. Any small innovation gets support from top management.
Ettlie, E.,2006. Managing innovation: new technology, new products, and new services in a global economy. Burlington: Butterworth-Heinemann.
Fred, D. ,2008.Strategic Management: Concepts and Cases. New Jersey: Pearson Education.
Seebode, D. Harkin, G. and Bessant, J. ,2009. Managing Innovation. Web.