Traditionally, Heinz has been successful at exploiting the strong assets of the
company - achieving excellence in manufacturing and developing and building the
strengths of its brands. However, many changes are occurring in the
marketplace, as organizations react to consumer demand. Some changes are
ongoing and relatively small in nature, whereas others involve giant steps
forward. The most successful organizations are often those that are prepared to
imagine what was previously unimaginable.
Great potential exists for an organization
like Heinz to explore new opportunities and to market new products which meet
the changing needs of a more sophisticated consumer. Heinz could simply have
looked at the existing portfolio, including products such as Heinz Tomato Soup,
Heinz Tomato Ketchup etc. and sat back to exploit these brands which were
yielding year on year profit growth. Instead, Heinz decided to look to develop
and bring to market exciting new products which really meet the needs of
today’s consumers as well as introduce a Heinz culture of innovation.
The creation of the innovation program at Heinz involved a certain amount of measure - in order to establish the objectives and evaluate the success of the same. The initial objectives were to create two to five products, over a nine month period, which were real innovations and also to expose Heinz innovators to new processes in order to inculcate an innovation culture. Before the program was introduced, it was decided that new and exciting products would represent 10% of Heinz's operational income within next 5 years and a working culture would be established which had the ability to switch between measure and madness at appropriate times.
A number of key actions were identified
to remove several of the barriers to innovation and to turn the organization
and its culture around. One of the major requirements of effective change was
that individuals in the organization should be given more time and encouragement
to come up with new ideas. It was recognized that many employees were too busy
to innovate properly. The emphasis therefore changed to allow employees to be
creative. For example:
·
The chefs’ work program now includes
time to experiment in the kitchen on innovation ideas
·
The working environment has been
improved making it more conducive to creativity
·
New consumer research techniques are
being employed, making communication with consumers easier and quicker
The Human Resources Department is also
examining recruitment, induction, training and leadership programs to identify
new approaches which will encourage, develop and recognize the skills required
to deliver successful innovations. The innovation program can thus be seen as a
catalyst to change the culture of the organization.
Another important development has been
the creation of a Heinz Innovation Fresh Ideas Folder which provides a central
collection point for ideas within the organization. Individuals and teams are
encouraged to contribute ideas to the folder. The emphasis is placed on ‘step
developments’ i.e. major, new ideas which will propel the organization forward.
Subsequent stages involve further development of these products with a
continuous program of consumer research to refine the full marketing program
for them.
Culture of Innovation
The Heinz
innovation case study gives some direction on how an organization should build
a culture of innovation. The key elements of an innovation program from the
perspectives of Governance, People and Processes should come together for this
culture to be inculcated. Some of the Governance
areas that an organization should focus on are development of an Innovation Strategy,
setting up a growth council, freezing budgets for innovation programs to name a
few. Similarly, identification of innovation champions and tool experts along
with executive sponsors for the program form the People perspective. Finally, the Process perspective focusses on setting up idea management systems,
trend tracking, ethnography, conducting rapid innovation events, etc.
Some Indian
companies are strongly attempting to build this culture on the above mentioned
perspectives.
With the understanding that the best way to encourage
innovation was to create legends and stories around it, make heroes out of
people who had dared to do things differently and recognize those people, the Tata Group Innovation Forum launched Tata InnoVista in 2006 as a rewards and
recognition program for Tata companies. The objective is to capture innovations
of Tata companies to instil self-confidence among Tata managers, recognize
innovators and encourage innovations in companies, share and learn the levers
used by companies to identify and execute innovation projects as well as build
a culture of appropriate risk taking.
In the pharmaceutical sector, Biocon provides a good example
of a company that recognizes the importance of using ideas from outside to
complement ideas generated from within. Soon after Biocon started working on
its own proprietary oral insulin product, it entered into an alliance with
Nobex, a small American company that had developed an innovative delivery
mechanism for oral insulin. Later, Biocon bought out Nobex’s intellectual
property rights and used these assets to build a strong patent platform in the
oral insulin domain.
By channelizing the energies of 90,000 employees, and
transferring the ownership of change to their hands, innovation can be seen
happening at every corner of HCL. By giving them the right tools, and creating
the right culture, HCL has enabled employees to collaborate, communicate and
innovate freely across teams and across boundaries. A few examples of
innovative ideas and solutions that have been inspired and developed by
employees at HCL are Value portal and MAD JAM for unraveling transformational ideas within the
organization, Wikiportal
and Arkmedes for knowledge creation and sharing across boundaries and Meme for revolutionizing
collaboration and networking at the workplace.
Conclusion
This case study provides an interesting example of the way in
which an established organization can improve to cope successfully with the
dynamic organizational environment. Organizations must take risks - constantly
re-inventing themselves to be more dynamic and responsive to change. They must
be prepared to listen to customers and employees who are most in touch with
processes within the organization. Clearly, some new steps taken by the organization
will fail, but others will lead to the big
wins which secure the long term prosperity.
