Building a culture of Innovation - A case study

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.