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.

Innovation in Education

Economic development has brought with it changes that have resulted in changes in basic needs of mankind.  What was considered basic as "Roti, Kapda aur Makaan" moved to "Bijli Sadak aur Paani" has now evolved to "Education, Health & Safety".  While there is a lot to be done in each of these areas, the one area that can have a transformative effect on India's fortunes is education.

From the Gurukool to today's school, education in India has seen change over the years with influences from the Gupta dynasty, the Moguls, the British and us ruling our own Education destiny.  Education being a universal right has resulted in literacy rates (as defined by the Government) to be as high as 65% and student enrolment rates of rural children between the ages of 6-14 to be 96.5%.  Although the numbers look impressive, there is an urgent need to improve the quality of education.The Job to be Done

In getting the job of education done, there are several innovations visible across the Indian and international landscape.  These are catering to different user segments: consumers, ie people who have access to education and are pursuing it as well as non-consumers, ie users who do not have access and attempting to get the core job of education done as well as getting done jobs ancillary to education such as developing reading facilities, obtaining additional learning support, clarifying specific questions etc. 

The below table highlights the different strategies for driving business growth.  These strategies can be a very useful reference to explain the innovation efforts in spreading education.

Table: Strategies for Driving Business Growth

	Consumer	Non-Consumer
Core Job	Quadrant 1: Core Market Growth Bringing better solutions to existing consumers to get the core job done better	Quadrant 2: Disruptive Growth Bring disruption by entering the low-end or new markets with lower performing, cheaper alternatives to non-consumers
Related Job	Quadrant 3: Related Market Growth Bringing new solutions to existing customers get related or ancillary jobs done better	Quadrant 4: New Market Growth Bringing new solutions to perform jobs for which adhoc or no good solutions exist

Quadrant 1: Current Job of Education for Current Students / Learners

In this quadrant, the focus is to improve the current ways of educating existing students and learners.  Several examples of good work in this quadrant exist.  Educomp’s Smartclass improves existing teaching methods by bringing technology into the classroom.  The Smartclass complements the classroom style of teaching with well researched, mapped to curriculum digital modules which are projected in the classrooms to elucidate and explain concepts. Increasingly, schools and colleges are creating curriculum that appeals to the whole brain by having greater interaction in the classroom, having project assignments and group work.  Using learning applications created specifically for tablets/iPads that provide interactive text-books, videos and on-line tutorials, further enhance the learning experience and enable long term retention of concepts.

Quadrant 2: Current Job of Education for Non-Consumers

Innovation efforts in this quadrant has been largely the brain-child of not-for-profit organizations.  The Azim Premji Foundation is a prime example, being a strong force in making quality education available to those that don’t have access.  Their Foundation has created Field Institutions at State and District levels that deliver programs on teacher development, education leadership development, assessment reforms and technology deployment.  The Institute for Assessment & Accreditation has been setup to develop standards of excellence for various institutions involved in the education system, assessing / accrediting these institutions against the standards developed and facilitating their improvement.  Lastly, the Foundation also has setup the Azim Premji University, a not-for-profit, autonomous university, a first in Karnataka.

In the developed world, a leader in attracting non-consumers is Khan Academy, a not-for-profit organization based in the US.  What started as tutoring relatives online turned into Khan Academy, whose mission is “to provide free world-class education for anyone anywhere”.   Khan Academy offers on-line courses for a variety of subjects such as Mathematics, Science, Humanities, Economics and Computing.  What makes these courses interesting for students is the interactive challenges, assessments, and videos included as part of the course.  The outcome of these efforts is that Khan Academy today reaches out to 1 million students, with close to 30 million lessons delivered every month.

A business model Innovation In Education is the concept of massive on-line open courses or MOOCs, as they are commonly called.  MOOCs are on-line courses being offered by several educational institutes on a complimentary basis (although certification may cost).  MOOCs provide for participants to connect and collaborate with each other in their learning.  The work done by any participant is shared making it open and accessible to all.  Today one can enhance their learning by selecting courses from the best universities such as MIT, Harvard and Carnegie Mellon amongst others.

Quadrant 3: Getting related jobs done for current learners

In this quadrant, the focus is on ancillary jobs related to providing core education, for eg, enabling children to play certain sports, helping them with their homework, testing knowledge levels of students etc.  A prime example in this quadrant is Hippocampus.  With a sole intent of getting children to specifically read, Hippocampus set up its first children’s library in Bangalore with limited success.  Hippocampus’ breakthrough came through a simple innovation of colour coding books based on difficulty levels and the amount of text in the book.  This allowed children to pick books they found more appropriate to their current ability and which in turn has given a massive fillip to reading levels amongst children. 

TutorVista is an on-line tutoring service that parents and children are turning to in order to complement learning from schools/colleges.  TutorVista provides on-line one-on-one tutoring on various subjects.  The tutoring is available 24/7 and is manned by experienced tutors.  One can also use this as an add-on service to clarify specific concepts and queries or get help with homework, apart from learning specific subjects in full.

Quadrant 4: Getting related jobs done for non-consumers

In this quadrant, innovation efforts are linked to helping get related jobs done for non-consumers.  The Infosys Leadership Institute is a classic example wherein its aim is to enable Infosys’ potential leaders hone their leadership skills and groom them to take on such positions.  The Leadership Institute’s programs are focused on strategy, change leadership, entrepreneurship and relationship amongst others.

Conclusion

For anyone in the field of education or wanting to contribute to its proliferation, the above growth strategies are a unique way to decide where to concentrate one’s focus.  For eg, an education institution, by constructing the above table based on its current work conclude that its work in getting the core job done for existing consumers is satisfactory, though there is a need to have a greater reach-out to non-consumers and hence that area becomes a focus.  That would give a much sharper focus to one’s efforts to increase the learning quotient in not just India, but across the globe.

The Innovation Process . . . What’s that?!

The term ‘Innovation Process’ seems almost like an oxymoron when you first read it. The first question that may hit you is - Can Innovation really have a Process? Subsequent questions that may come up would include - What would the steps be making up this process? How can we measure this process and its results? Can it be replicated across people? Teams? Companies? Industries? Countries? Cultures?

Sample this - Edison had set himself a goal of producing “a minor invention every ten days and a big thing every six months or so”. Over his working lifetime of sixty-one years, Edison actually averaged eighteen patents annually or one patent every twenty days – not far from the goal he had set earlier. Besides an inventor, he was also an innovator who was also successful for commercializing his inventions.

The process Edison used was simply – Try, Fail, Learn, Try again, Fail again, Learn again, Succeed. To elaborate on the process, it was actually – Identify Opportunities, Experiment Systematically, Commercialize the Inventions.

If we shift the context from an individual to a company, can there be a simple process there too for Innovation? The most innovative companies in the world in recent times include companies like Apple, Tesla and Twitter who have achieved multi-billion dollar valuations with comparatively smaller revenues / assets. Did these companies have an ‘Innovation’ process? They brought in products that rapidly created and changed global markets, products, technologies and services. Many of these companies have repeatedly innovated to repeat the process with different offerings.

Cut to a few decades back before the onset of the ‘knowledge / smart’ economy. Companies like 3M which are very much a part of the brick and mortar economy but has repeatedly topped lists of most innovative companies.  It still is near the top of the game where innovation matters.

So is there a secret sauce or recipe common for both 3M and Apple? What is similar to both companies from different contexts and industries is that they have come out with revolutionary products serving unarticulated needs of customers. Simply put, the customer did not realize he wanted post-its or an iPad. These companies made these products which became instant successes in brand new categories that the products created from scratch.

What is common to both is that they may not necessarily have ‘Innovation Processes’ but both companies are acknowledged to be the best in providing crucibles and ecosystems to let ideas and innovation germinate, thrive and survive. It may not be that necessary to have mammoth R&D budgets or have dedicated teams to show that companies are innovating.

They may also knowingly / unknowingly follow Edison’s steps in some manner. Here the process translates into –

·         Understand customer needs at the ideation stage in the beginning (without necessarily going to the customer)

o    These stated or unstated needs of the customers can be translated into ‘Jobs To Be Done’

§  E.g. Customer does not want a drilling machine with a quarter inch drill bit, all he wants is a quarter inch hole!

·         Test and prove the techno-commercial viability of the products at the development stage (fail fast may be highly recommended)

·         Optimize resources for a successful pilot leading to product commercialization finally

Companies like Google don’t really have defined processes for Innovation but provide a very conducive environment with all the right enablers to ensure that people are constantly looking and creating the next big innovation.

Companies that want Innovation to be fostered continuously need to provide the right environment, sounding boards and platforms for the ‘processes of Innovation to be alive and kicking.

There can be a phase-wise approach for achieving the above like D4

·         Define (the opportunity)

·         Discover (ideas)

·         Develop (the design)

·         Demonstrate (feasibility and results)

Just like the journey is more important than the destination, the right process can be more of an enabling ecosystem for innovation rather than creating innovation as a process.

Ultimately, innovation is all about “connecting the dots” in new ways that separate you from your competitors—and we believe there are ways to ingrain innovation in your company by mastering the arts of dot collecting…and dot connecting. That coupled with systematic thinking yields unique and creative solutions.