Innovation strategy implementation and managing the changes across the organization has become one of the tedious tasks. This project completely deals with the innovation strategies and the organizational structure change management strategies followed by few organizations like Nestle, Vodafone, JP Morgan, Nokia and IBM. To study the innovation strategies of these companies, basic innovation steps taken by them at their organization level and the level of collaborations are considered and these strategies are evaluated. Each and every organization has their own strategies of innovation and managing the changes and each of them are investigated as per the project objectives. Change in the organization structure can lead to many strategic changes across the organization and these need to be handled in a perfect manner. Open Innovation is the common innovation strategy followed by most of these organizations and with the perfect implementation of this innovation method will help in balancing the structural changes of the organization. This project report completely concentrates on the OpenInnovation methods followed by the mentioned organizations and the success factors recorded with respect to this method of implementation (Brummer, 2007).
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Innovation based products are advertised and now a days, a lot of significance is placed on innovation based products. Attitudes of the companies are discussed and in order to evaluate the innovation of the companies, innovation based products are very important. First, check how innovation management is strong in the companies which means to what extent the companies receive money on their innovation based products. Second, check whether the Research and Development departments are strong in the companies or not. Investigate and assess the business links by means of new technologies of markets, politics, industrial production processes, R & D policies, investments, immaterial property rights, business models and technology trends (Coldrick, 2005).
The company bearing its growth and opinions are understandable by the correspondents. A perfect combination of systematic understanding and technology helps in proper implementation of Innovation across the organizations. Balancing the technology and business management may result in some conflicts across the different departments of the organization. Different components of Innovation can be mixed to avoid the vauge operations of the organistation. The respective markets are identified and they are converted to a well educated systems by means of innovation journalists, and their principal interests (L. Kiełtyka, 2008).
Even there are many disputes across the journalism school and the innovation journalists approached to start a fresh professional communities. The basic ideas of innovation are considered and the corresponding companies are encouraged to frame their own ideas with the help of media. Success of any organization purely depends on the innovation strategies followed by them and they are considered as the factors to measure the success by any investor of the organization (Gustafsson, 2005).
Chapter 3:
Case Study Analysis:
3.1 Nestle:
Nestle which is initially a traditional organization has recently changed into a perfect organizational structure. Nestle has accomplished transformations that shows a cognitive impact on the employees as well as the normal people. These developments are not made without any hard work or effort. Nestle has decided to adopt extreme implementations within the firm, as it has found many problems with the hierarchy level of the company. In order to keep up the education level of the employee and to expect for more accomplishment, Nestle has decided to extend the employees and provide better benefits to them. Even many restrictions exist in the pyramid model of the company. Career paths are the restrictions that do not encourage the creative ability, only rising support. The innovative offerings are implemented only from the peak in a pyramid type of organizational structure. Instead of fresh and innovative thoughts experience is preferred for support or promotion. Implementing this kind of organizational structure causes employees to be dedicated to their bosses, which in turn causes healthy competition within complete organization (Braun, 2002).
Any organisaton should follow a set of innovation strategies to survive in the market. Currently Nestle is following a predefined strategies and if they could improve the innovation strategies they can reach their organizational goals. Recently Nestle introduced the concept of Open Innovation and in this process they integrated the external and internal ideas with in the management and the integrated ideas are posted across the technical frame work once the top level management approves these ideas and finally they are introduced in to the market place. Based on this OI strategy Nestle has set a goal to become No.1 in Food industry and they are taking the relavent steps in regard to this. To implement these changes Nestle has introduced few changes in different departments like Technical, R&D and Customer centric patterns.(Carolyn Ott). Nestle has appointed around 5000 employees across R&D departments thorug out the world with an investment of CHF 1.88 billion (Swiss Francs) in 2007. Apart from the development in R&D department Nestle has focused on Collabration programs with some other organizations and these collaborations include
Simple contracts across the reseach field
More than 140 collabrations with different universities
Implementing Strategic Innovation partnership with other organizations (Breen, 2004).
Innovation was ambitious by 15 % in Nestle’s Research and development investments in Beverages and Food. Also 7.5% increase in the matter of consumer facing marketing expenses in regular currencies. And the main drives of the organization growth can be a 70% growth in the products of Nestles Food and Beverages (West, 2008).
Nestle belives in producing the product values to get the targetted profit rate and to achive this Nestle has created a set of innovation strategies to the stakeholders. So that it can improve the business in the best way to produce nutrition food products, health and wellness offerings and also it can improve performance further. Nestle is having greater belief that it can follow right strategy and initiatives to achieve greater success. Nestle is always looking for the quality of the foods and products and quality of life for the customers with specific nutritional needs.
By following strategy and innovation needs, Nestle can be defined by its business models interms of new marketing, service offered, sales and distribution channels, advertising and also by the new loyal policies. Business models can be defined interms of technology portfolio, management team and also by the business industries who are seeking venture capital.
Recently Nestle has introduced the concept of integrating the innovation skills to Leadership. A set of Leaders from different departments are identified and they were made to train each and every employee of the respective organisation regarding the latest strategies that were implmented across the organisation. Apart from the Leadership strategies, Nestle has concentrated on different product development and they have implemented few marketing strategies to reach the consumer satisfaction. It has introduced a concept called CustomerNeeds where all the customer needs are identified and analysed and the required strategies are changed as per the customer feedback and the innovation plans are changed accrodingly.
Nestle has implemented an innovation concept called IdeaStore where all the ideas from different levels of management are collabrated with in the organisation. Different partners of the organisation are trained with the latest innovation strategies of the company for a course of 2 days and a typical IdeaStore holds the key information about the latest innovation strategies implemented by the organisation.
Nestle strongly believes that professionalism is a key to success, and that needs to be implemented in a responsible manner by its employees and management. So recruitment of the right people and their development with the ongoing training is very important. Nestle is following all these strategies and getting success in its field. In each of its market Nestle follows and respects all applicable local laws (Stuckenschmidt, 2007).
3.2 Vodafone:
Vodafone has recently changed its organizational structure in 2008 and defined a set of roles and responsibilities across its team and the hierarchy is as below
Group CEO
Chief of Staff
CEO of European region
CEO of Asia-pacific and middle east region
CEO of Central European and Africa region
Based on this division of roles among the CEO’s it could successfully manage all of the region employees and able to bring them on same platform and with this implementation Vodafone has concentrated on the local markets and improve the customer service quality. Following are few achievements of Vodafone after the successful implementation of Organisation structure
Improved the ability to deliver seamless corporation across the multinational corporations
Facilitated 3G services to the customers
Simpilified decision making (A.T. Kearney, 2005).
Vodafone is one of the successful business organizations. Five key strategic objectives set out by Vodafone, are considered as the landscape in the telecommunication industry. Vodafone is having drastic changes in the matter of consumers increasingly seeking products and services that can meet the communication needs completely. Vodafone is having a wanted desire for values and simplicity, intensifying prices, increasing technology and also pressures which are common and regular. Here are the five strategic objectives:
Stimulate revenue and reduce costs
In emerging markets deliver strong growth
Deliver and innovate on customers total communication needs
To maximize results actively participate and manage the portfolio
To implement the strategies that can improve the coordination between customers and organisation
In the series of presentation, now a day’s Vodafone is outlining its approaches to produce on these five strategic objectives (Stathel, 2009).
Cost reduction:
By reducing costs of the services Vodafone can increase the customers, so that the business can run successfully. Vodafone in Europe follows the strategies like cost reduction and revenue stimulation. These strategies give a more mature mobile market place. By implementing the cost cutting methods across the voice, message and data services, Vodafone has fetched more number of customers across the market.
By resulting in operating expenditure savings, group overheads can also be reduced and expected reduction can be estimated. By doing changes in the technology and services Vodafone is successful in its field (Manson, 2003).
Market rate:
By delivering strong development in up-and-coming markets, Emerging markets are predictable to produce an increasing proportion of Vodafone’s development or growth in the next five years.
Out performance against the original business cases, and significant growth in the markets are targeted by the Vodafone for recent acquisitions. Benefits of establishing a dedicated business can be highlighted by Vodafone in its restructuring announcement and focused on capturing growth in these markets. Robust performance can be highlighted by the Vodafone in its emerging markets portfolio which can be done with its continuous strong growth profile (L. Rutkowski, 2006).
Based on the customer needs and feedback, Vodafone has changed the innovation strategies. Vodafone is having a belief that its approach of mobile centric can be attained by satisfying total needs of the customers and also by providing basic performances like mobility and personalization to the customers.
Vodafone has implemented a set of practice code as per the requirements from customer services. Vodafone can provide data communication services and also mobile voice services in different countries. It provides roaming services in undergoing an agreement with other mobile services in addition with the services like broadband and fixed line services.
It also expanded internationally in some countries by the acquisition of the existing mobile operators. It provided world class service even to the cutomers of the developing countries. For example, recently vodafone had undertaken 67 percent of hutchison-essar telecommuntion shares in India. By doing so it became the second largest cellular operator in terms of revenue in India.
Vodafone has implemented an innovation concept and opened few stores known as Widgest shops, where it has provided call rellaying to the customers, providing a dedicated channel to the customers and unlimited data usage(Stathel, 2009).
Marketing:
Marketing strategies followed by Vodafone has made the company a leader in its field. Vodafone follows the knowledgeble way to get good market rates by reducing prices. It had attracted more number of customers by introducing low cost packages than its competitors. It had even attracted customers from all communities by providing superior quality of service and suitable packages. By providing contractual sales of handsets it had binded many customers to its network.
It had made a tremendous mark in the history of advertising by introducing innovative methods like zoo-zoo ads in India. All this made vodafone to be a pioneer in telecommunication industry all over the world (A. Sokołowski, 2007).
Vodafone has introduced an innovation concept known as Joint Innovation Lab, where different service providers are integrated to share their ideas and these companies include Vodafone, Verizon Wireless, China Mobile and Softbank Mobile. All the four companies use to implement the innovation strategies and develop mobile services and data services as per the customer requirements. JIL will launch new attracting services to the customers as per the technical changes across the market and introduces all new strategies to attract the mobile internet users. Consumers can interact with the global innovation groups and share their ideas with the integrated companies (Piller, 2006).
3.3 JP Morgan:
JP Morgan has introduced a change in its organization structure recently to improve the quality of services provided to its customers. The main intention behind introducing the change is to open few centers of excellence that provide the best of products trading across all the regions. This organization change has effected the JP Morgans Treasury services and it could now able to deliver the world class market leading trading services and supply chain management services. It has appointed almost 100 new supply chain management leaders with few senior management people to implement the proposed organization change.
JP Morgan chase& co is one of the leading banks in the banking sector worldwide. By following different strategies and the structural changes reflecting the strategy, JP Morgan is successful in its way.
JP Morgans performance initiative centres which are around three themes which can be given as
Sales force and customer development: In this particular process the general problems of sales can be defined.
Project managenment
Supply chain management (A. śołnierski, 2006).
These can maintain the balance in between long-term objectives to short term objectives. Based on the above mentioned stages, the performance and the outputs will become more efficient. One can achieve strategy through balancing competing values by increasing stakeholders value as the main goal or primary goal of the business. To maximize economic value, it must balance customer satisfaction, growth considerations and competitive market forces with internal costs (Riedl, 2009).
JP morgan implemented the innovation strategies in integration with the technology and has come up with few modules of innovation and they are discussed as below
Athena: Athena is the most innovative technical tool from JP Morgan where it can be used to estimate the cross marketing and trading process of the organization and this system is used across most of the foreign exchange and commodities systems.
ComputeBackbone (CBC): JP Morgan has introduced a much sophisticated technical advent known as ComputeBackbone where it can make use of more than 5000 CUPs in a grid at a time and this can be considered as the best innovation step taken by JP Morgan.
Core Process Reengineering : JP Morgan has introduced an innovative process known as Core Process Reengineering where it can improve the quality of project life cycle and cross-asset performance. This process can be used for better data change management.
To enhance the client’s service experiences across the technical innovation, JPMorgan has conducted a research and developed a model known as Three-pronged strategy and this is implemented by the organization for service related process enhancement. First the capabilities of the firm are extended under the E-care program.Many web-based capabilities are included in this program and this program also includes integration of service into client’s work flow. The company has introduced the internet services to balance the evolution of services related to cash management to a web-based environment.
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Using this E-care program the client can send and receive information through additional channels flexibly. This program also provides a facility of making easier to answer, by providing direct obtaining or retrieveing of information from a storage device (repositories) and increase clarity through a wide range of information.The client is also provided with an automated inquiry tracking system to better identify the relative position of the service request and to gather service quality reports.These offerings of this E-care program increases the efficiency, develops control, and allows client to enhance accuracy by avoiding data re-keying. It also works as a possible result, so client can gain information at anytime and at any location. Furtherly JPMorgan will also offer the clients the ability to reach service staff live at anytime in online process.
Secondly, to make flawless execution a certainity, JPMorgan has automated this E-care accomplishing process by tracking every component of it using technology.Atlast, the organization is developing its automated process for controlling inquiries by progressing recent functionality and complementary tools that will then increase service effectiveness.The motive of this is to allow client or the staff to be active in performing root-cause analyses and recognizing the possibilities that help the client to enhance directly through a prescribed procedure or to avoid time waste on inquiries.
The crucial part to JPMorgan’s process is its accurate methods for searching processes and products to make modifications that give better results.The company looks forward to the clients to get an improvement in quality of end-to-end service, for example, in some inquiries,flawlessly controlled accomplishments and many other choices with in available channels for initiating service contact (Ogawa, 2006).
3.4 Nokia:
Right organizational structure is very essential in every organization to achieve success with out which even its strategy cannot be successful. So the structure needs to be planned in a proper way.
Nokia has a number of collaborations and merges initially and due to this there are many changes in its basic organization structure. Nokia concentrates on two main aspects before it implements any technical change across the organization and they are as below
Does the organization has technical core competency to manage the change
Does the organization has sufficient time to implement the required change
If the answers to these two questions are negative, then Nokia will try for a new collaboration and outsourcing the change.
To improve the innovation strategies across the organization, Nokia introduced a simple method where the market shifts and drop in the market shares are diverted to the customer satisfaction funds and thus improving that particular department and this process has the following benifits
To drive strategy , resources can be allocated with greater ability
To make sure that the relavent information is escalated to the right people at right time regarding the innovation strategies.
In the financial performance it gives a greater transparency of its technologies and key products which can reflect the effectiveness of the strategy .
Nokia has used innovation network to deal with the changing technologies, likely in mobile phones. In mobile manufacturing industry, innovation technologies are particularly very important where product life cycle is short and the technology changes rapidly. Large companies need to be competent in the global economy in such a way that the firm remains competitive, which challenges the firm to develop innovative methods (Miles, 2009).
It can be divided into three questions:
On product development with whom, on what and why Nokia collaborate?
To explore or exploit the new technologies and how does Nokia use technologies for the transformation of its business?
Till what part does Nokia fit the open innovation paradigm in the overall business strategy?. (A. Arundel, 2006).
Nokia is also implementing the Open Innovation methods these days to integrate the external and internal ideas with in the organization together. Nokia venturing Organisation is focusing on different profitable ventures across different organizations to innovate the new business proposals. Nokia Venture partners are focusing on investing across the mobile and I/P related business activities. Nokia has started a Research center where it has collaborated with around 500 research associates for the perfect implementation of Innovation. It has started a News letter named OpenThread where all the innovation strategies followed by Nokia are published in form of different articles. ForumNokia is the technical forum developed by Nokia and provides space for different users where they can share ideas, comments and technical aspects of mobile usage. Hence we can say that Nokia is making use of Open Innovation to create new products and technologies across the mobile market (Gemunden, 2007).
IBM:
To manage the organizational structure change, IBM has conducted a worldwide survey with the data of around 1500 multinational organizations and came up with a perfect conclusion report. The main reasons for these changes would be because of implementing the customer satisfaction services, to grow the revenue and sales. Even the effect of globalization and change in technology would lead to the organization changes in terms of innovation. As per IBM, there are five important traits in the organization change and they are listed below
Hungry for change
Innovation beyond the customer imagination
Global integration
Disruptive by nature and
Genuine, but not generous (P. Drucker, 2007).
IBM has made the structural change as its core competency with in the organisation and it was successful in implementing the strategies through it. IBM has listed few key factors to manage the change successfully and they are as below
Perfect Leadership
Employee management
Honest communication (Longo, 2007).
To improve the business across the globe IBM has introduced a new innovation method known as ABC, where A is Allignment, B is boundaries and C is Commitment.
Alignment: Alignment mainly concentrates on communicating the business strategies to the end users and stakeholders. This particular alignment can be further categorized in to vertical and horizaontal, where the vertical alignment deals with the translation of business innovation strategies in to organization strategies and creates an implementation plan and once this plan is ready, the implementation procedures are done. Horizontal alignment always creates a new organization unit or modifies the existing ones. By integrating the horizontal and vertical alignment, innovation leaders can motivate the behavioral aspects of the customers.
Boundaries: In most of the cases, strategic partnerships fail because they are typical to manage and collaborate different ideas. The common areas where these collaborations fail will be in the terms of decision making, legal agreements, cross cultures and ownership rights. Identifying a best partner will make these problems to be solved and these partners include potential customers, suppliers and government groups. History and culture should be taken in to account as the partnership terms will be for longtime and understanding the basic boundaries of each and every group is the basic step to be implemented before forming an innovation collaboration.
Commitment: Organisations should be commited to the organization changes and transformations when are working in a collaboration for innovation (Lonsdale, 2009).
Chapter 4:
Conclusion:
Innovative strategies have become the key factor for any organization to enchance their quality of operations and improve the organization performance. From the above discussion it is clear that each and every multinational organizations are following the innovative strategies to mark their place across the international market and improve the product values. By implementing the proper innovation techniques, all these organizations are accomplishing its targeted revenue and customer support across the world.
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