K6201 SCHOLARLY PAPER PRESENTATIONBY GROUP #16:
GU QIQI (RACHEL)MAO YANLAN (ELAINE)ANG HUN BEET (ELVIN)
Strategic Innovation: Embedding Innovation as a Core
Competency in Your Organization
Defining Innovation
Innovation is a complex series of activities beginning at
“first conception”, when the original idea is conceived;
proceeding through a succession of interwoven steps of
research, development, engineering, design, market
analysis, management decisions making, etc.; and ending
at “first realization”, when an industrially successful
“product”, which may actually be a thing, a technique, or
a process, is accepted in the market place.
Battelle, 1973, p. 1
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Defining Innovation
Benefits of Innovation Cost reduction for goods in widespread use. Development of entirely new goods and services.
Powell & Snellman, 2004, p. 202
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Example #1: Segway PT
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Example #2: The Shipping Container
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Innovation Embedment
The concept of embedment is analogous to the institutionalization of a core competency.
Prahalad and Hamel (1990) wrote about core competency creation especially stress that sustaining core competencies for the long run is critical to creating value.
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Innovation Embedment
Training vs EmbedmentTraining Embedment
Short-term solution Long-term solution
Ineffective at dispersing skills over wide groups of people.
Focused on creating systemic change in the infrastructure
Trainer and trainee relation Self-creating and self-learning
Narrow and targeted approach Broad and inclusive approach
Analogous to changing the outer skin Embedment changes its DNA
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Innovation Embedment
What does that mean to Whirlpool? Embedment refers to a wide range of actions that
assimilate, incorporate, internalize, and imbue the entire fabric or lifeblood of an organization with the mind-set and skills of innovation.
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Introduction
End of Era … At the end of 20th century New levels of expectations to create share holders
value Whirlpool’s CEO & Executive Committee vision Through long-term strategy focusing on customer
loyalty
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Introduction
Removing Barriers with Innovation Barriers to address:
Barrier 1: Long product life cycles. Barrier 2: Indirect customers. Barrier 3: The mental of customers.
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Introduction
What is Innovation? Any product or service that creates unique compelling
solutions valued by their customers, real and sustainable competitive advantages, and extraordinary value for their shareholders.
Innovation should create a clear linkage to their customer loyalty mission, drive breakthrough levels of thinking, and include a wide scope of work from core products to new-to-the-world offerings.
Must drive a reallocation of their resources to be more focused on their strategic objectives.
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Introduction
The Beginning of Innovation at Whirlpool Seeking Models and Partners
With no models among other organizations, they sought a consultant.
Concepts categorized from suggested consultants are, Great Man Theory Skunkworks Creativity and Games Technology Strategy (re)Formulation Product Bells and Whistles Training and More Training
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Introduction
To Take their Own Journey Lack of literature to support the need for innovation
embedment. Strategos was the consultant
They did not want a long-term relationship with Whirlpool and would not create consultant dependency.
They admitted that they did not have all the answers. They wanted to work with Whirlpool to discover new
ways to embed innovation. Strategos' Approach
Refreshing approach put the emphasis on learning for ourselves (Whirlpool).
Creating a systemic approach to embedment that would become self-sustaining.
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Introduction
The Whirlpool’s Organizational StructureChairman and CEO
Global VP of Innovation
Global Director, KM Strategos (external consultants to VP and
I-Teams)
Latin America Regional VP/GM of
Innovation
KM Manager
I-Board Senior Leaders from Latin
America
Latin America Regional VP/GM of
Innovation
KM Manager
I-Board Senior Leaders from Latin
America
Latin America Regional VP/GM of
Innovation
KM Manager
I-Board Senior Leaders from Latin
America
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The Embedment Wheel
Source: © 2002 Whirlpool Corporation. All rights reserved.
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Vision and Goals
Whirlpool's Enterprise-Wide and Innovation Visions
Whirlpool'sEnterprise-Wide Vision
Whirlpool'sInnovation Embedment Vision
Every Home, Everywhere… with Pride, Passion and Performance
Innovation from Everyone and Everywhere
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Vision and Goals
The Five CFPM Whirlpool Statements
Enterprise-Wide VisionEvery Home . . . Everywhere
Our vision proposes a higher order of purpose: Every home is our domain . . .every consumer and consumer activity our opportunity. This vision will fuel the
passion that we will develop for our consumers. This means not just buildingwhite boxes . . . but rather providing a wide range of innovative solutions that
uniquely meet our customers' needs.
InnovationValue Ideas from Everyone and Everywhere
Innovation will become a core competency of the enterprise. Innovation willcome from everyone, from everywhere, and in everything that we do. Our
heroes will be the people who seize opportunities, not just the people who solveinternal problems. We will rid ourselves of processes and practices that hamper
risk-taking and innovation. We will view falling short of risk-taking goals aslearning, not failure. All of this will allow us to continuously win consumer loyalty.
We will value the diversity of our people and their ideas, as only significantdiversity at our company will lead to great innovation. Innovation will allow us
to win customer loyalty and create value.
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Vision and Goals
The Five CFPM Whirlpool Statements
StrategyBranded Solutions That Build Consumer Loyalty
Branded solutions represent an immense transformation for our company. Thesestrategies will change our jobs and how we work with each other and it will
force a personal connection with the consumer. They will create mindsetchanges, actions and outcomes that will build exceptional consumer loyalty to
our brands . . . thus continually expanding our opportunities. This will leadto the growth and performance that we must deliver.
Resource CreationInvestments in Great Ideas
We will understand that the focus and beneficiaries of our resource decisionsmust be the consumer and shareholder. This will require us to look at all of ouractivities with a new perspective. We will create purposeful investments aroundgreat ideas. We will stop feeding the status quo and underperforming activitiesand fund those activities that contribute to our success with our consumers andvalue for our shareholders. We will put our money and talent behind innovative
consumer solutions and invest in doing this faster than anyone else.
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Vision and Goals
The Five CFPM Whirlpool Statements
Organization Structure and Decision MakingOpen. Flat. Fast.
We will organize around our brands as our key connection to the consumer. Wewill be open, flat and consumer-centered. We will drive decision-making close
to the markets and at the appropriate level. We will spell out clear accountabilitiesfor every job that, in turn, will propel us to have a sense of urgency for what
is important. We will create great jobs that challenge our spirit. We will createwell-defined “decision space” where people know their decision-making
accountabilities, and then we will get out of the way and let our people do theirjobs. We will move faster internally than the external world.
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Vision and Goals
Goal Trilogy
Innovation EmbedmentGoal Trilogy
ResultsGoals
EmbedmentGoals
Individual CapabilityGoals
• Tied to the enterprise-wide vision
• Long-term business outcome for innovation
• The Embedment Wheel• Progress on embedment
wheel actions
• I understand the importance of innovation to the company's success
• I understand the importance of innovation to succeeding and contributing in each job
• Knowhow to get help or get started in innovation?
• Understand and use the tools?
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Vision and Goals
Result Goals The amount of new revenue generated from innovation The number of projects in the innovation pipeline The number of intellectual property rights generated The number of people in the process The number of new customers as a result of innovation The number of new methods of distribution and doing
business
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Vision and Goals
Embedment Goals The amount in seed funds set aside and used to fund
innovation projects The number of or diversity of people certified in levels of
innovation expertise The number of change management projects defined to
drive innovation The number of key barriers removed to allow innovation
to thrive The number of jobs changed due to innovation
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Vision and Goals
Individual Goals Number or percentage of people in your work group who
can describe how innovation has changed their job Number of job descriptions rewritten to include
innovation Ways in which people use innovation in their day-to-day
job Identification and removal of barriers to innovation in
your work group Written statements about how each person has used
innovation tools Number of performance appraisals that have listed
innovation goals for individuals
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Leader Accountability & Development
Innovation at the Top Leadership LevelEnterprise Accountabilities Functional or Regional Accountabilities
Deeply understand that there is a critical role for leaders in innovation embedment.
Understand their role in innovation embedment within their unit or function.
Describe the desired outcome for overall innovation embedment at the enterprise and the individual levels.
Describe the desired outcome for overall innovation embedment for their business or unit.
Establish the processes and systems for embedment by populating the embedment wheel and ensuring the proper infrastructure and capabilities building mechanisms are in place.
Employ the processes and systems designed to the embedment wheel and build capabilities in their business or unit.
Ensure that embedment is designed to the individual level, as well as to the enterprise or strategic business unit level.
Personally engage each individual on their staff and ensure that every individual in the entire business or unit is personally engaged by their manager.
Engage in personal learning and embrace the innovation tools and processes.
Reprioritize and set direction to ensure that appropriate timing and attention is given to innovation.
Reprioritize and set direction to ensure appropriate timing and attention is given to innovation.
Monitor and report on progress to business or unit to leadership.
Monitor progress. Model the change in behavior required to embed innovation.
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Leader Accountability & Development
Leaders' Behavior and Cultural Change Co-Creation Time and Space for Involvement Out-of-the-Box Thinking Balancing Day-to-Day Pressures An Innovation-Rich Environment
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Leader Accountability & Development
Developing Leaders' Innovation Skills Leadership Education and Training
Embedment Immersion Workshops Regular Leadership Events Leadership Exchange Programmes (with other Companies) Leadership Training
On-the-Job Experience I-Boards I-Teams and Projects
Development Feedback 360-Degree Feedback and Development Planning One-on-One Coaching
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Culture and Values
Edward Schein (1992), defined organizational culture “a pattern of shared basic assumptions that the group
learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems”
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Culture and Values
Cultural and Values Descriptions of Whirlpool
Potential Cultural Enablers for Innovation Potential Cultural Barriers for Innovation
Midwest or “small town” like Everyone can say no-risk averse
Friendly Lack of alignment and consistency
Ethical Too may programs and projects
Deterministic Not-invented-here syndrome
Integrity Change averse
Respect Not customer centered
Team decision making Silo mentality
Cost containment and quality centered Internal or trade only focused
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Culture and Values
Cultural and Values Descriptions of Whirlpool
Values Description
Respect We do our best work when we trust one another as individuals, encourage diversity in our workplace, value the capabilities and contributions of each person, and recognize that work is but one part of a full and rewarding life.
Integrity We conduct all aspects of our business in an honorable way, recognizing that there is no right way to do a wrong thing.
Teamwork Pride results in our working together to unleash the potential of every person. By working together, we will achieve exceptional results.
Inclusion & Diversity The broad diversity of our people and their ideas is the fundamental foundation for the future success of our company. Differences create value. Inclusion allows everyone to contribute to her or his fullest potential.
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Culture and Values
Cultural Change and the Embedment Wheel Vision Leader Systems Resources Knowledge Management and Learning Systems Change Management and Strategic Communications Rewards and Recognition Measurement and Reporting Systems and System
Alignment
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Resource Creation
Creation vs Allocation
Resource Allocation Resource Creation
Annual or scheduled funding through the planning calendar
Funding as needed
Triggered by a traditional profit planning process; starts with the precedent from last cycle
Triggered by an innovation process, but within the profit planning process; no precedent exists, so each is a one-off Judgment
Generally manages downside risk Seeks out and funds upside potential
Entitlement based, meeting certain thresholds or history of spending
Determinist based, by the assessment of the potential innovation
Trigger: An allowance where everyone gets something
Trigger: A creation where only those with innovation ideas attract funding
Dispersed from the top of the Hierarchy Dispersed close to the ideas
Sources: Internal—funded by the pockets of the enterprise
Sources: Internal, partnerships, venture capitalists, and others, that is, funded by potential investors and the pockets of the enterprise
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Resource Creation
Resource Creation Funding Communiqué People Talent
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Knowledge Mgmt & Learning Systems
Knowledge Management Efforts I-Pipe
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Knowledge Mgmt & Learning Systems
Knowledge Management Efforts Innovation E-Space
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Knowledge Mgmt & Learning Systems
Developing Knowledge Management Knowledge Management Team Knowledge Management Primer Common Knowledge Management Definitions
Knowledge Management VisionWhirlpool will create a knowledge-rich culture with the ability to transform knowledge
and expertise into a superior market value.KM Mission
Build a global knowledge-driven environment which will enable all Whirlpool HR people to spontaneously create, easily capture, and share their knowledge, expertise and skills.
This will be accomplished so that we exploit scalable and sustainable innovative opportunities, support faster and effective customer solutions, and ensure a unique
competitive advantage that is hard to duplicate.
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Knowledge Mgmt & Learning Systems
Common Knowledge Management Definitions
Knowledge Management (KM)KM is the ability to acquire, integrate, store and share knowledge in a continual manner using both human and electronic or technical systems. KM systems address:• What knowledge needs to be managed and shared?• How do we acquire that knowledge?• How is that knowledge stored?• How it is distributed, shared and re-used to create leverage or new knowledge?• KM has a human as well as the technical side.
Types of KnowledgeThere are two types of knowledge: explicit and tacit. Both are critical aspects of a knowledge management system. Often we fail to capture tacit knowledge because it is harder to codify in an information system—it often requires face to face interaction.• Explicit information includes data, records, presentations, and what people report. For us, in the customer knowledge
area, this meant hard data about customer satisfaction, preference, needs and wants, often collected from interviews, focus groups, external sources and surveys.
• Tacit information is what people cannot easily tell you. Tacit knowledge includes: know-how, judgment, routines, experiences and lessons learned. For customer knowledge this comes from direct experience with the customer such as service technicians, people in the call center and trade partner sales people. This type of information is harder to collect and share widely than explicit knowledge.
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Knowledge Mgmt & Learning Systems
Common Knowledge Management Definitions
ExpertsPeople in the organization who have a unique set of skills or knowledge-set in the practice area. These were the people we mentioned earlier that have specific customer information such as people in market research, strategic planning, product development and product design.
Community of InterestGroups of people who, on an ongoing basis, create and share know-how and knowledge and then put that knowledge into practice. Communities of interest may not even think of themselves as a community or as a formal group, and often the group is not chartered or formally organized. For us, the community of practice for customer knowledge was almost anyone in Whirlpool who had a strong interest in the customer and using data and knowledge for innovation or other purposes.
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Strat. Communications & Change Mgmt
Path of Change Management
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Strat. Communications & Change Mgmt
Path of Change Management
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Strat. Communications & Change Mgmt
Path of Change Management Change at Individual Level
Formal Dimension Psychological Dimension Social Dimension
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Strat. Communications & Change Mgmt
Path to Strategic Communications Corporate Communications Innovation Days and Road Shows
Desired Outcomes Change Focus Suggested StrategicCommunications Focus
Business results Outside layer of embedment wheel:Vision and Goals. Written in terms of the desired final state, as well as transitional goals at an organization level. Requires use of measurement and reporting systems.
Three to five strategic recurring themes, to be used in all major communications for all employees.
Embedment Second layer of the embedment wheel:Review of all categories of the inner layer at the organization level.
Customized to groups or strategic business units. Information sharing and interactive. Continually ties changes from the embedment wheel to the overall outcome.
Individual change Strategic communications and change management:Measurement is done using the commitment curve and review of leadership accountabilities and development.
One-on-one communications, customized by where each person is situated on the commitment curve.
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Rewards & Recognition
The Power of Intrinsic RewardsIndividual Reward Programs
Getting Asked to the Party Becoming a Strategic Thinker Increased Marketability and Job Potential Expanding their Networks Being Free to Think Outside the Box Running Their Own Business External Recognition Leaders at the Middle Manager Level
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Rewards & Recognition
Team Reward Programs Part of an Innovation Team and Strategy Visibility with Senior Leadership New Friends and Diverse Views New Ways of Working as a Team
Organizational Reward Programs Balanced Scorecard Measures Financial Systems Communications
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Measurement & Reporting Systems
Measuring Embedment Business Measures Embedment Measures
Measuring Embedment by Going Around the Wheel Measuring by Executive Committee Measures Measuring by Innovation Board Measures
Individual MeasuresSystem and Process Alignment
Human Resource Product Development Finance Systems Other Systems
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Conclusion
No idea at the moment…
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Questions & Answers
Thank You!
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