Learning Organization Development
Introduction
There had been a huge change that had happened in many industries and market around the globe. All of the said changes are all driven by two of the most important aspects or factors: Globalization and Innovation. Innovation can be considered as a must in any organization or business in the global market. That is due to the fact that the competition in the market is continuing to bloom, and the need for speed is considered as one of the most important strategies in order to meet the demand and preferences of the target market.
Innovation can be considered as the foundation for many economic growths nowadays, but we still have the limited knowledge regarding what it can cause. It is consist of all the types of many intellectual capital as well as intellectual property ranging from know-how to patents up to the high tech as well as low tech inventions of each and every kind (LeValliant 2003).
Innovation, in simple term can be defined as the introduction of new things or approach. It is the incarnation, mixture, or fusion of knowledge in unique, significant, valued new products, processes and even services (Luecke & Katz 2003, p. 2). Each and every innovation begins with the different creative ideas. It is also considered as the successful implementation of the creative ideas inside the organization. The creativity of individuals as well as team can be considered as the starting point for innovation, but it is not sufficient (Amabile & Coon 1996). Furthermore, it is also like any functions in the business that requires different tools, rules as well as discipline (Davila & Epstein 1996).
Innovation process is considered as one of the most important activities that must be done by organizations and businesses in order to maintain their position in the market as well as to continue their research and development process. Many of the organizations and business are using innovation in order to drive their organic growth. It can give many companies to have a quicker access to new and improved technologies, outsourcing non-strategic elements as well as collaboration and relation with new partners. All of the said factors can help many companies to serve their ever more demanding customers in more efficient way (innovaro n.d.)
In order for the company to maintain their competitive advantage as well as influential position in the industry as well as in the market, organizations and businesses must consider innovation as a measurable business value, therefore make the innovation an important part of the life of the business (Anderson & Gimenez 2005).
Above all innovation can be considered as the science of business organization (Baker n.d.). There are many factors that might affect the process of innovation of any company such as the culture, the behavior of the employees or staffs as well as the plan and strategy of the company for change. All of these, together with the ever changing business environment as well as the change in the behavior of the market have made the innovation process more complicated. It had made innovation to become the process that starts with a kernel of an idea and continue to the different stages that will help the company to reach or produce their marketable product that will help to change the economy (Baker n.d.).
Procter and Gamble (P&G): Innovation and Organizational Change
Procter and Gamble or P&G has been considered as one of the most successful company in the world. It is one of the many multinational companies that used the advantages of innovation and globalization for their marketing and management strategies. As a matter of fact, the company had become the top 9 in the 2005 poll of the most innovative company in the world.
Procter and Gamble had formally started its operation during 1837. It is a small store that sells soap as well as candle in the Ohio. The first brand of the company was the Moon and Stars. Furthermore, P&G is considered as one of the minority companies that have established their own department that will handle the process of analyzing the customers’ behaviors towards their products and services.
Innovation as well as organizational change has been considered as the primary weapon of the company in order to continue their position in the global market.
The Ivory soap was the first product innovation of the company. The product had become a great hit with the help of the extensive marketing strategy by targeting the national market as well as establishing sales relation outside the country.
(Ingham 1983).
The biggest innovation of the company ever made was its introduction of the Tide detergent just after the World War II. It was the result of their extensive research about the chemical compound that will pull out grease, oil and other stain from the clothes. This major innovation helps to change the laundry habit of the Americans. It also gave them competitive advantage and edge against their major competitor that time, the Colgate-Palmolive (Ingham, 1983).
In addition to innovation, the Internet, together with the globalization and the consolidation of the different retail production are all come together in order to create a dynamic global marketplace. The company also established different headquarters in different part of the world as part of their strategies in the global economy.
Innovation Process in P&G
Small Team Operation
Regardless of any good intentions, if all of the important decisions in the process of innovation will be made depending on the top management level’s agreement, it will result to time delay. That is why it is important to delegate the decisions to the innovation teams to avoid all of the said delays as well as enable the Fast Innovation to be done. The approval of the top management level is only required at the milestone of the gates of the innovation process (Wentz n.d.).
The company had established a designated team that will lead the innovation process of the company and focus on the process of developing their products as well as their services. P&G had established their Corporate New Ventures Group. The said approach is an advantage to the part of the company due to the fact that the team can focus on the specific challenges as well as help them to develop more ideas in faster manner (Dundon 2002, p. 137).
The Corporate New Ventures encourages new product ideas and then funds the best ones and will be putted into the quick production. All of the teams that are involved in the said ventures are acting in independent manner; the said approach will help each group or team to be more responsive as well as flexible in order for them to be one of the assets of the company (Schuler & Jackson 2006, p. 54).
Reducing Career Risk for Individual
One of the fears of the employees or staffs that belong to the R&D process of the company is their fear in being part of those risky projects. This is due to the fact that the origin of those successful breakthrough or innovation projects are often forgotten, on the other hand, those R&D effort that failed are never forgotten. As a result, it will give the employees the impression about the career risk if they will get off track and associate with a project that may have a conflict with the conventional organization as well as it has a big chance for failure (Leifer & McDermott 2000, pp. 169 – 170).
Individual performance in the radical innovation efforts can be measured with the sensitivity to the risks that each and every individual will take for the organization. Unfortunately, those individual are facing dilemma with regards to their career. People are being punished by demotion for their past sins such as not meeting the projections in the project plan, once that their projects were mainstreamed (Leifer & McDermott 2000, p. 170).
On the other hand, although, more often than not, the reward systems are all adjusted to the performance of the mainstream, and not focus with the radical innovation activities, radical innovators that are push ahead by relying on the intrinsic motivation (cited in Leifer & McDermott 2000, p. 170). The source of their rewards in from their own sense of achievement that is related with the process of making progress in order to bring something that is fresh, thrilling as well as important to the world (Leifer & McDermott 2000, p. 170).
The company had experimented as well as implemented their own system that will enable them to reduce the career risk for each and every individual who are working in the radical innovation projects. The said system is had been undergone several experiments under the Corporate New Ventures Group. Radical projects are all approved by the review board that includes the CEO as well as the Chief technical officer (Leifer & McDermott 2000, p. 170).
The senior management of the company had ensured that the said system will ensure that project members that their career will not be at risk. In addition to that, the rotation of the team members up to the line management position in the mainstream organization will be a part of the complete package (Leifer & McDermott 2000, p. 170).
Involvement of Upper Management
The upper level management as well as support from the global business units can be considered as the most essential factor that affected the Procter & Gamble model. The CEO is also involved in the process of innovation and other related marketing strategies. The company is focusing on the development of different opportunities via the use of the CNBD as well as the business unit engineering, together with their manufacturing planning groups. It is also focusing on the different changes that will help to change as well as ensure that the change can mobilize different resources in quick and fast manner (Leifer & McDermott 2000, p. 214).
Combat Training
P&G also focuses on the values as well as culture of the company in order to drive success by improving their working environment. Due to the fact that the company had started to grow in terms of global market, meeting the top leaders will be impossible due to geographical gap, and it had placed a strong limitation on the personal contact between the top and middle level management. That is why the company had decided to put up their P&G College that had been modeled by the Management Development Institute of GE. The said institution was established in order to reinforce the passion of the company to win as well as to help the company to be equipped with the different strategies as well as tactics to be the best that they can be. The said university will help the employees to get to know more about the culture and values of the company that will drive them for creativity as well as innovation (Dyer & Dalzell 2004, p. 290).
Human Resource Management
The HR department is the one that handles the process of creation and establishing the independent team that will manage their very own resources, hire the team members, create their own reward system as well as report directly to the top management level (Schuler & Jackson 2006, p. 54).
The human resource department of the company is that one that handles all of the different activities as well as supports to the different innovation teams, whether internal or external team that will help them to be motivated in order for them to developed new products that will add to the product line of the company.
Furthermore, the human resource management of the company is also focusing on the external innovation in order for them to expand the creativity as well as innovation process of the company.
By doing all of the said activities, the company had been able to motivate the employees to be more innovative by giving different support such as the budgets as well as the different facilities that will help their task easier.
Furthermore, the HR department of the company also offers their employees the state-of-the-art training as well as development programs (Vance & Paik 2006, p. 282)
Conclusion
Procter & Gamble can be considered as one of the most successful companies in the world in terms of its relationship with their customers. The said success was brought to the company by globalization as well as innovation. Globalization had helped them to become an international company and innovation had helped the company to maintain its position in the market.
In terms of the innovation process of the company, by focusing on the different team as well as letting them decide in independent manner had helped the company to gain more innovations as well as new products that they can add to their line of products. Allotting the control for the innovation process to the team is a great help because it can help the team to save time by direct decision-making in managing the innovation process. Another thing is that it adds up to the motivation and drive of each team to be successful in their innovation process due to the presence of competition.
Furthermore, the reward system is also one of the advantages of the company; this is due to the fact that the reward system varies from one team to another. By doing it, the team leader will be able to know more about the things that can motivate his or her team member, therefore, the need for motivation of the staffs of the company.
Recommendation
In order to improve the innovation process of the company, P&G must continue their team-based innovation as well as their external innovation team in order to maintain the level of their new product that they can offer to their customers.
Furthermore, it is also important to maintain their system in reducing the risk factor in the position of the employees in different important projects. The said system will help the employees to work minus the pressure and stress. The said system will also help the employees to gain their self confidence that will eventually reflect to their work.
Training and development are also important factor for the innovation process of the company. The training and development programs of the company must be updated based on current situation in the global market in terms of technologies as well as learning in the international marketing and management.
Furthermore, the company must also focus on the improvement of the human resource management. The said department must focus on the different programs and activities that will help their employees in the innovation department to be motivated and work on their best. The said activities will focus on the reward and appraisal system.
Above all, the company must maintain its sound and clear communication between the upper level management as well as the lower management in order to maintain the efficiency and consistency of information. It focuses on the objectives and the missions of the company in the industry.
References
2002 Annual Report, P&G, viewed 08 November, 2004,<http://www.pg.com/ann ualreports/2002/pdf/pg_ar2002.pdf>
Amabile, T, Conti R. & Coon R 1996, ‘Assessing the work environment for creativity’, Academy of Management Journal, vol. 39, no. 5, pp. 1154-1184
Anderson, A, Gimenez L, Nunley, D & Baldwin, E 2005, Developing Systemic Innovation in an IT Organization, Intel Corporation, viewed29 April 2008 <http://www.intel.com/it/pdf/systemic_innovation.pdf>
Davila, T, Epstein, M and Shelton, R 2006 Making Innovation Work: How to Manage It, Measure It, and Profit from It. Wharton School Publishing: Upper Saddle River
Dundon, E 2002, The Seeds of Innovation: Cultivating the Synergy that Fosters New Ideas, AMACOM Div American Mgmt Assn
Dyer, D, Dalzell, F & Olegario, R 2004, Rising Tide: Lessons from 165 Years of Brand Building at Procter & Gamble, Harvard Business School Press
Ingham, J. 1983, Biographical Dictionary of American Business Leaders, Greenwood Press
Leifer, R, McDermott, C, O’Connor, G C, Peters, L & Rice, M 2000, Radical Innovation: How Mature Companies Can Outsmart Upstarts, Harvard Business School Press
LeValiant, D 2003, Innovation on overtime, CMA Management, viewed 29 April 2008, < http://goliath.ecnext.com/coms2/gi_0199-1304796/Innovation-on-overtime-with-the.html>
Luecke, R & Katz, R 2003, Managing Creativity and Innovation Harvard Business School Press: Boston
Schuler, R & Jackson, S 2006, Strategic Human Resource Management, Blackwell Publishing
Vance, C & Paik, Y 2006, Managing a Global Workforce: Challenges and Opportunities in International Human Resource Management, M. E. Sharpe
Wentz, R C, The Organizational Structure of Innovation: How Toyota, Procter & Gamble, GE, 3M, IBM, Google, Microsoft, Sony, Hewlett-Packard, DuPont, Honeywell, Whirlpool, The Innovation Machine, viewed 29 April 2008, <http://www.the-innovation-machine.com/?p=83>
Appendices
Appendix A: Top 20 Innovative Companies in the World 2005
Source: (Business Week 2005)
Credit:ivythesis.typepad.com
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