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By The Numbers

Workplace Survey, Findings

1.Workers are struggling to work effectively. 

When focus is compromised in pursuit of Collaboration, neither works well.

2. Effective workplaces balance focus and collaboration. 

Workplaces designed to enable collaboration without sacrificing employees’ ability to focus are more successful.

3. Choice drives performance and innovation. 

Employers who provide a spectrum of choices for when and where to work are seen as more innovative and have higher-performing employees.

 

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INNOVATION FROM INSIDE: THE VOLVO GROUP'S MODEL

Most research on innovation processes has focused on the use of ideas and knowledge from outside the organization in the development of products and services. Usually, companies search external knowledge sources -such as customers, suppliers, universities, research institutes, and competitors- and use information technology to boost internal knowledge absorption that affects process innovation performance.

However, according to Georg von Krogh and Martin Wörter, researchers from the ETH Zurich in Swittzerland, companies can develop innovative processes not only from outside but also from inside the organization. Based on their nine-years research's findings on the Volvo Group, they suggest four practical steps to do so:

 

1. Share information and experiences

Most large global companies encourage their departments to share innovative practices and success stories with one another. “The best ideas that emerge from this sharing become part of the overall corporate program. Empirical evidence shows that sharing process ideas has a profoundly positive effect on operational performance” say “

The Volvo Group works intensively to share process innovation practices among its manufacturing sites. One initiative is a corporate process innovation program that collects best practices from factories in a global database accessible through the Volvo Group’s intranet. Another initiative is a global online knowledge-sharing conference that brings together about 200 to 300 attendees from across the company’s operations worldwide. The conference slogan captures the idea behind intracompany open process innovation: “Everyone has something to teach; everyone has something to learn.”

2. Make visible unresolved issues.

In Lyon, France, Renault Trucks, a subsidiary of the Volvo Group, has a state-of-the-art engine factory. In a central, highly visible part of the factory, quality rejects are put on display. Anybody who visits the factory — employees, customers, suppliers, sister plant managers, collaborating researchers, or other visitors — can immediately see whether the factory has unresolved quality issues.

According to Krogh and Wörter, “such exposure motivates factory managers and employees alike to speed up problem-solving and idea generation, as a way to keep the rejects out of sight. The ‘open’ strategy increases the creativity, motivation, and, most importantly, the pace of process innovation at the plant”. This gentle nudge provided by openness has helped Lyon become one of the Volvo Group’s flagship factories for process innovation, motivating the factory to strive always to be the best possible version of itself.

3. Improve the ability to absorb and implement novel ideas

To make innovations matter organizations must strengthen their ability to make learning from both inside and outside— something scholars call an organization’s absorptive capacity. Absorptive capacity starts with a deep belief that there are important lessons to be learned from others. In addition, management must establish routines for gathering ideas and putting them to use.

A Volvo Group powertrain plant in the Kantō region of Japan offers an excellent example of what strong absorptive capacity can do for process innovation. For decades, the plant management benchmarked its operations against others in Japan and incorporated practices that they found better than their own. After many years of systematic internalization of external best practices, the factory found itself at the “performance frontier.” Seeking new inspiration, the factory teamed up with Volvo Group headquarters to access the group’s powertrain R&D departments in Sweden and external technology partners. Today, managers have tried to combine the best of Japanese kaizen culture with the latest engine assembly technology from abroad — and they’re not done yet: The managers report that leveraging their proficiency in absorptive capacity helps them stay at the forefront of competition.

4. Open up to the outside.

Innovative companies can attain deeper expertise by teaching others, but they often need to search inside their company's network for new inspiration. “The deeper a company searches for a source of external knowledge, the greater the cost reduction it will experience, whether or not it is a leader in its industry” Krogh and  Wörter say.

In a Volvo Group truck assembly plant in Virginia, the management team decided to move their customer fairs from fancy locations to the factory site. This turned out to be wildly successful: During the fairs, old and new customers would ask blue-collar operators questions directly on the line. The customers received passionate answers from skilled people who were not trying to sell anything and just wanted to convey their expertise. At the same time, operators learned firsthand what customers really wanted from Volvo trucks. Opening up to the outside paid off in terms of both higher sales and increased productivity.

Ultimately, Krogh and  Wörter say, “ the success of organizational learning will depend most of all on how well a company knows itself.