In this issue I will share my experience gained from the conglomerate and its operating companies. For the purposes of this article, I will articulate the Managing for Innovation which is one of the Eleven Values and Concepts in Malcolm Baldrige’s Criteria. As before, I’ll use case studies to show how some of the companies implement them.
To summarize, below are the Eleven core values and concepts of the Baldrige criteria: –
- visionary leadership
- Customer Driven Excellence
- Organizational and personal learning
- Valuation of employees and partners
- agility
- Focus on the future
- Managing for Innovation
- Management by facts
- Public Responsibility and Citizenship
- Focus on results and value creation
- systems perspective
I will deal with the value in bold in this article as follows: Articulated Management for Innovation: What is Innovation in the context of the Baldrige Criteria? As described in the 2005 Baldrige Criteria, it means “making significant change to improve an organization’s products, services, processes, and operations and to create new value for the organization’s stakeholders.” Strategically, innovation should take you to a new dimension of business performance. And you have to add value to the organization in terms of increased market share, capturing new customers and increased profits, etc. It is not about researching new products or services that cannot be marketed.
To be effective, the organization must establish a direction and policy related to product and service innovation to the point of not discouraging such initiatives due to minor failures, but rather managing such activities to produce maximum results. Innovation must be invested in the support process to make it easier to do business with customers
Case study on managing for innovation Most companies have some form of research and development for new products. For some, they can upgrade the existing product for better or different applications. The level of focus on new product innovation is highly dependent on market or customer requirements. It rarely happens if it is done strategically to position yourself ahead of competitors. Perhaps, it is a risk factor to consider where “Total New” certainly requires great courage and good foresight. To play it safe, some prefer to be followers.
On managing for innovation, some have taken the “trial and error” approach in which innovation is carried out on the basis of past experience, feedback but existing skills and test facilities. Investment in new or modern equipment and facilities is often an obstacle to advancing research and development of new products.
The implication of this approach results in lost product cycle time, thus delaying new product launches. The new product has numerous quality problems. Another aspect of Management for Innovation is the support services to materialize the production of new products. The production process is often taken for granted that it can cope with the new features of the newly innovated product.
Until now, innovation has been limited to products and services at the operation level. Innovation for a new business model or business process is not a focus point, you may be at higher risk of making changes.
Opportunity for improvement The organization needs to fully understand the market and customer needs and predict their future requirements. Use that information to manage innovation and get excellent performance. A key indicator to measure such initiatives should be established to monitor the progress and quality of innovations. Value-added measures should be included to gauge the return on investment for new products or services.
Company policies must be established to encourage innovation. Although failure to innovate should be discouraged, it should not have any element of penalty. Such a penalty element in the policy, whether written or otherwise, would harm the innovation.
In summary, you may have noticed the way I articulated Managing for Innovation. It simply describes your goals towards business sense, as this is the scope of my article. Having understood the Managing for Innovation in Malcolm Baldrige’s Values and Concepts, should be taken as a strategic advantage for future business. Leaders can compare their Baldrige Winners CEO to their TQM successes on this value. My next article will articulate the upcoming Core Values and Concepts in Management by facts
Malcolm Baldrige criteria source: http://www.quality.nist.gov/Criteria.htm
