Creating a culture of innovation in the Plastics Industrympma.org.my/Documents/06 Paper...
Transcript of Creating a culture of innovation in the Plastics Industrympma.org.my/Documents/06 Paper...
©Petroliam Nasional Berhad (PETRONAS) 2015 1
© 2015 PETROLIAM NASIONAL BERHAD (PETRONAS)
All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the permission of the copyright owner.
Creating a culture of innovation in the Plastics Industry
Ross Gilmour
PETRONAS Chemicals Group
1 October 2015
Malaysian Plastics Manufacturers Association Annual Conference
Future of Innovation for the Plastics Industry
©Petroliam Nasional Berhad (PETRONAS) 2015 2
Outline
Defining why culture important
Identifying your innovation strategy
Assessing your innovation readiness
Designing innovation program setup
©Petroliam Nasional Berhad (PETRONAS) 2015 3
Determinants of organizational capabilities for innovation
Open
Leadership & governance
• CEO leadership style
• Top management team capabilities
• Board
Organization
• Mission, goals, strategy
• Structure & systems
• Resource allocation
Culture (norms, behaviours, assumptions)
• Climate
• Learning & knowledge management
Business processes
• Decision making
• Portfolio & project management
• Business intelligence
Adapted from Crossan and Apaydin 2010
©Petroliam Nasional Berhad (PETRONAS) 2015 4
Organizational culture definitions reference shared norms and values
Patterns of interpretation composed of the meanings associated with various cultural manifestations, such as stories, rituals, formal and informal practices, jargon, and physical arrangements
Martin 2002
The norms and values shared among employees
Hill 2007
The things that happen when no instructions are given
Rajeev Peshawaria (pers. comm.)
Culture implies structural stability, refers to the deepest unconscious part of the group, covers all of a group’s functions, invokes patterning or integration of cultural elements
Schein 2010
©Petroliam Nasional Berhad (PETRONAS) 2015 5
Managers often promote development of the particular cultural types:
a “right kind” of culture
a “culture of quality”
a “culture of customer service”
Implies culture is associated with certain values that managers are trying to inculcate
Also implied are key assumptions:
there are better or worse cultures
stronger or weaker cultures
the “right” kind of culture will influence how effective the organization is
There is often an implication that having a culture is necessary for effective performance, and that the stronger the culture, the more effective the organization
Why should we concerned about culture?
Adapted from Schein 2010
©Petroliam Nasional Berhad (PETRONAS) 2015 6
Culture must be considered in its environmental context
Culture can only be considered in the
context of the environment in which
it exists
It cannot be “good” or “bad,”
“effective” or “ineffective”, nor “ideal”
or “suboptimal” in absolute terms
Cultural insights are most useful
when they helps us to better
understand the hidden and
complex aspects of life in groups
and organizations
©Petroliam Nasional Berhad (PETRONAS) 2015 7
Innovation strategy is a key environmental factor determining innovation culture
How many conference participants
here today are conscious of your
company’s innovation strategy?
What rules does the strategy define for
how you will participate in innovation
activities?
What are the implications of the
environmental factors for your company’s
innovation culture?
How does the strategy and culture define
how innovation is supported in the
company?
Internal
©Petroliam Nasional Berhad (PETRONAS) 2015 8
Innovation strategy is a key environmental factor determining innovation culture
Internal
Technologydriver
Market reader
Need seeker
UOPSiemens AG
AppleXerox
Proctor & GambleDell
Adapted from Strategy&
©Petroliam Nasional Berhad (PETRONAS) 2015 9
Innovation strategies are contrasted by customer interactions and usage of technology
Technology driver - the company creates leading technologies that solve customer needs
Must be a technology leader
Inside-out innovation – the company creates innovations that find or create markets
Driven by R&D and technology, not needs
Need seekers – seek out customers unmet needs and develop and supply solutions
The companies are actively engaged with their customers
Outside-in innovation – discovering needs among existing and prospective customers
Identify needs, then link to capabilities
Market readers – evaluate competitive landscape, forecast trends to identify opportunities
Active in corporate foresighting and competitive intelligence
Outside-in innovation – rather than discovering needs, discover opportunities and generate ideas to address them
InternalAdapted from Strategy&
©Petroliam Nasional Berhad (PETRONAS) 2015 10
Innovation strategies require specific capabilities and must be aligned with business needs for success
Internal
“Market readers”
•Resource management excellence
•Strong supplier / development
partner engagement“Need
seekers”
•Generate deep
customer insights
•Enterprise wide
launch
•Strong market potential
assessment
•Rigorous evaluation of emerging
technologies
•Broad consumer and customer insights
•Strong customer engagement
•Pilot-user selection and roll-out
•Open innovation
•Strong technical risk
assessment
“Technology drivers”
•Detailed understanding of emerging
technologies and trends
•Product life-cycle management
•Rigorous
decision making
Adapted from Strategy&
©Petroliam Nasional Berhad (PETRONAS) 2015 11
Co-existence of different thinking styles supports “business outcomes” and “innovation outcomes”
Open
• Logical
• Seek guaranteed conclusion
• Requires proof
• Looks for precedents
• Quick to decide
• There is right and wrong
• Uncomfortable with ambiguity
• Wants results
“Business outcomes”
Adapted from Martin 2009
©Petroliam Nasional Berhad (PETRONAS) 2015 12
Co-existence of different thinking styles supports “business outcomes” and “innovation outcomes”
Open
• Logical
• Seek guaranteed conclusion
• Requires proof
• Looks for precedents
• Quick to decide
• There is right and wrong
• Uncomfortable with ambiguity
• Wants results
“Business outcomes”
• Intuitive
• “Take your best shot”
• Asks what if?
• Unconstrained by the past
• Holds multiple possibilities
• There is always a better way
• Relishes ambiguity
• Wants meaning
“Innovation outcomes”
Adapted from Martin 2009
©Petroliam Nasional Berhad (PETRONAS) 2015 13
Our personal Innovation Style is also a key determinant of innovation team outcomes
We are all unique individuals
Each one of us has different approaches to innovation
We all have the capacity to be innovative, but we approach innovation and change in different ways
Everyone has the capacity to be innovative
The key question is not “am I innovative”
It is “how am I innovative”
We use a mixture of at least 4 different approaches (styles)
Each style represents a different strategy for innovating
Styles are the result of our preferences for different ways of thinking
Preferences, habits, talents, knowledge, values, interests, and ways of expressing ourselves define our innovation styles
OpenAdapted from Miller 2007, 2012
©Petroliam Nasional Berhad (PETRONAS) 2015 14
Two dimensions form the four Innovation Styles:1. What stimulates your innovative thinking?2. How do you approach the innovation process?
Visioning
Imagine an ideal future. Let long term goals be the guide.
Envision and idealize.
Modifying
Refine, improve and optimize what has already been done.
Exploring
Discover radical new and novel possibilities – they challenge and
discover.
Experimenting
Test combinations or ideas and learn from
the results.
OpenAdapted from Miller 2007, 2012
©Petroliam Nasional Berhad (PETRONAS) 2015 15
Two dimensions form the four Innovation Styles:1. What stimulates your innovative thinking?2. How do you approach the innovation process?
Modifying and Visioning
Focused, well-planned and outcome
orientated.
Visioning
Imagine an ideal future. Let long term goals be the guide.
Envision and idealize.
Visioning & exploring
Intuition, insights & images.
Modifying
Refine, improve and optimize what has already been done.
Exploring
Discover radical new and novel possibilities – they challenge and
discover.
Modifying & Experimenting
Facts, details & analysis.
Experimenting
Test combinations or ideas and learn from
the results.
Exploring & Experimenting
Broad, perceptive and learning orientated.
OpenAdapted from Miller 2007, 2012
©Petroliam Nasional Berhad (PETRONAS) 2015 16
To build innovation capabilities, give people experiences doing innovation
Open
5%
10%
20%
30%
50%
75%
90%
Lecture
Reading
Audio visual
Demonstration
Discussion group
Learning through doing
Teaching others
Adapted from E. Dale, Audiovisual Methods in Teaching, 1969, NY: Dryden Press.
What I hear, I forgetWhat I see, I remember
What I teach, I understand
Adapted from Confucius
©Petroliam Nasional Berhad (PETRONAS) 2015 17
Innovation readiness assessment underpins appropriately constructed change management programs for building innovation capabilities
Open
Alignment
Innovation mandate
Leader readiness
Employee engagement
Innovation support
Systematic approach
Insights
Diverse perspectives
External orientation
Culture / climate
Idea flow
Idea selection
Mobilization
Resources
Governance
Portfolio
Change management
Execution
Adapted from Desai (2013)
©Petroliam Nasional Berhad (PETRONAS) 2015 18
Innovation readiness assessments are a key diagnostic to be implemented before program launch
Factor Assessment Issues addressed
Alignment 1 Innovation Mandate Innovation is see as critical to the future of our organization.
2 Leader Readiness Leaders are prepared to guide the organization's innovation efforts.
3 Employee Engagement Individuals throughout the organization are motivated to contribute to innovation.
4 Innovation Support Our organizational systems and processes support innovation-relatedactivities.
5 Systematic Approach We apply a systematic approach to innovation.
Insights 6 Diverse Perspectives We incorporate a wide range of perspectives in generating and testingideas.
7 External Orientation We actively engage with the external environment (including customers and vendors).
8 Climate/Culture Our organizational climate and culture supports innovation.
9 Idea Flow We have a strong flow of creative ideas.
10 Idea Selection We select the best ideas from those that are generated.
Mobilization 11 Resources We allocate sufficient resources to innovation-related activities.
12 Governance We have effective governance structures and processes for innovation.
13 Portfolio We effectively manage our innovation-related projects.
14 Change Management We successfully manage any disruptive impact of innovation-related changes.
15 Execution We achieve effective results from the initiatives we execute
OpenDesai (2013) Innovation Engine
©Petroliam Nasional Berhad (PETRONAS) 2015 19
Enterprise wide innovation taps cultural and operational aspects of the business
Internal
Determines
their
ACTIONS….
Establishes their BELIEFS….
The EXPERIENCESwe give people….
Adapted from Connors & Smith 2011
Produces the
RESULTS
Culture
Operations
©Petroliam Nasional Berhad (PETRONAS) 2015 20
Innovationchallenges
Ideas ConceptsInnovationProjects
Idea GenerationIdea
EvaluationInnovation Portfolio
Management
Strategic Innovation
Areas
The Front End of Innovation
The Back End of Innovation
End-to-End Idea & Innovation Management
Innovation challenge campaigns are best practice innovation management processes
Open
Adapted from www.hypeinnovation.com
©Petroliam Nasional Berhad (PETRONAS) 2015 21
Specific actions are required to develop the leadership, culture and tools required for building an organizational culture for innovation
Open
Case for Change
Create a mandate for change, backed by a strategy that embrace the desired innovation strategy
Innovation readiness
Complete situational assessment. Model the necessary steps for the organization to become more innovative
LeadershipPromote the vision and communicatethroughout the organization
Experiences & beliefs
Enable the capabilities that give people the necessary experiences and promotes the required beliefs
©Petroliam Nasional Berhad (PETRONAS) 2015 22Internal
Thank you