Creating a culture of innovation in the Plastics Industry Paper Petronas.pdf · ©Petroliam...

©Petroliam Nasional Berhad (PETRONAS) 2015 1

© 2015 PETROLIAM NASIONAL BERHAD (PETRONAS)

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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


Outline

Defining why culture important

Identifying your innovation strategy

Assessing your innovation readiness

Designing innovation program setup


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


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


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


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


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


Innovation strategy is a key environmental factor determining innovation culture

Internal

Technologydriver

Market reader

Need seeker

UOPSiemens AG

AppleXerox

Proctor & GambleDell

Adapted from Strategy&


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&


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&


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


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


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


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.



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.



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


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)


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


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


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


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

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