In this segment, we're going to look at the, the top-down approach to
management innovation, to changing your management model.
And this is where the Chief Executive takes the initiative to really do
something very decisive about shaking things up.
Not just in terms of the products or
services they sell but, in terms of how they work.
I'll give you a couple of examples and then I'll just talk briefly about
a third and fourth case just to make sure we get a sense of the kind of the,
the full kind of spectrum of, of all opportunities here.
The first case is a company we talked about briefly, earlier in the course.
A Danish company called Oticon which makes hearing aides.
Back in 1990, Lars Kolind,
the Chief Executive, decided the company needed shaking up.
They were facing fierce competitors in companies like Siemens and Phillips.
The technology for hearing aides was changing.
And he decided that the company had to do something radical in order to
survive because they were just a mid-sized player.
I won't go through the story in great detail because there is a case study on
the course room for you to read it in a bit more detail.
Well, let me just highlight a few of the key points.
He first of all shook people up.
He wrote a, a very famous memo saying think the unthinkable.
Try to imagine an organization based on a radically different set of principles.
He gave that organization a name, called it the Spaghetti Organisation.
And what he meant by that was that rather than a traditional organization chart,
projects would be like strands of spaghetti.
Whereby, through the hundreds of them, ongoing at
the same time with a new organization, the same individual might find him or
herself working on three or four different projects at the same time.
These projects will be bottom-up projects rather than waiting for
somebody at the top to tell them what to do.
People would just take the initiative to create their projects and
getting funding accordingly.
He also put in place some very visible a sort of symbols of change.
He created an enormous plastic chute in the middle of the building and
he decided to shred all the paper in the organization to move to what he
called a paperless office.
So the paper was shredded and the shredded paper went down the chute so
everyone could see that was happening.
Then of course that made people start to take things very seriously.
It was a very successful change.
Subsequently as I said in an earlier segment,
the company actually revert it back to a certainly more traditional form.
But that in no way discredits the value of what he did, and
of course the point here is that he did it in a very sort of revolutionary way.
He didn't do it by stealth.
He went out with a big bang.
So that's Lars Kolind at Oticon.
The second example I'm just going to talk briefly around is is a little bit
different Proctor & Gamble, P&G everyone's heard of P&G.
The biggest company making F, FMCG,
Fast Moving Consumer Goods products in the world.
This was a particular initiative by AG Lafley the former Chief Executive,
particularly around innovation in the company.
Now P&G is a company of course who are a very mature industry.
It's very difficult to be innovative when you're selling detergents and
various consumer products.
So he went out and said look in order for
us to become more innovative we have to tap into the, you know,
the wisdom of the, of, of the crowds, the people outside Proctor & Gamble.
So one of the big kind of themes on this course has been
this notion of tapping into the views of the masses.
So, he launched an open innovation, inovish, initiative, and
he called it Connect and Develop.
What, why did he use the term Connect and Develop?
He said, look, research and development's all very well.
Where we do the research when we develop the products.
But what we should be doing in addition to that is we should be connecting to
the outside world and using that as the kind of, the, the turbocharger,
if you like, for the subsequent development efforts of the organization.
So, it's to compliment rather than replace internal innovation.
And he assigned one of his,
his key lieutenant, a guy called Larry Huston, to run this program.
I won't go through the details of it.
It involved partnership with a lot of external suppliers.
It involved creating a network of what he called technology entrepreneurs,
individuals who were going around the world scouting for new product and
service ideas.
And it involved also links to various external innovation websites out there.
Innocentive is an organization that I've mentioned earlier in the course,
that allows problems to be solved on a platform.
They went out to an organization called Yourencore.com, which is basically for
retired scientists,
retired professionals, to give them an opportunity to give back to the community.
Lots and
lots of different me, me, methods, networks to try to tap into views.
And the objective was to essentially get 50% of innovations coming,
at least in part, from external sources over the course of this initiative.
The project, the program has been a great success.
The company is still doing very well.
It's had a few little glitches along the way, but
today P&G is still a very successful company.
The rest of P&G, let me be clear, has not dramatically been transformed.
The story I'm telling you here is specifically about
P&G's innovation activities, and how they desired to,
to do something very, very different in terms of how they sourced innovation.
Julian BirkinshawProfessor of Strategy & Entrepreneurship
