pratt & whitney rocketdyne's thinking together about systemspratt & whitney...

Pratt & Whitney Rocketdyne's InThinking Network

Thinking Together About Systems

Presented by Paul Hollingworth

[email protected]

March 18, 2016

Webinar Host

Bill Bellows, [email protected]

for

Aerojet Rocketdyne’s

InThinking Network

mailto:[email protected]


Thinking Together About Systems

Systems That Foster Innovation

with Paul Hollingworth

Brain artwork © Dave Hollingworth 2016

Overview• Definitions

• The case for innovation

• The role of organisational culture

• Research into organisational innovative capability

• Systems that foster innovation - leadership responsibilities

• Conclusions

• Questions?

Definitions

• Creativity - the invention of novel and useful products, services and processes

• Innovation - the adoption and implementation of new products services and processes

CreativityInnovation

divergent right-brained (Dionysian)

convergent left-brained (Apollonian)

Brain artwork © Dave Hollingworth 2016

absent fulfilled

delighted

neutral

unhappy

Kano Customer Perception Model

Improvement

Innovation

Requirements for Successful Business

INNOVATIONof products & services

INNOVATIONof processes

IMPROVEMENT of products & services

IMPROVEMENT of processes

LEADERSHIP creating the environment for improvement & innovation

Deming’s ‘Four Prongs’

"Innovation is the central issue in economic prosperity.” Michael E. Porter

“There was not much technology involved in moving a lorry body off its wheels and putting it on a ship. But containerisation roughly quadrupled the productivity of the ocean-going freighter and made possible the colossal expansion of world trade” Peter Drucker

MaximiselongTermreturnoninvestment

LongtermInvestment

INPUT OUTPUT

SUPPLIERS PRODUCTION CUSTOMERS

Value flow

Money flow

The Goal - Maximising Long Term Return on Investment

MaximiseSalesrevenue


Minimiseoperatingcosts

But these are EFFECTS,not causes.

Everybody understands this:




LongtermInvestment

INPUT OUTPUT

1st level causes

Delightcustomers

THESE ACTIVITIES ADD VALUE

THESE ACTIVITIES REDUCE WASTE

Causal Relationships

Givecustomersmorechoice

Removebarriersthatstopemployeeengagement

ImprovementOfprocess

InnovationofProduct/service

Meetqualitycriteria

Identifying&Resolvingproblems

Createpredictableoutput

Reducedelays

ManufactureProductstoTargetdesignspecifications

DeliverProductsOntime&infull

MeetcustomersExpectedleadtime

ReducewasteIndirectlabour

ReducewasteInindirectlabour

CreateCulturethatEnablesallOftheseactivities

Minimisefacilitiescost

Minimiseinventorycost

CapitalInvestment

Investmentintrainingandpersonal development

Investmentinresearch

Investmentinrelationshipdevelopment

Thislinkstosupplychain

Removebarriersthatstopemployeeengagement

Identifying&Resolvingproblems

Reducedelays

ManufactureProductstoTargetdesignspecifications

Delightcustomers




CapitalInvestment

Investmentintrainingandpersonal development

Investmentinfacilities

MinimiseEnvironmental impact

Minimise useofenergy&materials

“Culture Eats Strategy for Breakfast”

• How to create a culture that encourages employee engagement and fosters innovation?

• Can Dionysian & Appolonian co-exist?

• What should leaders do, or do more of?

• What should they avoid doing, or do less of?

Research - Three Phases

A. In depth research in a successful UK manufacturer with a proven track record of product and service innovation.

B. Review of published literature on innovation and organisational design.

C. Contrast and combine A & B

I started by asking the employees…

What should leaders do more of?

1. Improve communication, coordination and cooperation between departments

2. Encourage more employee involvement in generating ideas / problem solving

3. Raise skill levels (more investment in training and development)

“Learning is a source of innovation” Deming

What should leaders avoid doing?

1. Becoming complacent / standing still 2. Creating a blame culture (e.g. between departments) 3. Restricting employee development

Middle Management were Surveyed

1. Effective business leadership (vision and strategy) 2. Understands their market (invests in research) 3. Invests in their people (training and development) 4. Culture which embraces change 5. Forward thinking / proactive culture 6. Customer focused culture 7. Defined and effective processes for product and service

development 8. Invests capital in new technology 9. Strong brand (market leadership) 10. Willingness to accept mistakes

KJ Diagram used with Senior Team

How to enhance our innovative capability:

•Develop a customer-focused strategy for innovation driven by genuine market research.

•Develop a clear vision of our strategy for innovation. •Management of development projects to have clear

prioritisation, feasibility and timescales. •Better deployment of existing resources to encourage

innovation. •Effective teamwork through good communication. • Improvement of current processes to enable innovation.

Phase A - Their conclusion:

In order to enhance organisational innovative capability it is

necessary to have in place a customer focused innovation

strategy that enables deployment of a prioritised development

plan for delivering new products, services and processes,

utilising research, creativity and technology.

Phase B - What did the literature say?21 papers were evaluated against 13 key concepts

1. Innovative role-modelling. Being an example of innovative behaviour, exploring opportunities, generating ideas, championing and putting efforts in development.

2. Intellectual stimulation. Teasing subordinates directly to come up with ideas and to evaluate current practices

3. Stimulating knowledge diffusion. Stimulating open and transparent communication, introducing supportive communication structures like informal work meetings.

4. Providing vision. Communicating an explicit vision on the role and preferred types of innovation, providing directions for future activities.

5. Consulting. Checking with people before initiating changes that may affect them, incorporating their ideas and suggestions in decisions.

6. Delegating. Giving subordinates sufficient autonomy to determine relatively independently how to do a job.

Phase B - What did the literature say?21 papers were evaluated against 13 key concepts

7. Support for innovation. Acting friendly to innovative employees, being patient and helpful, listening, looking out for someone’s interests if problems arise

8. Organizing feedback. Ensuring feedback on concepts and first trials, providing feedback to employees, asking customers for their opinion.

9. Recognition. Showing appreciation for innovative performances.

10. Rewards. Providing financial/material rewards for innovative performances.

11. Providing resources. Providing time and money to implement ideas.

12. Monitoring. Ensuring effectiveness and efficiency, checking-up on people, stressing tried and tested routines (negative relationship)

13. Task assignment. Providing employees with challenging tasks, make allowance for employees’ commitment when assigning tasks

Frequency of Occurrence in Literature

Phase C - Compare A&B

What Role Should ‘Rewards’ Have?

“Unmotivated employees are likely to expend little effort in their jobs…and produce low quality work. On the other hand, employees who feel motivated toward their work are likely to be persistent, creative and productive turning out high quality work that they willingly undertake”.

Teresa Amabile

What sort of motivation do rewards create?

Intrinsic v Extrinsic

• Cognitive flexibility and complexity are highest under strong intrinsic motivation

• Straightforward tasks requiring little intellectual effort may be fostered by extrinsic motivation.

• Even a high degree of intrinsic motivation can be eroded over time by a work environment that is unsupportive of intrinsic involvement in the work and that places heavy emphasis on extrinsic motivators. (Deming described these as ‘forces of destruction’)

Systems that Foster InnovationOrganisational culture and leadership style are major determinants of innovative capability. Four important sets of responsibilities of leadership:

1. Principle Responsibilities

2. Strategic Responsibilities

3. Behavioural Responsibilities

4. Resource Responsibilities

1. Principle Responsibilities of Leadership

• A customer-centric strategic vision

• Resources and support for creativity and innovation

• Enable collaboration and knowledge sharing

• Leadership by example; creative leadership

2. Strategic Responsibilities

• Understanding the organisation as an open system, capable of adaptation and learning.

• Understanding their market, and how to solve problems for their customers.

• Developing a deployable plan, supported by defined methods for evaluating ideas (creativity) and taking them through the development process to delivery (innovation).

3. Behavioural Responsibilities• Creative leaders understand that the behaviour of their people is greatly

influenced by the systems they work in. It is the responsibility of leadership to work on that system, to improve its innovative capability.

• Authentic demonstration of values and principles that provide guidance as to the way that the strategic objectives should be pursued (lead by example).

• Reinforcing values such as learning and cooperation and avoiding blame and internal competition, leaders may break down the barriers that encourage localised thinking and sub-optimisation.

• People should not fear criticism or punishment for failure, since this discourages initiative and crushes intrinsic motivation. In success or failure, the emphasis should be on learning and sharing.

• Recognition is an important factor, provided it is appropriately directed and without over justification.

4. Resource Responsibilities• Provide sufficient time, materials and other resources to support

creativity and innovation.

• Capital investment may be required, the decision for which may not be reducible to cost-benefit analysis.

• Other resources to consider include training and personal development, both in the technical subject matter and in tools and techniques to enhance creativity and problem solving.

• It is a responsibility of leadership to put in place systems for knowledge management, project management and communication, which enable and support cross-functional cooperation and employee engagement.

• An over-abundance of any of the above may be counter-productive. However, access to technology and other resources must not be arbitrarily restricted.

Summary Part 1• The principles developed in this study call for alignment with a

strategic vision which will enable autonomy and empowerment; to engage intrinsic motivation, in an atmosphere free of blame and fear; and so engage employees in the pursuit of customer-centric adaptive problem solving.

• Enlightened leaders, guided by these principles, may develop a collaborative culture where the Dionysian and Apollonian drives may coexist, enabling creativity and enhancing innovation.

• Any enterprise trapped in the prison of reductionist thinking is unlikely to nurture creativity or realise successful innovation.

• Organisations whose leaders are still rooted in command and control thinking, dependent on extrinsic motivators, driven by fear and financial targets, will not be compatible with this way of working. They are locked into a race to imitate the innovators. In all probability, natural selection will eventually deal with them.

Summary Part 2: The Achilles Heel• Not all decisions are reducible to cost-benefit

analysis. Since every decision is a prediction it carries with it the risk of being wrong. Therefore, applying the principles articulated by this study will sometimes call for value judgements, or what is best described as ‘an act of faith’.

• How leaders deal with uncertainty and ambiguity, their emotional attitude towards risk, is therefore central to unlocking innovative capability.

Questions?

Feedback:

• [email protected]

• uk.linkedin.com/in/paulhollingworth


http://uk.linkedin.com/in/paulhollingworth

pratt & whitney rocketdyne's thinking together about systemspratt & whitney...

Documents