Design An Appropriate Business Process Essay Example

their presence in the market, increase profitability, and establish credibility. Schumacher (1950), who is often considered the pioneer of innovation studies, explained that entrepreneurs strive to create innovative ideas in order to gain a strategic advantage. While they may initially experience monopolistic profits, eventually their innovative concepts will be imitated, resulting in a repetitive cycle.

The author defines 'creative destruction' as the process where new innovations cause the demise of old rules and the establishment of new ones. It is crucial to understand that innovation is not a one-time event but an ongoing process comprising individual projects. The three main types of innovation can be categorized as follows: I. Technical revolution, which entails introducing a completely novel product (known as new-to-the-world). This form of innovation is relatively uncommon, making up only 6-10% of all projects according to Title (1999).

According to Lifer et al(2000) iii, radical innovation refers to a significant new development that brings about a drastic change in products, processes, or services, leading to the transformation of existing markets or the creation of new ones. On the other hand, incremental innovation involves making improvements to individual products. Research on incremental development, such as Hollander's famous study of DuPont rayon plants, suggests that cumulative gains over time can often be greater than those that result from occasional radical ideas.

Continuous improvement methods like 'lean' thinking and six sigma have gained popularity for their effectiveness in improving business efficiency and promoting growth. However, they differ significantly from the approaches that foster radical innovation. Many models describe the innovation process using a funnel analogy when examining how innovation occurs and the factors that facilitate it. Tied

; Peasant (2009) present a straightforward funnel process, beginning with the initial search stage that can involve dedicated research and development teams or a spontaneous 'eureka moment'.

Innovation comprises multiple stages, beginning with the selection stage. During this phase, strategic choices are made, taking into account marketability, profitability, and costs. The subsequent stage is implementation, which involves transforming ideas into tangible outcomes while effectively managing resources and considering risk factors. Consequently, any organization can foster innovation by perceiving it as a systematic process. Nevertheless, for innovation to occur, organizations must evaluate their current position regarding existing innovative endeavors and ascertain their potential for advancement while addressing anticipated challenges.

Francis and Peasant (2005) introduced a model called 'Four Dimensions of Innovation Space' which assists organizations in understanding their current position and potential future directions. One of the dimensions in this model is Process Innovation, which involves making changes to how things are created or delivered.

• Position Innovation - changes in the context in which products are introduced
• Paradigm innovation - changes in the underlying mental models which frame what an organization does.
• Using this model, Alonzo can examine its current strengths and weaknesses and determine where it wants to be.

The Four Dimensions model can help Alonzo assess its strengths and weaknesses. It allows Alonzo to analyze its competitors and identify any gaps that it can fill. Additionally, it helps Alonzo understand where its competitors are focusing their efforts. According to the model, Alonzo excels at incremental product innovation and incremental process innovation. It has a strong customer orientation and works closely with its customers, which has

contributed to its profitability. However, Alonzo lacks radical innovation in all areas and has low paradigm and position innovation in both incremental and radical innovation.

Although this model provides a general overview of the innovation space, further analysis is necessary for Alonzo to understand the specific qualities of innovation that will influence strategic decisions regarding the development of its capabilities. Some of these qualities include the level of novelty desired, whether it be incremental or radical. Additionally, consideration should be given to the platforms or groups of innovations Alonzo may want to utilize, building upon existing advancements. Lastly, the readiness for "discontinuous innovation ideas" should be examined, as these new innovations have the power to redefine established norms.

The business must be willing to accept a 5 - 10 year plan to work in the radical innovation sphere, as seen with Alonzo currently focusing on incremental product and process innovation. A strength is their ability to customize offerings to meet customer needs. While they want to pursue radical innovation, it is crucial to continue successful customer-focused incremental innovation.

According to Chris Watson, MD at PC's advisory practice focusing on innovation, organizations can have both healthy incremental and radical innovation lines. However, Watson explains that the existing capital budgeting and assessment systems of organizations are effective for incremental innovation but not for radical innovation. Therefore, a new structure is needed to facilitate radical innovation. This is an important aspect that Alonzo will need to address - maintaining successful incremental innovation activities while establishing a new structure for radical innovation.

To further enhance its incremental innovation offerings, Alonzo could explore the concept of 'platform innovation'. Platforms enable

the harnessing of incremental innovation by building upon a core component. This is exemplified by Apple, where the basic component of an I-pod evolved into a phone, a tablet computer, and various other variations. Platform innovation will enable Alonzo to leverage the initial customer-focused innovations that have contributed to their success, and further develop them to meet broader customer needs.

By listening to their customers, Alonzo can continue succeeding in their current space and explore further opportunities with low risk. However, a significant weakness for Alonzo is their heavy dependence on the same group of customers for driving innovation. This over reliance on a small customer base poses high risks.

The 'innovation life cycle' model, created by Abernathy and Turtlebacks (1975), illustrates the challenges that organizations like Alonzo encounter when they enter a phase where innovation is driven by customer demand. According to this model, transitioning to a new trajectory becomes challenging for these organizations due to existing costs, technology investments, and barriers at both organizational and psychological levels. Furthermore, there is a possibility of business relocation or decline in the industry they operate in for one or more of these organizations.

The limited ideas Alonzo is receiving from its sources and the emergence of new technologies and changes in customer philosophy are all causes of discontinuity. These changes may lead to the obsolescence of their processes or products and can be driven by new strategies, regulations, or political issues. To mitigate this risk, Alonzo needs to expand its customer base and focus on developing incremental innovations independently of its customers. Additionally, it should consider entering the realm of radical innovation.

Research indicates that while

some existing incumbents struggle with radical innovation, not all do. Companies have the potential to create new paths and utilize their knowledge and abilities to foster new innovations. Alonzo executives acknowledge the need for change and the development of radical innovation capabilities. However, it is important to recognize that simply desiring innovation is distinct from actual implementation. Innovation is a crucial element within a broader system, and any changes made can affect the organization's culture and overall outcomes.

To commence, Alonzo needs to establish a distinct innovation strategy. The image provided by Tied and Peasant depicts the inquiries that must be answered in order to advance an innovative business. This process initiates with identifying indications that indicate the necessity or desire for change. It is crucial to be receptive to these signals. Following that, the projects must be selected while considering the balance between risk and reward. The third stage involves the execution of turning ideas into actuality.

The radical innovation necessitates extensive experimentation and rapid learning as there is no predetermined "right way." Eventually, various ideas will converge to form a dominant design, referred to as a technological trajectory by Doss (1982). This dominant design attracts more attention and resources, leading to the stabilization of its characteristics. Subsequently, the focus shifts towards differentiation, aiming to consistently deliver the product or service at a low cost while maintaining high quality. Finally, the ultimate objective is to derive benefits from the innovation.

Lifer et al (2000) present a linear approach to fostering innovation by addressing the obstacles that must be overcome to establish a radical innovation organization. Initially, it is crucial to capture revolutionary concepts in what

they refer to as the 'fuzzy front end' (resembling the Tied ; Peasants 'search' phase). The second hurdle revolves around possessing the necessary expertise to manage radical innovation projects. In order to accomplish this, the company must be capable of assessing capabilities, recruiting advocates, and formulating and adhering to learning plans.

To ensure innovation at Alonzo, it is important for the company to engage in extensive market research and learn about the markets it operates in. Lifer et al suggest that resolving uncertainty in the business model is crucial, while keeping focus on the core plan and bridging any resource or competency gaps without disrupting normal business operations. Additionally, obtaining the support of senior management and gaining their 'buy-in' is crucial in overcoming these challenges. Overcoming these hurdles is essential for driving innovation within the company.

According to Van De Even, the underlying structure can be characterized as an innovation journey. He examined the constraints of the linear model and identified key factors that modify the basic models. These factors include the idea that innovation is often sparked by shock, meaning that negative events can actually lead to positive changes. Additionally, restructuring is a consistent occurrence and is likely to happen during innovation activities. However, this does not imply that innovation should not be disrupted. Van De Even emphasized the significance of senior management support and how they should anticipate setbacks.

The text highlights the significance of understanding the evolution of success and advises everyone involved to keep this in mind. Tied, Peasant, Lifer, and Van De Even's research demonstrates that senior management must be prepared to face significant challenges when introducing a groundbreaking

innovation line into their company, in addition to developing an innovation strategy. Alonzo also needs to determine who will lead this project. Currently, the organizational structure is centered on customer-focused business units, which does not support innovation.

Establishing new project teams is crucial for advancing their plans. Clark and Wheelwright (1992) identify various types of development teams that can be employed. For Alonzo, my suggestion is to utilize an autonomous team structure. In this format, the team consists of cross-functional specialists led by a project leader (preferably from a senior position - a weights) who has complete authority over the resources. The team will have a fresh start to conceive new innovations and have the ability to fully concentrate on the task at hand, after which members can either revert to their previous role or seek advancement opportunities.

The team must consist of individuals from different Business Units in order to strengthen synergies between them, which is a goal of Loan's. It is important for the team to have a fixed period of time to prevent them from becoming out-of-touch. Alonzo has emphasized that they do not want permanent, internal corporate research units. To ensure the quality and motivation of this team, reward and remuneration strategies need to be developed.

When implementing this stage, it is important to handle it with caution. A comprehensive communications plan should be created to explain why the organization wants to pursue radical innovation. One way to demonstrate the expected competitive advantage is to use Porter's '5 Forces model'. The plan should also outline the strategy and the role of the new autonomous development teams. It is crucial to emphasize

the benefits that both the organization and its staff will gain from this initiative. The communication efforts should utilize a variety of tools that are positive, reassuring, and designed to generate excitement throughout the entire business.

To develop its radical innovation capacity, Alonzo needs to engage in 'open innovation' by seeking external ideas. According to Cheeseburger (2007), organizations cannot solely rely on internally generated ideas and must establish connections with external partners for growth. Alonzo should collaborate with academic institutions and encourage senior team members to engage in broader business networking. This will allow the incorporation of external ideas into the business and provide support to the institution for further development.

Currently, Alonzo lacks a culture of information sharing. To encourage Business Unit Leaders to not only improve these connections but also disseminate knowledge to autonomous project teams who can develop and implement ideas, reward strategies must be established. The autonomous project team will handle multiple initiatives concurrently while simultaneous incremental innovations occur at the customer level.

To prevent the team from becoming overwhelmed, the project leader must make tools available. One useful tool is scenario planning, which involves selecting and developing scenarios and examining their implications. This helps the team identify areas to focus on and determines where additional research is needed. However, this activity may result in an increase in initiatives. In such cases, the project leader must effectively manage the portfolio of initiatives.

By utilizing a straightforward risk and reward chart, it becomes possible to classify each initiative as high or low in terms of risks and benefits. Consequently, the leader, in collaboration with senior management, can assess which initiatives to

prioritize. The objective is to establish measures that safeguard Alonzo from unnecessary risk or the pursuit of undesirable initiatives. To achieve this, every project should be assigned an Executive sponsor who will assume responsibility for the project. Coopers 'Stage - Gate' idea-to-launch system (see Fig 2) could serve as a valuable tool for tracking the progress of the initiative.

The advantages of using a step-by-step process with clear tasks and methods have been extensively recorded in companies like MM, ITT, and Procter and Gamble (P). The Stage-Gate approach, in its most basic form, comprises several stages that assist in implementing innovation initiatives. Each stage provides particular suggestions for progressing to the next stage or gate, with well-defined objectives and purpose. Crucially, each stage involves various departments such as R and marketing, making it a cross-functional procedure.

The team brings clear deliverables to the meeting for each gate, which are determined as the output. These deliverables are judged against core criteria to determine if the initiative should continue. Finally, a decision is made to Go/Kill/Hold/Recycle with an action plan for the next stage. By using this model, Alonzo can effectively manage its innovation initiatives in a timely manner. Once embedded in Alonzo, this process can also be utilized for its 'open innovation' activities.

According to Cooper and Gadget (2007), certain progressive organizations are already utilizing this approach. During the 'discover' stage, Alonzo has the opportunity to seek ideas from inventors, start-ups, small firms, and other conventional external sources. In the 'development' stage, Alonzo may involve external scientists or employ external intellectual property that is no longer under license to advance an idea. Upon reaching the launch

phase, they can choose to sell or out-license products with potential value in other areas, or they can integrate them into their business for immediate growth.

Both situations can benefit from implementing an effective Stage-Gate system, which facilitates the efficient and profitable entry of new ideas into the market. The process of embedding this system is relatively simple and can be achieved through the use of interactive workshops that aid in developing a comprehensive understanding. In this article, I have provided an overview of innovation, its importance, and explored a few enabling factors, including the need for a clear process and strategy, an appropriate organizational structure, support from senior management, and awareness of obstacles and challenges. During this discussion, I also briefly mentioned the strengths and weaknesses of Alonzo.

In the previous discussion, I proposed that Alonzo can enhance its innovative capacity through the utilization of 'platforms', establishing autonomous project teams, and implementing 'open innovation'. In addition, I assessed a number of tools that can assist in this process, including the Stage-Gate process, scenarios, and risk and reward charts. It should be acknowledged that there are various methods and tools available to foster innovation within an organization. While I have focused on a limited selection of activities to support Alonzo's current and future innovation endeavors and improve their innovation management processes, it is important to recognize that there are other options as well.