Sustainable Organizations

31 March 2010 | Source: Chemical World
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Strategic Management thinking to make enterprises future-ready

Thanks to the rapid changes in industry and market trends, the employment market is full of opportunities for top talent to move up the corporate ladder. Increasingly, the customer too has a plethora of options to choose from. Given this backdrop, it requires an organization to be nimble and creative in how it strategically puts into play constantly evolving systems, processes, technological, product and organizational innovation that help it take on these challenges. Any organization that wants to remain competitive and sustainable cannot be complacent with being a “steady state” entity.

The world markets have opened up in the 21st century like never before. No single country's market is immune to risk exposure or fierce competition. A stable business environment or laid back leadership is a thing of the past. Today, organizations are forced to go through a paradigm shift in the way they lead their enterprises to stay on top of business developments and continue to grow successfully.

Not too long ago, a new, innovative product in the market meant years of successful profits before another one came along as an equal or superior alternative. Today, sustained success means constant innovation to keep pole position and continued growth to the bottom line. The sophisticated understanding and execution of product innovation are evident in the way premium brands have launched shampoo and personal care sachets and mini-tubes to woo less affluent market segments, creating new consumers for products that would otherwise have been an unthinkable luxury.

Innovation, therefore, is critical to building sustainable organizations that can flex to changing market trends and scenarios, stay abreast of the competitor landscape and be nimble and intelligent enough to accurately read future business and market opportunities. In this context, the concept of innovation includes both organizational and technological innovation to succeed in the future.

Strategic Innovations build Sustainable Organizations
Merely having smart ideas and several patents will not spell success for an organization or help it sustain itself in these changing times. It is the ability to link innovations to the organization's strategy and business that will create sustainable organizations. Institutionalizing strategic innovations is another step to foster an environment that will spread the culture of innovation within. Generation of ideas is only the beginning. Organizations should invest in and take risks in helping ideas that create value to see the light of day. Having a long-term vision, big-picture thinking, the ability to anticipate customer needs, changing lifestyles and market conditions, all feed into the innovation strategy that an organization should have. This will help it to be flexible, move ahead of the pack and create pathways of sustained success for itself.

Creating opportunities for making organizations sustainable can be attained through:

  • providing stretch assignments available to top talent to challenge them out of their zone of comfort
  • creating opportunities for mobility within the organization to work in different areas and help the cross-fertilization of expertise, best practices and ideas
  • establishing R&D centers and making viable research findings known and available to all divisions that can adopt new techniques, ideas, processes etc.
  • creating a framework to encourage and facilitate a flexible attitude within the organization that is open to change
  • raising the bar on the level of corporate citizenship achieved
  • making the leadership accountable for fostering change
  • enabling clear communication of the management’s intent to support creativity
  • improving sensitivity and response time to changes brought about by market conditions
  • creating a standard to measure sustainable initiatives by virtue of their impact on business, clients, organization and stakeholders
  • tying innovation to business needs, market opportunities and a culture of implementation
  • having clear guidelines, processes, etc to encourage innovation

Organizational Innovation – Successful Best Practices
It all starts with how an organization defines, nurtures, invests in, and promotes creative techniques, processes and practices within the enterprise, to provide opportunities for creative thinking. The caveat being that any such effort should, necessarily, focus on creating value. Organizations that understand that this is a constant and dynamic process tend to be more successful.

Here is another necessary condition – for organizational innovation to thrive, it needs to be embraced by all levels of people within the organization. The manner in which innovations are measured and rewarded cannot be based on just the number of ideas that come through suggestions from employees. Innovation, essentially, needs to create value to the growth of the enterprise, to the employees, customers and stakeholders; it is even better if it benefits the entire industry.

Dynamic organizations base their innovations on core values. Innovation is not an end in itself, but a continuous process within the organization. An example of how innovation failed on this aspect comes from the now-bankrupt Enron, whose innovative virtual room "eThink" won prestige and praise for promoting open communication. Such creativity seems to have also extended to its accounting practices, resulting in one of corporate America's biggest bankruptcies. For innovation to have long-term benefit, it needs to stand up to scrutiny against the core values of the organization.

Often, a management mandate to "think out of the box" is erroneously thought to bring about a culture of innovation. This will only lead to a clutter of ideas that take away too much time to sift through and evaluate each one of them. What firms really need are dynamic leaders with vision, creativity, passion and the ability to take calculated risks in radical ideas. This is what will result in people within the organization taking that "leap of faith", being as passionate and creative about various processes, practices, products and services that create value for all stakeholders. Some successful best practices in modern-day corporations are listed below.

– The Aditya Birla Group in India provides a great example of the innovative people, processes and practices it has applied to retain some of its top talent. This out-of-the-box thinking has made it successful in retaining its high potential talent by providing them global career opportunities as well as avenues for lateral movement within the organization. It has been successful in providing geographic and functional mobility. This has resulted in retaining top talent and employees buying in to the fact that successful careers do not always need to necessarily have a vertical path, but can also be more of a zig-zag curve. This has helped it to provide broad areas of exposure and keep the learning curve steep by pulling people out of their comfort zones. As a result, it is not only able to leverage synergies brought in by people with diverse backgrounds and experiences, but also to empower them to question the status quo and keep it constantly evolving organically. This has led to the Aditya Birla Group winning the industry award for Best Employer of 2007. This is certainly a new concept in the country where everyone wants vertical growth in quick progression.

– Bangalore-based Infosys ensures its top management is actively involved in innovation through its "Voice of Youth" program in which it invites 9 star performers, below 30 years of age, to participate in senior management meetings and councils and voice their thoughts and ideas. The thinking behind this initiative is that new ideas from junior staff need to get heard by the senior-most rung. 

– Procter and Gamble, on the other hand, has completely overhauled its R&D strategy through a Connect+Develop™ method which encourages its Technology Entrepreneurs (TEs) to scout for innovative products from a global network of partners, suppliers, markets, inventors and scientists, to create value for the organization and its customers globally. The company leverages this seemingly ‘without borders’ partnership to its benefit quite successfully by bringing a diverse and creative sourcing strategy for being successful in the market place.

There are many such examples of strategic and innovative strategies that have caught the imagination of clients, customers, employees and shareholders, and also succeeded in making organizations sustainable. 

Technological Innovation – successful best practices
Today, technological innovation needs to go hand in hand with organizational innovation for sustained success. Technological innovations in the recent past have demonstrated the ability to have an organization-wide impact, while still others have resulted in a complete change in lifestyle across continents.

– Nokia, the mobile manufacturing major has constantly retained its position as a market leader through its many technological innovations. In India, Nepal and China, it has made enormous efforts to understand the market demographic and has come out with iconic touch screen phones to help the millions of literacy-challenged customers to stay connected. This has resulted in its ability to penetrate interior markets in these developing countries. By realizing the special needs and incorporating other technological innovations, and by having moisture-resistant screens and regional-language interface for its Asian users, Nokia has become a sustainable organization in its operations in the region. This is a telling example of technological innovation that has resulted in a lifestyle change for people on a massive scale.

– Another example of technological innovation that has an industry-wide impact is the new product from SpamJadoo. Technological innovation includes design, form and value. SpamJadoo is an Indian IT products development company that has innovatively designed spam eradication software that saves companies and users’ time and money in filtering out unwanted spam. The product has been designed to be self-learning and self-maintaining in nature and eliminates spam at the protocol level. This is an industry first and is receiving rave reviews across a wide geography very quickly.

Within an organization too, technological innovations that help organizations retain their sustainability are those that are not restricted to a particular division or process, but enable the benefits to spill over enterprise-wide. Technological innovations should aid organizations to increase productivity, improve quality, streamline processes, bring about quality improvement, increase customer base, free up time and make an organization more profitable. Sharing the benefits of technological innovation helps share knowledge base and has a ripple effect on the enterprise.

– Hero Honda Motors has adopted the Supplier Relationship Management technology from SAP in a manner that has helped it to gain a competitive edge over other players through Just-in-Time (JIT) inventories and effective supply chain management. The effort involved in getting the buy-in and adoption within the whole organization has had a positive impact on the business and has made Hero Honda an Intelligent organization today.

– The Surat Milk Producers' Union Limited (SUMUL) successfully leverages technological innovation through adopting the Online Integrated Computerized System (OICS) that enabled it automate all its processes from procurement of milk, materials and cattle feed management, and financial accounting to human resources so that it resulted in reduced costs, time and improved quality and profits. 

We see business and technological innovations in many fields and industries such as health care, insurance, banking and finance, entertainment, retail and manufacturing.  Operating in interesting times, where the only constant is changing market trends, means that firms have to employ equally interesting strategies to success. Organizational and technological innovations can be an ideal roadmap to help organizations stay ahead of the game and be better prepared to address business needs and market environments.

CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.
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