Samsung Case Study
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Samsung Case Study
Dr. Abduljalil Abdulshaheed Hasan Al-Badri
Tuesday, August 22, 2017
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Table of Contents
Table of Contents ......................................................................................................................... 2
Abstract ........................................................................................................................................ 3
Introduction ................................................................................................................................. 4
Innovation and Change in the Organization ............................................................................. 5
SWOT Analysis ............................................................................................................................ 7
Strengths....................................................................................................................................... 8
Weaknesses................................................................................................................................... 8
Opportunities ............................................................................................................................... 9
Threats........................................................................................................................................ 10
System for Case Study ............................................................................................................... 10
Application of the System ......................................................................................................... 11
Challenges and Their Solutions ................................................................................................ 12
Role of Ethics and Responsibilities ........................................................................................... 14
Principles and Practices for Implementing Innovation Change ............................................ 15
Application of Innovative Processes and Theories to Individuals and Organizations ......... 16
Literature Review ...................................................................................................................... 18
Core Aspects of leadership ........................................................................................................ 20
Principles and Practices for Implementing Innovation .......................................................... 21
Effects off Leadership Ethics .................................................................................................... 22
Research Summary.................................................................................................................... 25
Interpretation ............................................................................................................................. 27
Conclusion .................................................................................................................................. 28
References .................................................................................................................................. 30
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Abstract
Often, the bases of competitive advantage are used as measuring tools to separate one
enterprise from another. These measuring tools will be sustainable and sold over time, if they
are used through the development process and use a flexible implementation of creative ideas.
Innovation is described as the continuous improvement process at any organization. That
process will push the significant substantial change within the organization’s employees and staff
to move through the implementation entirely or through incremental changes.
Because human nature normally tends to resist and act against change, there is a need for
leaders to effectively facilitate that change, which produces change either due to the continuous
innovation process or from the process. This study will cover the requirements of innovative
leadership in relation to the goal of increasing the sustainability of Samsung products to different
parts of the electronic manufacturing process. The SWOT analysis of the elements involved in
the innovation and change shows that Samsung will pursue its goal of sustainability by 100% in
the year 2020. Additional analysis will be carried out in regard to the challenges of innovation,
and it will also highlight the organization’s approach to overcome them.
Good attention was applied to the business’ ethics and how it works within the organization
and process of innovation. While it looks to the type of leadership necessary to be successful, it
will also look for better characteristics implementation within these groups in regard to the moral
value of the innovation process.
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Introduction
Historically, Samsung began business as a small exporter located at Taegu, Korea. The
rapid growth has propelled it to become one of the world’s leading electronics companies.
Samsung specialized in household digital appliances, media, semiconductors, memory, and
system integration (Samsung's history, 2011). Upon its 40th anniversary, the company adopted a
new vision of “Inspire the World, Create the Future” in 2009. Going forward, it will inspire the
world through new technologies, providing the market with new innovative products, and will be
ready to establish creative solutions while creating a prosperous future by enhancing stakeholder
value.
Joining global efforts to address climate change and conserve energy, Samsung
Electronics expanded into the solar cell and module business. Samsung aims to deliver highlyefficient, industry-leading, solar products, and it will harness cutting-edge technologies for LCD
and semiconductor manufacturing to build a competitive solar business. Samsung Electronics is
developing premium products boasting high efficiency and quality to capitalize on the solar
market which is growing at a fast rate of over 20% per annum (Anonymous. 2011).
“Today Samsung's innovative are providing top-quality products and processes are the
world-recognized, that shows the major milestones of Samsung, and give an excellent indication
about the company, and it’s expanded their products” (Karen J. F., & Kyung-won, Chung.
2005). Moreover, its revenue has grown along with their market share, too. All of that was
accomplished due to the management which had followed the company mission, to provide
products in order to keep consumers living a better life all around the world (Anonymous, 2011).
Samsung Electronics set up a new external request handling system to facilitate communication
with stakeholders. Throughout its history, Samsung Electronics has constantly sought to be a
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responsible company and to stress the sustainability aspect of all their dealings with suppliers,
neighbors, and customers around the world.
Innovation and Change in the Organization
Chuck Williams (2001) cites a number of creative components of the truly innovative
organization. Foremost among these components is encouragement from a variety of sources,
including the organization itself, supervisors, and workgroups. Employees are presented with
challenging work and are given the freedom to perform within those areas where innovative
thinking is encouraged. Lastly, these organizations continually strive to remove all impediments
to innovation and improvement.
These are also characteristics of learning organizations, which are often compared to
living organisms. Just as a living organism learns as it grows and adapts to its environment so a
truly adaptive organization learns and adapts as it progresses through a process of continual
improvement. For such an organization to be successful and sustainable, it must be able to
continue its growth, learning, and adaptation throughout its life and in a variety of
circumstances. Its managers must be able to maintain the status quo of its core competencies,
while strong transformational leaders focus on the empowerment of their followers, as they lead
them through the necessary change and adaptation.
What separates managers from leaders is their reaction to change and how they relate to
others during times of change. “Managers may react negatively to change, because their major
task is to maintain the status quo” (Williams, 2011). Leaders, on the other hand, will usually
embrace change, because their major task is to motivate their followers to move through the
process of change that is part of the process of continuous organizational improvement.
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Why is change necessary for implementing innovation? What role does innovation play
in developing and implementing change? Interestingly, both change and innovation are
necessary. Non-innovative change may only be change for its own sake, and would not benefit
the organization in any way. Thus, leaders should only concentrate on those innovative changes
that will actually move the organization forward on the learning curve and help maintain the
sustainability of the company’s competitive advantage and the realization of its mission and
vision statements.
In Samsung’s strategic early years, consider that the "supply chain management" (SCM)
was not the proper approach to handle their inventory management or even to their operating
cost reduction, too. However, in the 1990s some organizations also in other specific industry
segments, started to realize that there are greater roles which impact on their business operations
by using SCM. That urged Samsung to find a new methodology approach strategy, which had
happened by combining SCM and six sigma. The recommendation to implement that, is to train
the existing supply chain staff, in order to be familiar with new methodology to continue leading
SCM innovations
New strategy encourages the Samsung group's senior management to take the advantages
of that combination covering the following key areas: “a) Project discipline b) sustaining results
c) Well-established HR framework d) Quantitative strength.” Within two years of great
implementation of that combination in the innovation field, that helped Samsung’s strategy to be
more systematic and become a unique as well as useful component for continuous improvement
of its SCM daily activities. Samsung’s implementing process innovation and SCM solutions
improved global business operation. Up to 2004 the company management continued to believe
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that still there was great significant room for supply chain operations for improvement in his
company activities.
Samsung was looking for a solution to the bottleneck in their innovation process, and it
decided the best way to avoid that bottleneck was by implementation of the TRIZ system. “TRIZ
is an established science, methodology, set of tools, knowledge, model-based technology for
stimulating, and generating innovative ideas and solutions.” Henrich Altschuller early in 1947
invented the TRIZ system. That system was published since the 1960s with limited application,
but recently applied widely in the business. The new application of the TRIZ system with Six
Sigma has provided great "valuable user-feedback" in adopting knowledge, tools, and
increasing the stimulates to "directed evolution."
Samsung management doesn’t have any doubts when using the integration of “TRIZ
tools with the Six Sigma methodology” in the improvements of the capacity of Six Sigma in
business competency and development, and TRIZ provides the best solution for Six Sigma
bottlenecks. However, any success in this field will depend upon the commitments of leaders
running Six Sigma systems in their areas and the concept of a training design center, in addition
to the users, materials, tools, and their evolutionary deployment.
SWOT Analysis
Samsung SDI’s innovative products and cutting-edge technologies have been unique and
creative. The writer is going to discuss only two systems of Samsung SDI’s innovations. First,
“supply chain management (SCM) using Six Sigma methodology and a terminology system, ”
in other words called “management=innovation=6 sigma,” meaning the existing working
procedures needing to be improved to coincide with the customer’s requirements and continue in
providing the best innovation process and the quality extensively. Secondly, the RIZ system is
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the system with knowledge and experience that occurs from various technical areas to find
conquest solutions by finding contradiction, which is the key of achieving the ideal final result
(SEC, 2010).Both systems are developing manufacturing processes that cause minimal impact to
the environment.
Strengths
Samsung was using supply chain management (SCM) solutions to process in innovation
systems, as it is the best implementation to the Six Sigma. That gives high quality, developing
the innovative process, an increase in profits associated with customer satisfaction, and that also
gives Samsung better "well-demonstrated" examples of the best resources of technology in the
world.
New system TRIZ innovation culture was a settled innovation process throughout the
whole company in order to expand the mutual growth business strategy further by strengthening
customized consulting programs for each area. Samsung found that the implementation of TRIZ
methodology when associated with continuously developing the toolsets, allows and encourages
the organization management to go ahead in building a high performance innovative culture. The
impact of new methodology implementation shows in resolving many complicated projects. Able
to produce competitive products in the world, it increases the technological innovation projects
as well as financial support.
Weaknesses
There are two enablers existing with SCM and Six Sigma, in the case of handling the
innovation management and the growth. First, Samsung from time-to-time calls for some
changes in innovation projects that can be done with the capabilities of the existing system.
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Second, in order for SAMSUNG to enhance global competitiveness and secure markets prior to
other companies in the rapidly changing market, the roles of SMEs should be increased.
Samsung’s top management has a feeling of crisis, because the firm becomes a fast follower.
Moreover, they have a sense that their company cannot survive anymore in this position, due to
that reason.
SCM Six Sigma has a critical component for creating a lot of changes in innovation,
which will associate with uncertainty of business activities. That will reflect on the processes and
the system itself by increasing the cost and risk. Since TRIZ is a methodology which needs a lot
of time to learn and apply, it is necessary to train inside employees through well-organized
training courses with hands-on practice. Also, since TRIZ was a new system implemented at
SAMSUNG, it was required to hire external TRIZ specialists to carry on the educational courses
at their training center. TRIZ needs to be developed as a science and adapt the technology
predicting methods for business-to-business applications.
Opportunities
Digital technology has invaded every portion of household life along with green energy,
and it has become the core of an eco-friendly digital world. That gives an excellent opportunity
to the Samsung domestic research center to establish the cooperation network with other research
institute centers in different countries. Due to that, DFSS (Design for Six Sigma) activities will
increase to provide more quality renovations in green energy. Today, the main Samsung strategy
is clean energy, for such industry is needed to continue supplying high product quality in this
field. Every day, the demand on competitive industry is increasing in the market, due to that
phenomenon; this will require more economically powerful methodology and has potential
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solutions for new innovation. TRIZ methodology provides both short and long-term products for
economical savings.
Threats
Samsung’s goal is to rise to the top of the best electronics consumer companies in the
world; Samsung primarily focuses on this goal and can carry out this goal through some aspects
such as the following: “product innovation, promotion, pricing, distribution and positioning.”
There are two factors involved in threats--external and internal. The most external threat comes
from the market of competitive firms, and in this regard both innovation systems are under
threat. The internal threat for six sigma is the bottleneck of it, while the TRIZ system cannot
show the internal threat unless seeking to find the implementation to solve the problems.
System for Case Study
The writer chooses the TRIZ innovation system for this case study. Subir Chowdhury,
(2003) who worked as a GM quality consultant, wrote “Innovation can be made more
manageable through TRIZ. Systematic innovation may seem an oxymoron, like jumbo shrimp,
but with TRIZ, individuals can generate amazingly creative solutions without threatening the
stability of the company.”
Today, Samsung’s strategy is clean energy. Such industry is needed to continue
supplying high product quality in this field. Every day the demand on competitive industry is
increasing in the market. Due to that phenomenon, industry requires more powerful economic
methodology, and there are potential solutions for new innovation. TRIZ methodology provides
both short and long-term economic products.
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The TRIZ Journal has indicated that there are no limitations to the TRIZ works; it can be
used in small and large companies and can be used on different levels to solve real problems, in
the field of day-to-day problems, and it will be excellent to develop future strategies of
technology. TRIZ is in use at Samsung, LG, Ford, and more (TRIZ Journal, n. d). The TRIZ has
its core purpose focused on the analysis and is to be used systematically to apply the required
strategies and tools.
In order to find superior solutions, TRIZ will provide the solution that is needed for "a
compromise or trade-off between the two elements.” Samsung thinks that it’s driving future asset
will be the energy industry. Moreover, it wants to be a total energy management solution
company. To achieve this goal it will start with new, small rechargeable batteries that are of high
quality and stable. The company is continuing to develop the new products in different fields of
energy like lithium ion rechargeable batteries for automobiles and e-bikes, fuel cells for
distributed energy generation, and so forth.
The TRIZ system as previously indicated has wide variety for implementation and also
for use in different fields. For example, it helps people in regard to transferring their problemsolving skills from one domain to another. Moreover, it can move them into areas that require
expertise which may need years to study. It depends upon a reliable quality of knowledge, which
contains a growing patent base, almost possibly inserted into other processes, to reduce the main
resources which are required to generate a solution set (Clayton M., Christensen. 2003).
Application of the System
Samsung strategy continues to provide the great product quality of clean energy. Keeping
such competitive industry in the market requires methodology to prove its effectiveness
repeatedly in terms of money. TRIZ methodology provides both short and long-term products
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that have economical benefits. TRIZ methodology is offering new and innovative designs
through understanding the customers and knowing which types of designs are suitable to
customers. (Domb, Ellen., & Kowalick, James. 1997).
Samsung is thinking that its driving future power will be the energy industry. Moreover,
it wants to be a total energy management solution company. To achieve this goal Samsung will
start with implementing TRIZ innovation methodology to produce small rechargeable batteries
that are of high quality and stable. The company continues developing the new products toward
different fields of energy like lithium ion rechargeable batteries for automobiles and e-bikes, fuel
cells for distributed energy generation, and so forth (SEC, 2010).
Kanter’s latest work (2008) offers the most recent iteration of her prescription for
successful efforts at corporate innovation. “Employees once acted mainly according to rules and
decisions handed down to them, but they now draw heavily on their shared understanding of
mission and on a set of tools available everywhere at once” (Kanter, 2008). The corporate
infrastructure of process and procedures is increasingly standardized. This gives employees
operating across multiple locations, time zones, and cultures a “platform” from which to operate.
These standard ways of doing business must be coupled with a sense of shared values and
concern for the community. As long as the standards are “open-ended and inspirational, not
constraining or restrictive” (Kanter, 2008), employees can apply them in their local environment
in positive and innovative ways.
Challenges and Their Solutions
Realistically organizations will either adapt to change or cave and crash, since the global
economy is now intertwined, and managers are called to adapt with technological and innovative
changes that their respective businesses require. These changes could also be cultural due to the
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global nature of the world economy. Culture here could be seen as socio-economic and
technological in nature. Diversity, inclusion, and empowerment have been the major themes of
the corporate workplace for the last several decades. With corporate settings changing,
innovation is necessary to foster an open mind and to improve productivity.
Kanter’s work has significantly added to the body of knowledge in the fields of
leadership, change, and innovation. The issues continue to have substantial relevance today,
because the environment that business faces continues to change at accelerated rates. Companies
that do not adapt will cease to exist. The continuing development of theory on how to
successfully innovate is as crucial today as it was 25 years ago, if not even more so (Kanter, R.
2009).
The innovators need to protect themselves against the new innovation challenges, and
normally they have certain difficulties when they are dealing with leveraging and identifying the
experts correctly. The basic framework collaboration will allow making a useful connection with
innovators, and that connection sometimes will be either actively or passively expert, depending
upon how much they know regarding the innovation challenges. This will help innovators to
have the right tools, which will be implemented in carrying on innovation activities. Companies
seeking the innovation to be successful need some investment in order to supply their innovation
employees the right tools, skills and innovation. They will need to arm and support their
scientists and engineers with the required tools in order to let them focus on their problem
solving, expediting problem resolutions, that should be associated with leveraging external and
internal knowledge and sharing. It is more profitable when discussing and exchanging this
knowledge with their peers within the organization.
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Role of Ethics and Responsibilities
The ethical issues need to be considered while also taking into account business
implementing innovative products. Creation of innovative environmental value needs some
excellent ethical strategies, including a code of ethics which contains standards of ethical
behavior as well as professional relationships for all employees, other organizations, the
community, and society as a whole. Environmental factors should be associated with ethical
decision-making systems so they can pursue shareholder profits and social responsibility at the
same time (So Young, S., & Chan Sik, J. 2010).
Building a strong ethical culture of collaboration is vital to fostering productive
innovation. Companies must foster collaboration amongst employees by providing them with a
practical collaboration framework which allows them to connect, without the need to leave the
context of their innovation work. Samsung has cyber audit teams working around the clock to
receive a corruption report inside the company and outside. Any employee connected with
corruption is punished by proper measures regardless of his or her position.
Recently, Samsung realized they needed to better manage their human resources, which led to
restructuring the audit committee, to provide better practices based on ethical discipline and
integrity. This will return great benefits to its business. Samsung has taken some steps toward
achieving a level of ethics by increasing the numbers of global directors. To reach the proper
level of ethics requires adhering to a high standard of regulations and law. Management provides
an anticorruption class periodically to employees to increase their knowledge of the code of
ethics and to prevent any illegalities (SEC, 2010).
In 2007, the Korean Association of Business Ethics (KABE) announced that Samsung
had been awarded the Business Ethics Grand Prize, awarded to the company that has achieved a
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high level of corporate ethics and social responsibility (Samsung SDI 2007). Moreover, the
company has included the code of ethics in its management courses, educating their personnel,
and harmonizing both profit-seeking and business ethics.
Principles and Practices for Implementing Innovation Change
Kantar’s opinion on many executives’ innovation is that they have fumbled, due to their
way of building structures, handling the controls, and their sensitivity toward the work against
out-of-the-box thinking. Kantar believes, while the new ideas need to be searched, hat research
must go broad and deep. His conclusion about classic traditional structures and controls is that
they do not work well to serve the innovation teams within the organization. “Innovators must be
connected to the mainstream business. Isolating those leads to tension and aborted
implementation” (Kanter, R. M. 2008).
From this experience, we see that any weak steps or resource in the innovation process will have
a direct effect to limit the output of the overall system. Here are the Samsung steps that need a
focus to improve their process: a) It recommended identifying the innovation bottleneck and its
constraints b) Thus, apply the right tools to explore all of the innovation bottleneck’s capacity c)
Let the innovation bottleneck set the pace d) Elevate the capacity of the innovation bottleneck e)
Allow continuous improvement.
To find a bottleneck, it is required to follow some steps to help map the innovation
process. These steps are applied on new products, which are still in the form of ideas before
coming to commercial reality. Steps will include the following: “opportunity identification,
solution development, prototyping, scale-up, testing, and even market launch.” When the
organization is fostered to follow these steps, then it is easier for them to address their constraints
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and identify them. That will lead to great benefit gains in new product profits and in speed to
market as well.
Birkinshaw, Hamel, and Mol (2008) discussed four perspectives in innovation. These
perspectives are perspectives that focus on issues relating to socioeconomic circumstances, a
fashion perspective, a cultural perspective, and a rational perspective. Friedrich, Mumford,
Vessey, Beeler, and Eubanks (2010) suggested some ways leaders can influence innovations in
an individual level, group and organizational level.
Igartua, Garrigós, and Hervas-Oliver (2010) discussed the surrounding problems
confronting general managers, particularly managers of small and medium-size organizations.
Grönlund, Sjödin, and Frishammar (2010) mentioned some approaches to product development.
These authors recommended “the open innovation and the stage-gate” model for innovation. In
spite of all the research that has touched on important issues regarding innovation, none have
fully discussed how employees may be encouraged to learn or implement new changes put in
place by an organization. Because innovation is significant for an organization’s growth (Fusin,
2000), all parties involved in the innovation must be certain that they are acting ethically.
Application of Innovative Processes and Theories to Individuals and Organizations
After recognizing the critical role of knowledge and technological progress in economic
growth by economists in the1980’s and by industries in the 1990’s, all organizations in all
sectors are being faced with a key problem, and that is how to make individuals or organizations
creative and innovative to maintain sustainable power and leverage to a key factor–innovation in
economic growth. Therefore innovation education is becoming a more and more imperative need
and has a strategic priority for all educational organizations and companies in all countries.
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The main purpose in using an open Innovation is to accelerate activates of internal
innovation that use inflows and outflows of knowledge. Also, it is involved in expanding the
markets for external use of innovation. In this regard someone can ask, “What policy guidelines
can be derived from “Open Innovation” theory?” The suitable answer may need a lot of space,
but there is a close and effective answer to “Open Innovation” theory, and the answer will be
considered under the assumption that enterprises may foster the use of external ideas in addition
to internal ideas, including internal and external paths to market, to explore and realize the right
innovative opportunities. The required policies to run the firm should be aligned and work
together with the behavior of innovating enterprises and in addition o the external conditions
which motivate firms to practice Open Innovation (De Jong, J.P.J., Vanhaverbeke, W., Kalvet, T.
& Chesbrough. H. 2008).
Samsung is using both innovation systems (Six Sigma and TRIZ) in order to manufacture
environmentally-friendly products from earlier stages up to development. TRIZ-based systematic
innovation has powerful characteristics that had penetrated almost the majority of industries.
Many companies world-wide use TRIZ to solve both their short-term and long-term problems
and to create new concepts in services after sales and products. References to the scientific
studies 50 years ago show that the TRIZ system, when it is implemented to push to accelerate the
innovation process, by providing the right tools and techniques to carry on the systematic
situation analysis, supplies the effective solution problem, and is associated with new ideas for
development using the combined creativity and system thinking (Cavallucci D. 2003).
Additionally, Samsung was involved in supply chain management (SCM) projects, which
may involve either design or improvement or both. Mainly the system of Six Sigma which
applied in these projects focused on the redesigning of the processes or systems sometimes head
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up a move to the improvement of the performance levels of the existing systems himself. In Six
Sigma logic, the old versions methods are shown through DMADOV methodology (define,
measure, analyze, design, optimize, verify). The said methodology is useful, but it is not capable
to supply the recommended support to run the whole range of SCM projects at the Samsung
Group. “The key difference is that after performing analyses, the task for the project team would
be not to optimize or design as in DMADOV, but to specify how a suggested improvement
would be realized in practice. Therefore, a step, ‘Enable,’in place of Design and Optimize, was
introduced to address this activity” (SEC, 2010).
Literature Review
Every business approaches an innovative idea differently. It is not enough to craft a
strategy or to build innovation processes; such innovations require building and embedding
innovation into the overall organization. Some businesses approach innovative ideas based upon
how they believe the public will respond to the change. Successful innovation requires strategy,
leadership, culture, and implementation by preparing the right people for executing and scaling
the innovation (Markidesand Geroski, 2005). Most of the existing literature deals with
innovation. It is really wildly diverse, needing to be more integrated, and it would be best for
them to be in a theoretical framework.
Kanter, R. M. (2008) wrote “Every managerial generation rediscovers the need for
innovation to drive growth but then grand declarations about innovation are followed by
mediocre execution that produces anemic results, and innovation groups are quietly disbanded in
cost-cutting.” Leading an innovation is not the same as teaching a college course or supervising a
few people. The best-qualified organizations need to have leaders and managers that care about
the employees who work in the organizations as well. “Leaders must be considerate of those they
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lead and help their followers lift where they stand” (Uchtdorf, 2008, p. 53). Covering strategic
levels and the operational, leaders have to show their responsibility to push the innovation
process toward the organizational goal. If individual projects are to be successful, leaders must
encourage team followers and support innovation.
Lazonick and West (1998) were contributing in developing innovative enterprise theory;
mainly it focuses on the way that determines the competitive advantage through the strategy and
structure business enterprise. Teece (1998) also deals with the links of the firm structure,
strategy, and the innovation nature through specifying all the innovation technology properties
and also through the set of organizational suggested requirements to the innovation process.
Suggested structures will include two types of formal framework which have governance modes
and the informal which cover cultures and values.
Besides a company’s external networks, the major elements have an effect on their
innovative activities’ rate and direction. On the other hand, there is literature which deals with
innovation as a process of learning, which is through finding the new problems, contrary to
needing to develop and create solution knowledge to solve those problems. However, some
authors consider learning to be an exercise of individual essential activity.
Simon (1991) and Grant (1996) indicate that most organizational learning theories
discuss how collective knowledge is important as an organization’s capability source. That
sometimes refers to “collective knowledge resembles” as the core memory or the “most
collective mind” of the organization (Walsh and Ungson 1991).
Advanced TRIZ methods and tools which were implemented recently at Samsung are used to
help the improvement of Six Sigma methodology “(DMAIC and DMADV or DFSS),” partially
in the area of Six Sigma methods not working properly, and its tools have limitations in those
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working areas. There are many advantages Samsung can gain through the implementation of
these new tools which can save innovation process time, making it easy to find efficient low-cost
effective solutions which can be used at the defining or any identification phase of the problem,
and these tools are very efficient when theyare used as screen measurements, by which they can
avoid the errors, which is best in reducing reworking, and the excellence of these tools is
working consequently to lower the cost of poor quality that comes from implementation of Six
Sigma.
Valeri, Souchkov (2007) indicates that the benefits of using TRIZ and TRIZ software are
providing the following: a) increasing new ideas and concepts of new products b) solving the
problems of immediate access to the huge numbers of innovative principles stored in TRIZ
knowledge bases c) reducing the risk from missing the proper solution to the existing problem d)
using scientific trends of technology evolution to select the right direction of the evolution e)
increasing the personnel knowledge to solve innovative problems in a systematic way.
Core Aspects of leadership
The leader’s impression about the innovation fluctuated, but the majority consider it
complex. Recently, Samsung management seriously considered the improvement of core
competence management of the innovation improvement. Covering strategic levels and the
operational, leaders have to show their responsibility to push the innovation process toward the
organizational goal. If individual projects are to be successful, leaders must encourage team
followers and support innovation.
In order to become a successful leader, you must have followers. Kotter (2002) identifies
the following eight steps for leading any successful change initiative: “a) Create urgency b) Get
people involved in supporting change c) Need vision for change d) Communicate the vision e)
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Remove obstacles f) Create short term wins g) Build on the change i) Anchor the change in
corporate culture.”
Effective change agents, leaders or innovators understand that the most effective way to
get people involved in supporting change is to let them take ownership for the process.
Leadership responsibility is to encourage innovation teams to share their vision of what is
possible and communicate their shared vision all the time. Thus, that will lead to removing the
obstacles which may exist in the policies and procedures and improve the change. Leaders
implementing a series of short-term wins within the innovation firm’s strategy help to create a
culture of success and create an institutional culture that expects change.
Leadership and effective management can be revealed by the same person. For example, one
person can finish innovation on time and on budget and can also motivate his or her team to
achieve their common objective. Therefore, he or she can be both a leader and an effective
manager.
Principles and Practices for Implementing Innovation
Kanter sees her two early works as “two ends of a spectrum, illustrating how structures,
cultures, and systems shape behavior to stifle or promote innovation and productivity” (Puffer,
2004a, p. 102.). Along with championing innovation, The Change Masters advocated for the
democratization of the workplace as a way to allow everyone to make contributions to that
innovative change (Puffer, 2004a). Successful innovation is by definition addressing current
changes in the business environment.
Peter F. Drucker (1993), in his book, Innovation and Entrepreneurship, lists several
principles which should be respected by innovators. He has grouped these principles into “Do”
and “Don’t” in the process of innovation. In the innovation process, seeking the need is the
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starting point, looking for creating the suitable feeling of urgency, working to generate the ideas,
selecting and evaluating ideas that can work on preparing to develop the prototypes, scaling up
before providing the innovation in the market or at the shop. There are some useful tools for each
step support to carry out the innovation process in effective time and in a suitable
manner (Prather. Charles W. & Gundry. Lisa K. 1995).
Peter F. Drucker (1993) wrote “how innovative enterprises should be managed” and
argues about the importance of management. There are three types of individual businesses
Drucker deals with: “public service institutions, new ventures, and existing business.” These
businesses have individually their own characteristics or ways to survive and to sustain
innovation. The competitive advantage goal is to let businesses continue in innovation, which is
required to keep these businesses in the market and ahead of competitors. This requires early
consideration and treating the innovation like any other work. This work needs some tools to be
possible, and these tools are the policies and practices needed to make the innovation possible.
The specific rules that can cover the organization’s operation areas are: a) Accepting the
innovation b) Regular company’s performance is measurable c) Top management and team
leader for innovation includes structure, staffing, rewards, and incentives d) Be aware to fall in
pit, for that it needs to avoid and distinguish between the entrepreneurial and no entrepreneurial
units, business diversity, “buying in entrepreneurial spirit through acquisition” (Kelley, T., &
Littman, J. 2005).
Effects off Leadership Ethics
The former GM plant manager, Dave Emmett, in his interview almost three months
before his death, draws the attention of the leaders and the successful enterprises to the subject of
business ethics and the necessity of the innovation thinking process (Strubler, Borchers, &
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Redekop, 2009). Additionally, his basis theory in leadership clearly indicated that the leader
needs to give space to his followers to earn their trust, treat them mannerly, pay kind attention to
coaching, and inspire them.
Moreover, a significant characteristic has been brought to the surface related to the
comfortable environment in the innovative organizations, which is building a trust in which the
employees can encourage being creative. On the other hand, Emmett draws attention to
unethical leaders, which will be a strong cause of a mistrustful environment and fear, which will
appear in the employees’ squelched decisions (Strubler, Borchers, & Redekop, 2009). That will
raise the question: does that environment encourage his followers to carry on innovative
thinking?
Additionally, Emmett believes an active leader should have clear vision, but it is the
excellent leader who can implement and communicate that vision to his followers (Strubler,
Borchers, & Redekop, 2009). Sometimes the leader keeps his vision private, but that will not
inspire his followers. Emmett urged leaders to continue keeping their efforts behind the welfare
of their employees, thus encouraging them to contribute and improve the productivity of the
organization and be innovative. Even more, the innovative thinking process will advance by
creating team diversity, and that for sure increases the variety of knowledge. Emmett thinks that
multi-knowledge will help in finding innovative solutions, when the new opportunities come to
the organization.
James O’Toole, in his article in 2009, tries to highlight another kind of aspect and spot of
concern among the corporate social responsibility that includes the following elements: the
innovation, leadership, and relationship of business ethics. O’Toole's perspective is that
corporate social responsibility becomes more popular in business, and the organizations should
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be so aware and take care of stakeholders’ needs too. Management in such companies tends to
implement the process of changing in order to lead their employees forward, and that will be
through the right and practical application to corporate resources in areas that recently were not
considered important. Once the resources relocate, innovation teams and other followers prepare
themselves for the new task, to develop new innovation techniques, and to keep and maintain the
organization sustainability.
O’Toole (2009) indicates that there are other types of leaders, who have certain valuable
rules that relate to the triple bottom line idea i.e. are social, environmental and economic
performance, called “three P’s,” people, planet, and profit. The author’s idea about these leaders
is the following: if the leader wants his followers to be sustainable, then that leader needs to
share and communicate with them their vision, and while they are doing so, that will help to
create a new approach of thinking. That approach will help growth in skills and knowledge for
the employees and maintain a state of stakeholders. Moreover, it displays support for the
employees and stakeholders to consult them before making their decisions.
The study was done by Surie & Ashley in 2008, drawing attention to the leader’s
entrepreneurial spirit and the sustainability of innovation within organizations. Allowing an
environment in which innovative thinking prospers needs to come from the leaders of
entrepreneurial businesses to create the suitable environment. Such an environment will involve
problem-solving characteristics by these leaders. The author’s perspective on business owners is
that often they have creative activities in their own areas that will encourage the employees to
carry on the innovation in those areas. The employees will naturally observe how their leader
acts within the constraints of the organization and with the set of ethical values subsumed in the
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leader’s vision, which will have great value to push the innovative thinking process ahead more
than ever.
Here are some companies that the authors provide as examples to comply with the
“problem-solving spirit of the entrepreneurial leader to sustain a process of innovation." Heinz is
the first example, in which, at the beginning, concentrated on using the high-quality ingredients
to produce healthy, safe, and tasteful food. The second was Ashoka, which “is a global
organization that identifies and invests in leading social entrepreneurs--individuals with
innovative and practical ideas for solving social problems.” In brief it is a non-profit constantly
looking to support social improvement worldwide. The third was Tata Industries that worked
hard to improve the community through the development and building of factories using
sustainable resource materials and local labor. Also, the authors indicate Lincoln Electric, which
has always improved their innovative fashion to reduce the cost and improve product quality,
will help customers save. The above examples are related to “entrepreneurial spirit of
innovation” that we can see growing in a wide range of employees, which will impact the
organization and stakeholders, too.
Research Summary
Just as companies have a business strategy to provide products cheaply and quickly, they
also have influence on customers and their competitors. Markets are saturated with competitors,
and to gain the competitive advantage, it is required to separate the losers from the winners in the
market force. In order to continue in the face of the challenges of a competitive market,
companies are required to keep their process of creative thinking and innovation up to date
within the organization.
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Research has shown that these innovation challenges present themselves in two key
areas. First, due to innovation, many people within the organization resist change. Human nature
is that people usually tend to do things with reasonable freedom, and they have to feel
comfortable. Some people are afraid of the results of change in their lives. Moreover, “often
people are led through the process of change in three-steps” (Williams, 2011).
The first step is to break the stalemate in the current procedures and practices, and by that
instill what the changes need to be within the employees of the organization. This may be
achieved through significant communication to inform individuals of the need for change,
changing the value of the organization and improving business procedures, and promoting
practices that will result from the change. The second step is taken care of the implementation of
change among the creation of new roles, procedures, and practices. Finally, the step of refreezing
is the adoption of new procedures and practices and promotion, making a permanent change
(Williams, 2011).
The second challenge is the difficulty of innovation in the implementation. All other
researchers indicate that this step is a more complex step in the innovation process. It depends on
creative thinking, which without the implementation will do nothing to maintain a competitive
advantage for the organization. Implementation is often more difficult, also, since it is the most
important step in the creative process. As a result, this shows it is in need of sufficient and
effective leaders to guide the staff through the change process and the completion of the
implementation of innovative thinking.
There are many styles of leadership available in the market force for the organizations.
Most reviewed literature has shown that effective, suitable leadership characteristics to lead the
innovation and change are transformation and charismatic leadership. Leaders are often
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interested in improving the transformation and empowerment of followers. For instance, the
values held dearly by charismatic leaders, along with a clear vision for the future, will enable
them to inspire staff to follow the process of change and innovation.
This kind of leadership can be seen in Kun-hee Lee, Executive Director of Samsung.
“Kun-hee Lee’s ambition was straightforward: He wanted to transform his company into the
world’s top consumer electronics brand--the place that makes the coolest stuff” (Marmot, 2005).
With a leader who possesses a strong set of values and a vision of the game, who seeks to lead
by inspiring, Samsung now is a leader in the world of flash memory and flat panel screens.
Samsung has five forces to develop a competitive innovation strategy relation with suppliers,
with buyers, new entrants, substitutes of product at emergency and generic technology strategies
(Samsung, (n.d., p3). Also it is one of two technologies for the digital ear. Moreover, it is the
most successful high-tech company in the world.
Interpretation
Companies have benefits in the implementation of innovation and change, but they are
also facing difficulties at the outset. Staffs are often feeling comfortable in their daily normal
routine circumstances, which encourages them to resist any thought of change. Such resistance in
the areas of innovation and change can be the elements that prevent the continuity of the
companies to maintain their competition in the market.
Many organizations thought that innovation was involved with creativity at the same
time. In order to foster innovation in their organizations, they are investing in initiatives to help
their employees, such as in creative-thinking workshops, thinking out of the box, and conducting
training modules. Those activities require a leader to have the abilities to lead the teamwork of
his team and pay attention to the other elements which have a direct effect on a model for
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organizational innovation, like diversity and ethical environmental practices. “Samsung believes
that ethical management is not only a tool for responding to the rapid changes in the global
business environment, but also a vehicle for building trust with its various stakeholders including
customers, shareholders, employees, business partners, and local communities” (Samsung, n.d.).
Usually, companies are required to promote creative innovation thinking and change in
order to continue in a competitive market. That gives the impression that these companies need
to develop effective leaders. Companies will be calling on these leaders to guide staff through the
change process and the final implementation of innovation. This will require certain
characteristics and speciation of those leaders, and some of those characteristics are the
following: always be aware of the feelings of employees in the organization, as well as the
implementation or adjustment of the control on their resistance to change. They will have to
ensure that the team and staff are supporting the activities and the necessary things required to
keep the company moving forward. Additionally, they are looking to be convinced of the
requirements to change elements, needing to figure out the best way to fit that change with new
organizational culture to gain high productivity, and analyze the impact of the change on their
teamwork Successful leaders must be able to discuss the new plan with their teams to decide how
the new practices and procedures coincide to improve the company.
Conclusion
This research has clearly explained how innovation, creativity, and change are important
to keep the companies in a competitive market all over the world from standing still. It has also
proven that effective leadership and innovation is necessary for this change to the productivity to
start. However, as is the case with most research, this is not comprehensive. There is a need for
more research into the different leadership styles and how they relate to innovation and change.
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The five theories of innovation and leadership were included in this research project. While other
theories exist, some may have found such other theories more effective than those that appear
here. Others should apply McGregor's theory of X and Y managers to more aspects of the
process of innovation and change.
I think that due to shortages of good practices in handling change and innovation, it is
desirable to apply surveys and conduct interviews with a number of leaders who led the
successful stories of their organizations, experienced practicing team behaviors with their teams,
and led them through the process of innovation and change. That interview or survey should
cover the variety of the leadership styles, including but not limited to their techniques in several
areas of change practicing, as well as innovation related to robust and sustainable product. I think
that will contribute to increasing the knowledge base toward the better implementation of
innovation and change and keep our planet clean with minimal pollution.
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