In today's fast changing climate and competitive environment, organisations need to be innovative in order to succeed. Innovation is defined as a multi-stage process where organisations convert ideas into improved products, services or processes in order to compete and make distinction successfully in their marketplace (Baregheh et al., 2009). Therefore it is important to create a climate which is conducive in building the kind of systems and structures that produce the right innovative environment to drive the desired outcomes.
However organisations comprise of people and it is the individual person that possesses the capability to find and solve complex issues creatively. As such, these creative behaviour needs to be harnessed among people with differing skills and perspectives for extraordinary things to be achieved within an organisation (Tidd and Bessant, 2009, p. 99). Therefore organisations should strive in encouraging every employee at every level and location, provide proper training in the principles, skills and tools of innovation to discover new insights, spot unexploited opportunities and generate novel business ideas (Skarzynski and Gibson, 2008).
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In keeping with this, the management's challenges will be; how to go about building the kind of organisations in which such innovative capabilities can flourish, thus encouraging and developing innovation within the organisation which adds value to its' customers. As such it is important to analyse organisations that are constantly looking for ways to deliver more value to their customers with innovation as a main focus and review how this can be adopted in other organisations to bring about positive changes and more importantly adding value to product or services offered.
This report aims to critically evaluate how the management at Xerox Corporation, which is the international leader in the business of document management, has attempted to encourage and develop innovative capabilities within the organisation. The Xerox management systems will be compared and contrasted against the management systems of University Malaya Medical Centre (UMMC), Kuala Lumpur, which is one of the leading healthcare organisations in the Ministry of Higher Education, Kuala Lumpur from an innovation capability point of view.
3.0 Background of Xerox
Xerox was founded in 1906 as the Haloid Company; named as Haloid Xerox in 1958 and Xerox Corporation in 1961. With sales of $22 billion in 2010, Xerox is the world's leading enterprise for business process and document management business that offers a widest array of products, services and solutions in the industry with continued focus on innovation. Xerox from its beginning has been regarded as an organisation that focuses on innovation and diversification. In tandem with this, it acquired the Affiliated Computer Services (ACS) in 2010, and has since become a leader in business process and Information Technology (IT) outsourcing as well.
Xerox's investment in innovation has brought to market more than 100 products from the year 2005-2008, building the broadest portfolio in the industry and in Xerox's history (Xerox Annual Investor Conference, 2008). With the six core values since its inception, which are the heart of what Xerox do, namely, succeed through satisfied customers; deliver quality and excellence in all undertakings; requiring premium on assets; use of technology to develop market leadership; value its employees and behaving responsibly as a corporate citizen, have been the very reason for their success (Xerox, 2010).
4.0 Background of UMMC
UMMC has come a long way from its humble beginnings. Officially opened on 5th August, 1968, it has since expanded rapidly. UMMC in its vision statements aims 'to be a world renowned medical centre providing highest quality healthcare, medical training and research according to International Standards' and achieving this through its mission statement as being 'committed to providing the highest quality healthcare, training and research in tertiary medical services, community and patient welfare services' through its core values of 'excellence, efficiency, empathy, patient-centredness and friendliness'. UMMC has undertaken collaborative researches with overseas and local partners and this has brought UMMC ahead of biomedical science and technology, leading the advance in new discovery and findings (UMMC website, 2011). Over the years, UMMC has assisted in the diagnosis and treatment of countless medical conditions in Malaysia.
5.0 Building a systemic innovation capability
While there is no single right way to organise an enterprise for innovation,
Skarzynski and Gibson (2008, p. 229) stated that there is a practical framework that can be used to develop, deploy and sustain a systemic innovation capability within the context of one's organisation with some common components. These include leadership and organisational infrastructures, culture and values, enabling processes and tools and people and skills. These four interdependent and mutually reinforcing components need to come together to institutionalise innovation as shown in Figure 1.
Figure 1 shows a systemic innovation capability framework within an organisation (Emerald, 2007)
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However the challenge will be to alter these organisational elements to best suit to one's company's culture and goals, which can bring about growth objectives within the organisation.
6.0 Analysis on innovation capabilities between Xerox and UMMC
The following will be analysis between Xerox and UMMC on innovation capabilities within its respective organisations based on the framework discussed above.
6.1 Leadership and organisation
Peter McColough, the Chief Executive Officer (CEO) of Xerox in 1970, exemplified strong leadership by example. McColough, once explained to Business Week that "a company is made not only by the quality of its products and services, but also by its people, especially its top people" (findtarget reference, 1999). Under McColough's leadership The Palo Alto Research Centre (PARC) was founded and chartered to create "the architecture of information" and has contributed to the creation of more than 30 companies. It is celebrated for innovation such as laser printing, which is the large part of the Xerox business of today (About.com, 2011).
Xerox continues its commitment of inventing and innovating new product through the Xerox Innovation Group (XIG) under the current leadership, Chairman and CEO, Ursula Burns, who gives her unwavering commitment o innovation and excellence. Various Research and Development Centres has been established worldwide dedicated to innovating superior products. Xerox has also sought open innovation partnerships and holds more than 10,000 active U.S patents (Xerox, 2011).
When comparing the leadership styles of Xerox against UMMC, over the years, UMMC leaders have shown initiative towards improving the service but with no emphasis on innovation. The current leader has brought incremental changes to the way service was delivered over the past years with the implementation of Information Systems within the organisation. This has converted many departments from analogue to digital departments, particularly radiology department, which has moved to a filmless environment. However this has led to service efficiency only and no element of innovation in place.
6.2 Culture and value
The knowledge-sharing culture was clearly seen in Xerox Corporation where a technology called 'Eureka', a community based system, was developed that lets the Xerox technicians to exchange innovative tips on troubleshooting in the field and advice on servicing its products. Before Eureka, service reps would share their innovative solutions only in group meetings, which were limited to only a few people at a time. It was found that the technicians voluntary submission of those shared tips were primarily due to the personal recognition that they were getting for their contributions. Overall, these brought a significant costs reduction, opportunity and encouraged involvement in the entire service organisation (Powers, 1999).
Comparing with Xerox, the current culture in UMMC does not foster innovation. There is no proper structure to facilitate communication and allow people, ideas and information to flow from one part of the organisation to the other. In other words, knowledge transfer is lacking. In addition there is no autonomy to follow ideas through and listen to the ideas of others. As mentioned earlier, the steps taken to innovate in this organisation are merely on improving service efficiency.
6.3 People and skills
Xerox has been constantly striving to develop human resources contributing to ongoing globalisation and the trends towards a service economy. In keeping with this, some efforts initiated by Fuji Xerox, would be the promotion of Women's Employees' Active Participation to fully display their ability regardless of gender to be managers with relevant training given, initiatives for employment of people with disabilities enabling to work in the same way as the able person, utilisation of veteran human resources and the development of global human resources by giving training to enhance their problem solving ability and other skills needed by nature of work (Fuji Xerox, 2009).
As Ursula stated, diversity of perspective and experience are fundamental in creativity and innovation among the 136,000 employees in 160 countries as of 2011, which are the heart of the Xerox organisational mission and this will help to understand and address the diverse customer of Xerox. As such, all these initiatives were undertaken to tackle the corporate competitiveness and to respond to the market diversification (Xerox, 2011).
Comparing this to UMMC, there have been initiatives by the top management to promote learning and developing skills among the diverse group of workforce. Relevant training and skills either generic or functional based on the discipline is identified during the yearly appraisal within the respective department or from time to time. However, teaching the right skills such as encouraging innovation to enhance service quality is still lacking.
6.4 Process and tools
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The managing-by-process as part of Xerox Business Architecture (XBA) framework allowed the employees to innovate, discover new and more effective ways of working, while defining the process, thus creating avenues to make decisions and changes within their business processes and act as entrepreneurs. Besides that reward were tied to the successful functioning of that process for all Xerox personnel (Xerox 2000: Leadership through Quality, 2011).
Xerox continues to build on the heritage of innovation through its acquisition of Affiliated Computer Services (ACS). ACS's expertise includes managing paper-based work processes and providing business process outsourcing and IT services. The combination of Xerox's strength in document technology with ACS's expertise in managing and automating work processes created a new class of solution provider, which has made Xerox a leader in business process and IT outsourcing (Xerox, 1999).
Comparing this to UMMC, there has been installation of information systems to automate work processes throughout the enterprise under the Total Hospital Information Systems (THIS) partly to integrate internally and to improve service efficiencies. However, the innovation effort here was met by healthcare technology companies that develop, tests and market their technology suited for this organisation rather than UMMC. While there was some creativity portrayed by some senior staff with regards to workflow efficiencies, there was no internal innovation originated from the staff due to limited resources and knowledgeable workers on the systems implemented.
While Xerox is consistently innovating new products and cost-effective business solutions and services, the healthcare industry's innovations aims at enhancing life expectancy, quality of life, diagnostic and treatment options with cost effectiveness and efficiency. Innovation in healthcare continues to be a driving force in the pursuit to balance cost restraint and quality. It is also considered to be a key component of business productivity and competitive survival (Omachonu and Einspruch, 2010).
At the very core of healthcare innovation are the needs of patients and healthcare providers who deliver care. All these purposes and deliveries can be further enhanced with innovation in place. Process innovation would be a novel change to the act of producing or delivering the product that allows significant increase in the value delivered to one or more stakeholders (Varkey et al., 2008).
Based on the analysis undertaken on comparing and contrasting between Xerox and UMMC the following will be author's recommendations on building a systemic capability to promote innovation in UMMC.
Skarzynski and Gibson (2008, p. 230) stated that building self-sustaining innovation capability is fundamentally a leadership challenge and need to be spearheaded by the CEO or Director with full commitment with the organisation's leadership team. Based on the analysis performed, it was found that the leadership in UMMC lacks innovation.
As such the leaders can create space for others to innovate by providing proper resources and giving innovation itself a value and meaning. The promotion of innovation can be integrated into their communication or the messages they send out. By walking the talk, innovation is highly visible and can be better influenced. By taking ownership of change, the leader can legitimise and motivation can be boosted further.
Like organisational leaders, managers at all levels in the organisation can empower individuals to be creative and innovative. Through their close interactions managing individual resistance to change is easier, for example during the feedback session with their subordinates; managers can set goals and later reward them.
As the employees are likely to have closer contact with the manager, the behavior of the manager is crucial. If line managers don't value, support, allow, reward or do innovation the message about the importance of innovation is lost. By allowing autonomy, encouraging risk taking and playfulness managers can create the space for innovation. However, managers can suppress innovation by criticising anything different and only rewarding behaviour that stays within the prevailing procedure. The role of management today should be to create change, not simply to 'get the job done.
7.2 Culture and value
Tidd and Bessant (2009, p.131) stated that culture is a complex concept. However it is about shared values, beliefs and agreed norms which shape the behaviour pattern. Management cannot directly change culture but it can intervene by changing structures and processes. Based on the analysis, it was found that the culture of innovation is lacking in UMMC; hence a cultural transition is needed.
This can be done by structuring the organisation to facilitate communication and knowledge-sharing, which can help promote innovation. There are well-recognised factors in stimulating the idea generation. Openness, sharing and knowledge transfer increase the quantity of quality information, and help people view the world from a different perspective.
They are also critical factors in ensuring that ideas are implemented into valuable organisational innovations. Cross-functional communication (via internal communication or cross functional teams) keeps people involved in all parts of the organisation and makes innovations usable and useful to all. Individuals, groups and organisations can learn from each other only if they communicate.
Besides that, the leaders should ensure groups to have autonomy to follow ideas through and to listen to the ideas of others. The key will be the appropriation, application and implementation of ideas, whether generated internally or externally does not matter. In addition, effective reward and recognition systems should be in place to support its emergence.
7.3 People and skills
Skarzynski and Gibson (2008, p. 238) stated that company should learn on how to mobilise and monetise the imagination of every individual employee every single day since ordinary employees can actually become extraordinary. However, people can be taught new skills for innovation.
Based on the analysis, it was found that the right skills such as encouraging innovation to enhance service quality is still lacking in UMMC. As such a companywide training programme should be in place as practiced by Xerox, which aims to develope and distribute the mind-sets and skills innovation.
The extent to which people and groups are subject to different sets of information and points of contact will have an impact on the level of innovation. As such the more diversity there is the more likely the outcomes are to be innovative and unique. Therefore it is important to challenge ideas and create a constructive debate between groups to generate new ways of thinking and new solutions can surface.
7.4 Process and tools
Making innovation a self-sustaining capability requires proper tools, processes and mechanisms, which can be use routinely to turn innovation into corporate reality (Skarzynski and Gibson, 2008, p. 242). Process innovations include redesign existing organisational processes; invent new organisational processes (especially ones that take advantage of Information Technology (IT) and sharing of ideas on the new organisational practices (Malone et. al, 1998).
In today's ever-increasing global economy the conventional focus on planning and efficiency must now be balanced by better capabilities of innovation and adaptation. Customer's decisions govern the market place and the advent of information technology has enabled companies to reach worldwide market. New emerging technologies adopted in companies must be enabler of change and stimulate an environment to react to individual tastes.
In this era of high information density and the necessity of its rapid dissemination arrangements through the integrated delivery of networks in healthcare, enterprises should see the decision to implement information technology as a necessary step in maintaining their market position. The greater value of a secure and fast repository of information and results will improve the detection of disease through improved patient outcomes. These factors will have a huge impact on the way medicine is practiced and the quality of care patients receive. As such it is important for the UMMC to adopt IT considering the cost savings, service efficiencies and service quality improvements that it can generate through; thus creating a competitive advantage in the business of healthcare. However, the informed decision to select and implement a proper information system as an innovation strategy within UMMC needs judicious planning.
The existence of innovation relies on the environment within an organisation. While there are wide varieties of structural and environmental changes that create new possibilities for the healthcare system as has been discussed in this report, organisations need to enter the "land of innovation" to create potential breakthroughs that dramatically can improve service quality and heighten customer satisfaction.
However, organisations must be aware that we are also rapidly entering the 'Innovation of Humanness Era', where the only competitive advantage is through the talent of the employees and their core values with organisation's collaboration unify a sense of purpose and alignment organisation's goal, which Xerox does extremely well. Perhaps the most important ritual will be to re-surface and practice reflecting learning and effective knowledge transfer within the organisation.
Organisations that let innovation slide today will invite to extinction in the longer term. Innovation is the successful realisation of new ideas that can bring about changes and entails a lot more than mere creativity; it is also about seeing ideas through to acceptance and commercialisation. Having worked out the winning formula, Xerox is recognised as a global leader in innovation; hence building a systemic innovation capabilities which is sustainable in UMMC will enhance its' patient care and service delivery.