The need for innovation to generate success


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.

2.0 Purpose

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, 2011).

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 effectiveness

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 effectiveness 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 effectiveness framework within an organisation (Crosswhite, 2009)

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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 (Schneider, 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 to innovation and excellence. Various Research and Development Centres have 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 improved service efficiency only with no element of innovation in place. This essentially means that UMMC's leader recognises that there are areas within the organisation that needs improving, and set about to rectify the situation, with the caveat being innovation not playing any role in these improvement methods.

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).

Compared to 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 Xerox's current CEO and Chairman 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).

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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, equipping its employees with the right skills from an innovation point of view can still be considered as lacking.

6.4 Process and tools

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 rewards were tied to the successful functioning of that process for all Xerox personnel (Boulton, 1996).

Xerox continues to build on the heritage of innovation through its acquisition of Affiliated Computer Services (ACS) in 2010. 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, 2009).

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 for internal integration and to improve service efficiencies. However, the innovation efforts here were wholly met by healthcare technology companies that develop, test and market their technology suited for this organisation, rather than UMMC themselves. While there was some creativity portrayed by some senior staff with regards to workflow efficiencies, there was no internal innovation originating from the staff due to limited resources and knowledgeable workers on the systems implemented.

7.0 Recommendations

While Xerox is consistently innovating new products and cost-effective business solutions and services, the healthcare industry's innovations aim 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).

Innovations in health care are related to product, process or structure. The product is what the customer pays for and typically consists of goods and services, for example, clinical procedure innovations. Process innovation entails innovations in the production or delivery method. However, customer does not usually pay directly for process but process is required in order to deliver a product or service (Varkey, et al., 2008).

A 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. On the other hand a structural innovation usually affects the internal and external infrastructure and creates new business models. However 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. (Varkey et al., 2008).

Based on the analysis undertaken in comparing and contrasting Xerox and UMMC the following will be the author's recommendations on building a systemic capability to promote innovation in UMMC.

7.1 Leadership

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 focus on 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 the idea of innovation in UMMC which can then lead to increased motivation in its employees.

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 do not value, support, allow, reward or practice innovation the message about the importance of innovation is lost. By allowing autonomy, encouraging risk taking and liveliness 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'.

Innovation can occur in an environment where individuals feel safe and un-threatened; hence providing the correct environment is crucial. A secure base enables one to look beyond his or her current comfort zones into the unfamiliar. Managerial behaviours are a key part of the psychological environment, and in promoting innovation managers freedom to take risks can be given to people, but criticising when one makes mistake should be avoided.

Another way of promoting psychological safety is to create a working environment, which is similar to the home environment. For example, give individuals the freedom to make their own decisions about how they want to work and do not restrict the design of the office to the traditional way. It is best to allow people to feel like home in the layout and decoration or allow work to be sociable.

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, and whether these ideas were generated internally or externally it does not really 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 companies should learn how to mobilise and monetise the imagination of every individual employee every single day since ordinary employees can actually become extraordinary. Essentially, 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 develop 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.

Staying within accepted boundaries preserves ordinariness. However innovation is produced when those boundaries are broken and when our assumptions about the way we live, the way we work, and the way we interact are challenged. Challenging assumption means going beyond an individual and organisational comfort zones.

7.4 Process and tools

Making innovation a self-sustaining capability requires proper tools, processes and mechanisms, which can be used routinely to turn innovation into corporate reality. Clearly, the right tools and processes will make a big difference in what one can achieve in every aspect of life (Skarzynski and Gibson, 2008, p. 242). Based on the analysis there are lack of processes and tools in place to encourage innovation in UMMC. As such organisations should make innovation everyone's job by engaging all in the idea creation process.

Organisations are made up of individuals, and therefore one of the key factors to a healthy organisation is in its human resources. To be innovative an organisation should comprise of creative people at all levels of the organisation, example, non-managers as well as managers, who welcome change, and who are not restricted by unfamiliarity. These things occur naturally in some people and an organisation can recruit those who have these attributes and who can take accountability for innovation. However they can also be developed and managed by other people such as managers, colleagues, organisational leaders and by the organisational systems and values.

An organisation can use their insights into the customer organisation to develop innovations for the benefit of both. This refers to something more than providing customer satisfaction. However one need to have in depth knowledge of needs and processes to help the organisation to work with, rather than for, customer.

8.0 Conclusion

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. One of the main components of the innovative organisation will be to clearly articulate the vision and the mission of the organisation with a clear sense of commitment and shared organisational purpose right from the top management. This is clearly evident within Xerox.

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 can dramatically improve service quality and heighten customer satisfaction.

However, organisations must be aware that competitive advantage is earned mainly through the talent of the employees. Their core values should ultimately be in line with the organisation's vision as only then can they have a clear idea on how to contribute effectively towards the business growth of this organisation. Again, this is something Xerox does extremely well. Perhaps the most important ritual will be to re-surface and practice reflective learning and effective knowledge transfer within the organisation.

In the age of globalisation, it cannot be denied that the economic growth of an organisation will depend on its ability to create new innovations and new findings. Organisations that let innovation slide today will invite 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 rightly recognised as a global leader in innovation. Hence, the big challenge now for UMMC is to look towards Xerox and identify key innovative ideas and practices that can be successfully implemented within its own organisation. The success of this exercise is largely dependent on the commitment of UMMC's leadership and how much value they see in transforming UMMC into a more innovative health care service provider.