The Martial industry in the U.K. has seen progressive growth in the past decade; this is parallel to the rising interest from consumers towards the health and fitness industry. (Mintel 2007.)
The purpose of this report is to investigate the state of innovation within the Cassar Academy of Choi Kwang Do. The state off innovation will be assessed by carrying out an innovation audit. This audit will use comparative innovative models and theories to give the reader a clear and concise understanding on how successful the Cassar Academy has been in implementing innovative features into its business.
Firstly, the audit will use secondary desk research to examine the market that the Cassar Academy of Choi Kwang Do operates in to determine what external factors influence the innovation potential within the industry. This will form an overview of the environment, highlighting:
The key factors that influence innovation within the environment the Cassar Academy operates within.
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Innovative factors behind the Cassar Academy
How these factors have played an important role in overcoming difficulties such as growth in search of economic renewal.
How the national innovation system has supported innovation.
Secondly this audit will review current thinking on innovation, analysing different theories and concepts relating to innovation and the business context, focusing on:
The management of innovation
The impact of innovation on economic renewal
The importance of the national innovation system in the U.K.
How globalisation has influenced innovative strategies.
We will incorporate this information to create a knowledge base for the audit, whereas primary research will be acquired via semi-structured interviews, emails and telephone conversations to assess the company's innovative possibilities within in the market, and gauge the state of innovation within the Cassar Academy.
The Cassar Academy has been found to be suitable for this audit as it has offered the level of participation needed in order to fulfil the assessment criteria; it also incorporates innovative values within its culture. The owner, Vince Cassar, was kind enough to allow us access into his academy and was able to provide us with a vast amount of useful information. He was also keen to show off this revolutionary martial art of Choi Kwang Do.
Following the interview with the owner of the academy (Vince Cassar) we will examine and evaluate the innovation processes within the Academy. We will do this by giving a brief description of Choi Kwang do and how the Cassar Academy has implemented innovative strategies into its business operations including:
The innovation audit will conclude by offering recommendations towards further improving their innovative process and overall organizational structure in order to take advantage of the innovative capability and opportunities within the martial arts industry.
By initially reviewing the successful innovative strategies employed by the Academy, following on to highlight areas for improvement, and ending in recommendations and future goals and objectives for the Academy.
Martial arts in the UK have been on a stable rise for the past decade; however the martial arts industry in the UK is hard to define as there are numerous private tutors and independent classes that somewhat fall under the radar.
With regards to innovative capability and the evolution of the traditional arts, the martial arts industry is ripe with potential, with many practitioners introducing different types of martial arts to the UK, from cage fighting to Choi Bo. These martial arts often gather pace and popularity through classes at health and fitness centres and in schools, which mirror the success of Choi Kwang Do and the Cassar Academy, which Vince Cassar started through similar classes.
A common reason for starting martial arts training, particularly Choi Kwang Do, is fitness. In our interview with Vince Cassar he claimed: "Although many people are interested in the self defence aspect of the art, people who start Choi Kwang Do want to improve their physical well being."
There is a huge opportunity for growth within the health and fitness industry, and the Cassar Academy recognises this opportunity. From 2004 to 2009 it has grown to £2.5 billion (Mintel, 2009), up a quarter in the last five years.
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With the Academy taking on traditional gyms and health clubs for a share of this market, innovation is vital to its success.
Current thinking and definitions of innovation:
We begin this section with a review on current innovation thinking, we have incorporated this information to assess innovative application in the business world and the potential for innovation at the Cassar Academy of Choi Kwang Do
In order to gain a complete understanding of the models and theories used in this field, the auditing team have drawn heavily on various business and innovation literature as well as lecture notes.
The term innovation has been defined in many different ways. In Joseph Schumpeter's definition of innovation, he describes innovation as the introduction of good/service of which consumers are not yet familiar with.
In his book "Strategic management of technology and innovation", Burgelman simply defines innovation as "a change in technology". 'High-tech' innovation specifically, is often relative to the market it is being introduced to; following trends and technological opportunities in a specific industry.
Innovation is also often related to the term: "invention", however this is a common misconception. An already existing concept may be considered innovative if it is successfully implemented to a new market context. Although the concept itself may not have been newly "invented", its introduction to a new market or even its combination with another sector would be considered to be innovative. The innovation concept not only includes newly founded ideas, it also welcomes innovative acts that may combine already existing factors to create something unseen in that market.
Large companies often have the resources to implement innovative changes and manage them across the board, however when it comes to smaller companies with lesser resources, it is important to ensure that the management of innovation is well organised in order for it to be efficient. The Cassar Academy may well strive to become more and more innovative; however the management of this innovation is essentially equally important.
The Accenture report in 2009 claimed that:
"Innovation is a creative endeavour that cannot and should not be managed."
This statement relates to the idea that innovation comes naturally, it blossoms in a surrounding that welcomes change but remains a form of business that must be left to appear on its own. It is in our mindset to improve and be innovative in areas that need improvement, but like any instinct it cannot be predicted. However, it has become apparent that many companies around the world are contradicting it. As mentioned earlier innovation has become valued in all sectors and is now considered as being an important strategic priority, this has led to companies encouraging innovation by incorporating the management of innovation into their business strategy.
A new idea will be a good one regardless of where it is coming from and will be appreciated thus rewarded coming from any sixed enterprise. This fact has encouraged smaller firms to encourage innovation in the industry and to support it.
The Role of Innovation in Economic Renewal
In our current economic climate, the contribution of innovation in creating economic renewal has become increasingly important. It is considered to be a main reason behind the noticeable increase in investment by the European Union and the UK government into national systems of innovation.
Andrew Cahn, the Chief executive of UK Trade and Investment states that:
"Innovation drives economic progress."
This short but descriptive statement relates to the idea that the result of innovation is economic renewal through the creation of new markets. Although innovation drives economic renewal and development, it should be understood that a country's national innovation system and its governance effects the implementation of innovative ideas. Therefore, the national system of innovation is of particular importance. Fagerberg, Jan and Srholec, M (2008)
National Innovation System
The U.K. innovation system is in a great shape to support its creative and innovative industries, through awards schemes and private sector funding, the government have signalled their intentions of galvanising the economy though a growth in both innovative companies and entrepreneurs. Andrew Cahn (2008) shows his support for the innovation's role in the economy by claiming that for businesses it will mean sustained or improved growth. For consumers, it will mean higher-quality and better-value goods, more efficient services and higher standards of living. To the economy as a whole, innovation is the key to higher productivity.
Globalization and Innovation:
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"Central to the policy debate on how to maintain strong economic growth in an era that is increasingly being defined by the globalization of the competition." Tidd (2009).
According to this statement, one can assume that innovation plays a key role in creating new markets and maintaining economic renewal. Globalization is one of the main drivers of innovation, and has created new markets for SME's. Increasing competition has meant that companies are innovating to find a market edge on competitors; this can be in the form of the actual product or service, or strategic decisions made by the business managers.
The audit will consist of a questionnaire that incorporates the above theories in order to assess how they affect the company. The questionnaire was based around the idea that Vince Cassar had already employed a few innovative strategies in his business model, and whether they introduced a new concept, or if it was the way concept was introduced that made it innovative.
The aim of the questionnaire was to learn more about the management approach Vince Cassar used in relation to innovation. Innovation has often been mentioned as playing a part towards economic renewal as well as playing a part in giving an S.M.E a fighting chance when competing against larger competitors. The audit was designed to find out what funding or financial support was available to the Academy, and how the support of the U.K. National Innovation System helped the competitiveness of the firm.
The interview begins with a few general questions. The name of the company is confirmed as well as the status of the person being interviewed within the company, in this case Master Vince Cassar. This rest of this section is formatted to gain a general understanding of the company as an outsider, while noting the objectives and overall management priorities of the academy.
The second part of this questionnaire will introduce innovative strategies within the company and the benefits they endear to gain from implementing them. Following on with questions regarding the importance of innovative strategies within the academy, and identifying what departments they have been implemented in, it will also highlight the importance of the process of introducing innovative strategies within a company's managerial infrastructure.
The goal of these questions is to understand the ways innovation was firstly introduced to the company, what was done to determine its success, and finally the results of the decision to include innovation into the Academy's marketing strategies.
When comparing administrative managerial and entrepreneurial decision making, we wanted to see whether Vince Cassar was more entrepreneurial rather than managerial. These Questions consisted of queries on strategic orientation, commitments, resources, management structure, and culture. This was the only part of the questionnaire which was closed ended, containing only 2 answers, common in market research questionnaires.
Innovation process within the organisation
"In a nutshell, Choi Kwang Do (or "Choi" as it's commonly referred to in class) was created by Grandmaster Kwang Jo Choi to develop an effective martial art that would also relieve Martial Artists of predictable injuries that can be suffered by practitioners of traditional martial arts, especially joint injuries." (Description from cassaracademy.com)
During the search for companies to review, the Cassar Academy emerged from a market that gave minimal indication of real innovation. The Cassar academy is not innovative in the way of a new martial art, as there are many martial arts that have popped up in the UK boasting new techniques and styles. It is the evolutionary way that Choi Kwang do has developed with regards to scientific research and injury prevention that has made it stick out in terms of innovation.
The Cassar Academy was launched in the summer of 2007, and whilst many companies have been suffering from the global recession, against all odds the Cassar Academy has expanded by three hundred percent in the past 18 months (Interview with Vince Cassar, 2010.) Master Vince Cassar, who is the Owner of the Cassar Academy, is one of the leading instructors in the world of Choi Kwang do, and he is a faculty member of Choi Kwang Do international and works closely with the founder of the art Grand Master Kwang Jo Choi.
The Cassar Academy was one of the first Choi Kwang Do schools in the U.K. and harbours the ambition to become one of the leading schools in the world.
The Cassar Academy has shown to be both original as well as innovative in more ways than one; Choi Kwang Do is a relatively new martial art, an evolution of the old and familiar art of Tae Kwon Do. Master Vince Cassar is at the forefront of this evolution, and is one of the few members of the Choi Kwang Do international faculty.
The first sign of innovation within the academy was the marketing strategy they implemented. Instead of just relying on tradition methods, the Cassar Academy has fully incorporated a social media marketing campaign with the aim of member retention and awareness of the art as a whole.
This includes blogging in the martial arts community, fan pages set up via Facebook.com and youtube.com to name a few. This strategy evolved from a conversation that the owner had with one of his Pupils, Jason Williams who now is his Social Media Marketing consultant, and now attract nearly 300 fans and thousands of hits online. This coupled with an effective SEO (Search engine optimization) campaign, has been one of the main factors behind the increasing memberships since the opening back in 2007.
Traditional sales methods have also been incorporated; such as leaflet distribution to households in South West London and commission to their staff to gain memberships outside of the actual school.
The Cassar Academy employs around 30 staff, from part time instructors to full time instructors who also have administrative duties, Master Cassar is keen his staff having knowledge and passion for the art whether it be an administrative role or instructing. "All staff have an input into the company no matter how big or small." Vince Cassar, (2011).
Anything outside of the employees comfort zone and expertise is often outsourced, such as marketing or marketing. However whenever there is an opportunity to Master Vince Cassar will try to outsource this work to members of his Academy, for example his graphic design work is done by one of his students, it gives the academy a family feel and helps the development of the community which is one of the aims for Master Vince Cassar.
The Cassar Academy was placed within the national innovation system, when asked if the owner had received any financial supports or funding from institutes supporting innovation, he responded that all his progress had solely been financed through the Academy's profits
In an economic climate as competitive as the martial arts industry, smaller firms are slowly starting succumb to bigger organization. A bigger enterprise, regardless of the product being sold or the market area will always have an edge over their smaller sized competitors. Whether this advantage being present in the cost, therefore the selling price, of the product; or it being as simple as their marketing and advertising budgets, the advantage will always be present. However, Innovation at the Cassar Academy has forced a level playing field; through innovative decisions made by the Owner Vince Cassar. When asked about managing innovation Master Cassar was keen to give examples of innovative ideas thought up by students and colleagues.
At the interview, Vince Cassar also announced that international expansion of Choi Kwang Do was in fact part of their business plan. The Founder of Choi Kwang Do is currently on a tour of the Americas, the U.K culminating in a huge seminar in Seoul, Korea (the home of Tae Kwan Do) where Vince Cassar foresees the explosion in popularity of Choi Kwang Do internationally.
Review of Successful Innovative Strategies
Marketing strategy - Social media marketing has proven to be very successful, through the Academy's interaction via social networking sites with students. The marketing strategy has improved customer retention and has also raised awareness of Choi Kwang Do as an art. From a business point of view, it helps increase awareness for the brand thus increasing the customer base through prospective students, however on a personal note; Vince Cassar described it as a personal goal to increase to popularity of the art he has been practising over the last 20 years.
Resource Management - The way in which the academy has acted with regards resource efficiency, can also be admired. Vince Cassar commented on this stating that the 'family feel' around the Choi Kwang do community particularly at the Cassar Academy is vital, and that everyone looks out for one and other.
Areas for Improvement
Innovation management - The creativity of the staff at the Academy cannot be doubted, it is the success rate in implementation of these ideas that is a cause for concern, as an SME there is little room for wasting resources or time.
Whilst the creative 'juices' are flowing at the Cassar Academy, it is not as easily said for the efficiency of innovation, whilst ideas are always forthcoming, management of these ideas and implementation is not managed to its full potential. Vince Cassar remained defensive of his management structure, stating that all ideas are noted and that he has the responsibility of making the decision according to what is right for the business, however as mentioned in the Accenture Report on Innovation in 2009, effective management of innovation requires cross functional cooperation and dedicated management and accountability across the end-to-end innovation process.
Company development and innovation - As mentioned earlier in the report, the Vince Cassar Academy is at its growing stage when related to the company life cycle. Marketing innovation is often deemed most efficient when used at later stages of the company life cycle. When in its growing stages, it would be more beneficial for a company to implement process innovation to its strategy.
Therefore it is our first recommendation that there is an assigned structure to how these ideas are successfully implemented.
These process changes will require the management to hold monthly meetings with staff to discuss new ideas, and allocate time for reviewing each step of the process detailed below:
1. Idea Specification
2. Idea Implementation
3. Idea Verification
4. Idea Validation
5. Idea release
6. Final Idea Review
(Adapted from Managing innovation: Integrated technological, market and organizational change, case study, Ferrostar Ltd.)
Idea Specification - This is the initial notification of the idea to the manager during the monthly meeting, indicating goals for the business such as R&D, growth or increased profit.
Idea Implementation - The process needed to develop the idea into reality will be discussed will be reviewed.
Idea Verification - After the idea's implementation is verified by those concerned, it is time to review the idea again in order to gauge whether the result of the implementation will have its desired effect from the idea.
Idea Validation - The idea must be viable to implement, this is the stage where the owner will see how the idea fits in with the overall business model, and what objectives it helps to fulfil.
Idea release - The idea is implemented fully within the organisation.
Final Idea Review - After the first 3 months the idea is reviewed and the advantages and disadvantages are weighed out to see whether it has been successful in achieving the goals set.
"Innovation success is a consequence of creating the culture in which it can take place" (Anchor Case Study: innovation at 3M, Joe Tidd and John Bessant, 2005)
To increase innovation within the Cassar academy we will strive to also include the following strategies to the overall business structure:
Recognition and reward - Instead of generic employee of the month award, and award can go to the most innovative employee, or reward schemes if an idea has been successfully implemented and caused positive changes within the Academy, This can be applied to students also to help boost the community within the Academy.
Acceptance of mistakes and encouragement of risk taking - This is already deemed as part of the management culture within the Academy; Vince Cassar has appeared to be an .innovative thinker therefore this should run parallel to the culture of his employees.
Hiring innovators and encouragement of employees who work on ideas in their own time - Resource support will be given to expand on ideas, and management support to take them forward.
Investing in Rand D and networking - Networking is something the owner of the academy is already very active in, however the R&D side of the business is still dependant on Choi Kwang Do International based in Canada, either a localised research policy is needed on the scientific findings that Choi Kwang Do prides itself on, or the Academy, as one of the top schools, needs to work more closely with the faculty.
(Adapted from Anchor Case Study: innovation at 3M, Joe Tidd and John Bessant, 2005)
An operation manager will be assigned to the duty of monitoring these models, he/she will report back to the owner to discuss results, and make necessary changes according to the success of these strategies.
Following the implementation of theses innovation models the Academy will create an innovative culture within its organisation, and also increase the efficiency of management decisions and operations. These recommendations will help the business grow and fulfil the overall company objectives.
What is your name, are you representing the company as a whole, and what is your role in the workings of the Martial Arts school?
What do you believe is key for the success of a teaching based enterprise?
Can you give us a brief description of your company (number of employees, location, what you supply)
What makes you different from competing Martial Arts schools?
Are you planning on expanding, and if so how?
In terms of your enterprise and its potential, what is your ultimate goal?
How would you rank the different sectors of your company according to their importance
Did you start the company on the basis that innovation was going to be a big part of your strategy or did innovation integrate itself at a later point in the company's development?
What types of innovation methods does your company utilize?
So far, which have shown to be the most successful and why?
How did you first introduce innovation to your company
Upon its introduction how did you measure its success?
In order of most to least, what sectors have you used innovation in?
Which dimension of innovation does the academy satisfy innovatively? Economic? Social? Psychological? Or Managerial?
Do you give your employees enough freedom to develop innovative ideas they may have in regards to the company's development?
How do you decide on which ideas are worth undertaking?
Which dimension of innovation does the academy satisfy innovatively? Economic? Social? Psychological? Or Managerial?
Do you think innovation is a good move from most enterprises or does it simply match your sort of enterprise and its methods (martial arts school)
Advertising is key in any business, what are your methods of advertising and how has innovation affected them?
Does your company get subsidized by any form of authority in regards to innovation?
"The concept of the innovation system stresses that the flow of technology and information among people, enterprises and institutions is key to an innovative process", which part of that statement do you find the most relevant, and if there are any, which do you disagree with?
What type of feedback did you receive from customers after having applied innovative changes to its structure?
Entrepreneurial vs. Administrative Management Decisions Questions
Entrepreneurial: Driven by perception of opportunity
Managerial: Driven by controlled resources
Commitment to opportunity.
Entrepreneurial: Revolutionary with short direction
Managerial: Evolutionary with long duration.
Commitment to resources.
Entrepreneurial: Many stages minimal exposure
Managerial: A single stage with complete commitment out of decision
Control of resources.
Entrepreneurial: Episodic use of rent of required resources
Managerial: Ownership or employment of required resources
Entrepreneurial: Flat with multiple informal networks
Entrepreneurial: Based on value creation
Managerial: Based on responsibility and seniority
Entrepreneurial: Rapid growth is top priority
Managerial: Safe, Slow and steady.
Entrepreneurial: Promoting broad search for opportunities
Managerial: Opportunity search restricted by controlled resources; failure punished.
(Adapted from T. Brown, P. Davidsson, and J Wiklund, "An Operationalization of Stevenson's Conceptualisation of Entrepreneurship as an Opportunity-Based Firm Behaviour." Strategic Management Journal 22 (2001), p 955.)