The application of structured exploration to develop a culture of innovation

Only recently have the industry’s clients, designers and society as a whole, begun to accept that innovation can offer key benefits in the form of financial growth and increased profits. Therefore, it is apparent that the development of a culture of innovation is of utmost importance if a business is to become universally proactive, entrepreneurial and remain successful. This owes much to the fact that the agility and ability of an organisation to respond to the changing marketplace is driven by its propensity to innovate. However, innovation invariably leads to change, an occurrence that a large proportion of individuals dislike and, consequently, tend to resist. This resistance owes much to fear, fear that the change may be in some way undesirable on either an organisational or personal level. This represents a large barrier to developing a culture that embraces innovation in all its forms. This paper describes an event, the innovation workshop, that attempts to overcome this barrier by enabling the innovators, the company’s employees, to undertake a structured exploration of the term and its meaning within the context of the business. The benefits afforded by the development of an organisational culture of innovation are also discussed. The content will be of interest to organisations that recognise that the development of a culture of innovation, when complimented with a strategy of focused R&D and innovation investment, can deliver productive rewards in the form of both future sales growth and increased stock market value. Introduction An innovation is an idea, practice or object that is perceived as new by an individual or other unit of adoption (Rogers 1995). Historically, the study of innovation and change in the construction industry has received little attention from historians, economists, and construction management researchers alike (Gann 2000). This is intriguing considering that construction organisations, which need to adapt continuously to complex and changing conditions, can only survive and proliferate through innovation. Within this wideranging and highly competitive marketplace the key differentiator between organisations may be an ability to demonstrate innovation capability. The industry’s clients, designers and, more recently, society as a whole, are beginning to recognise that innovation can offer key benefits (Crisp Consultancy Commission report 1999) in the form of financial growth and increased profits (Financial Times, September 2000) Traditionally, the industry has been given opportunity to innovate through investment in focused R&D, part-funded by EPSRC, ESRC, and DETR. Recently, however, the introduction of a number of initiatives has increased the profile of innovation and research within construction. These include (Crisp Consultancy Commission report 1999): motivational campaigns (the Construction Best Practice Programme), directed research programmes (BRE and the passive solar programme), research schemes with higher education institutions (research council programmes and Partners in Innovation-PII), and subsidised consultancy (the Energy Design Advice Scheme). In addition to these, the industry has been attempting to adhere to the recommendations outlined in Sir John Egan’s, ‘Rethinking construction’ (Report of the construction task force 1998). Chartered Institute of Building Services Engineers – National conference 2001 2 AMEC has acknowledged the necessity of innovation for some time and has endeavoured to deliver this through collaboration with external partners from academia and research contractors (BRE, CIRIA, BSRIA et al) and internally, through incremental improvement over time and the development and application of products arising from research. This commitment, which has been group wide, has had a local focus, with the objective being to satisfy local needs. For example, Capital Projects Construction, whose interest has focused on the pre-construction phase of the project process, has developed: improved approaches to collaborative conceptual design, briefing IT tools and associated models, scheme, detail and production information models, and the ADePT methodology and associated software. Whereas Process and Energy, operating within the energy/off-shore market, has lead the field with the introduction of the CRINE initiative, an innovation driven by the need to reduce costs in order to remain competitive in a diminishing marketplace. Although AMEC is practising innovation, the fact that it is focused in independent offices has resulted in other sections of the business being unaware of what is going on, where. This is compounded by the fact that the wider operation comprises some 50,000 employees in a global network of offices. Given the size and complexity of the business there can be little doubt that innovative approaches developed and utilised within specific offices could provide key learning applicable within other sectors of the operation. In order to address this issue the process of co-ordinating R&D investment across the entire organisation is being addressed in a bid to promote the cross-fertilisation of ideas, both old and new, throughout the business. What is commonplace in one market becomes innovative when applied to another. Thus, by having a full knowledge of the group R&D investment and activity it will be possible to transfer/spread innovation and knowledge between sectors of the business to ensure cross-fertilisation and universal benefit from innovative practices. However, diffusing any form of information or knowledge within a social network is not an easy task, as innovation invariably introduces change – an occurrence which individuals have a tendency to resist. This is further compounded owing to the majority of construction industry organisations lacking any ingrained culture of innovation, which is a prerequisite to developing an affinity for innovation and its acceptance. Thus, in response to this a structured workshop has been developed, one of a portfolio of events, that provides a mechanism with which to address these issues concurrently. The remainder of this paper will: i) elaborate on the difficulties associated with diffusion and change management; ii) outline the portfolio of events and their aims; iii) describe one of these events, the ‘innovation workshop’ in detail; and iv) define the benefits this offers in generating a culture of innovation. Diffusion and the management of change Although Egan’s ‘Rethinking Construction’ has motivated the industry to innovate as part of ‘business as usual’, it makes little reference to how innovations, once derived, should be promoted and, more importantly, spread within the industry. This spreading, which is commonly known as diffusion, is the process by which an innovation is communicated via the passing of messages between members of a social system over time (Brown 1981). The effectiveness of the diffusion process relies upon a complex web of negotiations within a vast social network. Most innovations diffuse at a surprisingly slow rate and typically require a lengthy period from the time they are made available to the time when they are widely utilised (Rogers 1995). As has been stated previously, this owes much to the fact that innovation leads to change (Hagedoorn 1989) and change can be interpreted as a negative development to the ‘status Quo’ if not managed correctly. Bearing this in mind, getting an ‘idea’ or a ‘product’ across to those who will be utilising it requires far more than describing the problems it is intended to address and how it should be applied in practice. The successful introduction of an innovation depends upon the manner in which it is introduced and the way in which the change it will introduce is managed. Unless the right personnel, with the appropriate skills, are appointed to ensure the change is controlled and managed efficiently the potential benefits that innovation can provide will never be realised. The diffusion process is dependent on two other key issues: the organisation’s functional breakdown and the spatial dispersion of its offices. The functional breakdown reflects decisions made by different aggregations of individuals, while spatial dispersion reflects manifestations of these decisions as they may be observed within geographically dispersed offices of a single organisation as opposed to a single office environment (Brown 1981). This latter issue is of great importance in a global organisation as differences in office culture and practice require different approaches to diffusing ideas. It is important to identify appropriate channels into, and mechanisms to gather and distribute innovation from, each office in a Chartered Institute of Building Services Engineers – National conference 2001 3 manner that can be adapted to meet their individual needs and underlying cultures. In doing this the change manager must aim to create an environment in which: • Unplanned creative ideas are received with an open mind and are not rejected out of hand because they do not accord with current plans or conventional practice. • Creative solutions within ongoing projects are encouraged, particularly in the early stages when exhaustive searches should be made to ensure that the subsequent investment of time and effort is well placed. Only by developing a change management strategy that introduces this will resistance to change be diminished, enabling future innovation to be accepted more readily, thus improving the effectiveness of the organisation to adapt to innovation. Workshops for organisational development A key element of the change management strategy is the introduction of orchestrated training events. AMEC has designed a portfolio of workshops aimed at developing the organisation and its people from a number of perspectives. These events have been developed to ensure that those engaged in adopting new methods of work can acquire the new, or develop existing, knowledge and skills required to work within the new conditions. Additionally, these workshops enable negotiation to be undertaken regarding the need for organisational development and the benefits that change may offer. In this respect, the individuals involved have more affinity with, and ownership of, the changes that have been introduced. Four core training events are utilised to promote organisational development: i) team building exercises (a specific application of which is described in Steele and Murray, 2000); ii) interdisciplinary workshops (see Steele et al, 2001 for details); iii) training courses in specific skills; and iv) Innovation workshops. The last of these was developed in recognition of AMEC’s need to consolidate its understanding of investment in innovation and, more specifically, R&D focus across the group. There were a number of reasons for this, the most germane being to: • Find out what innovation and R&D is being undertaken across the business; • Communicate it internally within the group to ensure effective dissemination and diffusion; and • Communicate the key aspects of this innovation to customers and markets. The primary objective of these events is to uncover existing and ongoing innovation and R&D from across the organisation, and develop a focus for future investment. They also aim to enable individuals from within the organisation to expand their understanding of innovation and develop a willingness to become more innovative in their everyday working practices, while learning about existing innovation and R&D that may have potential application within their individual sectors of the business. The innovation workshop was developed in a bid to help achieve this. The Innovation workshop Who to involve It is generally accepted that the likelihood of an innovation being adopted by a larger population is increased if it is first utilised by a smaller group of ‘opinion leaders’ (Rothman et al 1976). Thus, typically, the successful diffusion of an innovation within an organisation describes a three-step process: development or unearthing of innovation; gaining uptake by early adopters and opinion leaders; and subsequent adoption by a larger population or system. Potential adopters of innovation have been categorised into five groups: Innovators, early adopters, early majority, late majority, and laggards (detailed descriptions of each are provided elsewhere Steele and Murray 2001). A typical organisation contains a mix of these adopter types that are distributed as shown in figure 1. Chartered Institute of Building Services Engineers – National conference 2001 4 Figure 1 Adopted categorisation on the basis of innovativeness (Rogers 1995) This division provides the basis for defining who should be involved in front-end events aimed at unearthing, developing and diffusing innovation within an organisation. This is due to the fact that the innovators and early adopters are generally those who know of localised on-going innovation, as well as being the ones who are most likely to embrace innovation that they are made aware of. Thus, by holding workshops that involve these individuals it is possible to perform local audits of innovation while diffusing innovation from other sectors of the business. There is anecdotal evidence that this differentiation between adopter types has already been recognised within the business and used, in one application, as a means of understanding the performance of the subelements of the supplier network. A design and construction team working for a large pharmaceutical client adopted a range of innovations to deliver exceptional performance. However, there were noticeable differences between individual elements of the team. In order to differentiate between these sub-elements the performance of the team was post-rationalised and three types of players in the supply network for the project were identified: • Leaders searching for ways to do it better on the presumption that they can make it work commercially • Laggers sceptical but prepared to be convinced, will learn to join the leaders • Losers not prepared to change and as such, will not be considered for the next project Although the granularity of classification is different, the concept of adopter categories is the same and, in this case, served as a mechanism with which to identify a more innovative team for the next project, thus enabling improvement through learning. Structure of the event The workshops involve a mixture of engineers, heads of department and directors from a diverse range of disciplines. The participants are encouraged to explore the meaning of innovation from their individual and functional perspectives in a bid to crystallise a shared understanding of the term and its ethos within the business. The second named author chairs and facilitates the events while the first named author captures the exploration using a technique called ‘mind-mapping’ (Buzan 1995). The event is structured around a pre-defined agenda, comprising a set of questions for discussion (described below), that has been created to be flexible and adaptable to give the proceedings some direction whilst still ensuring that the participants are free to explore concepts as they arise. To ensure that the attendees retain focus, at the mid-point in the workshop a film clip, taken from the film ‘Apollo 13’, is played. This not only offers a short break from proceedings, but also provides a wonderful example of innovation under crisis conditions. The facilitator opens proceedings by providing a brief synopsis of the aims and objectives of the event. The agenda is then utilised as a guidance mechanism to highlight the discussion points outlined below. What is innovation? This does not involve defining the term innovation nor does it discuss the concept of innovation within an organisational context, it merely serves to reinforce the exploratory nature of the workshop and encourage Innovators =2.5% Early adopters =13.5% Early majority =34% Late majority =34% Laggards =16% _ x – 2sd _ x – sd _ x _ x + sd Chartered Institute of Building Services Engineers – National conference 2001 5 participants to investigate and develop their own understanding of the term. Typically, innovation and invention are used interchangeably. This owes much to the fact that they are inherently interconnected in that innovators focus on the benefits that inventions provide in order for people to value them sufficiently to become participants in the innovation process – to be willing to change (Rouse 1992). Yet innovation is the introduction of change via something new, whereas invention is the creation of a new device or process. In this respect an innovation takes advantage of an invention, but an invention is not an innovation (Steele and Murray 2001). This dichotomy, which is very important, is commonly recognised and agreed upon by attendees early in proceedings. What do we currently do? This period of the workshop enables the attendees to describe and elaborate upon the practices, products and processes that they believe to be innovative and worthy of wider uptake. This is undertaken by collating these recommendations and mapping them, at high level, against a framework that is recognised, universally, across the organisation – the AMEC Project Process (see Vickery and Waskett 1999 for details). It is acknowledged that the majority of innovations will always be adapted to some degree when transferred from one situation to another. Thus, it is ideas and concepts that are communicated rather than full prescriptions for practice. To ensure this, the introduction of innovations from ‘other’ sectors of the business is supported with descriptions of how, where and why they have been applied beneficially elsewhere. This inclusion of context, which is critical when transferring innovations between operational centres of a business, is also important when conveying innovation within a single office, as amendments to working practice arising from the implementation of an innovation must be recognised, translated and managed to meet the needs of the new environment. Relating this to a common framework ensures that all sectors of the organisation can understand how the innovation sits within their existing practice. What else should we be doing? This element of the workshop enables the attendees to identify and direct future innovation opportunities. Having identified what is currently seen as being innovative, whether that is external research investment, working party initiatives, or isolated examples of innovation in practice, the attendees are encouraged to identify new areas of focus. This is achieved by undertaking an analysis of the existing innovation mapping exercise and identifying gaps. This ‘gap analysis’ is followed by a discussion aimed at capturing the thoughts and recommendations of the participants of how these gaps should be filled. This exercise enables areas of potential future investment and exploration to be identified, captured, mapped in relation to existing innovation, and represented in relation to a generic model. An example of this, which relates to external research investment in process improvement specifically, is shown in figure 2. What are the interfaces? The mapping exercise, in addition to highlighting current and future research focus, serves to identify the key interfaces between areas of innovative practice. Traditionally, within large organisations, it has been difficult to monitor and manage investment in R&D and Innovation on a single platform owing to it being instigated by individual units and operational centres from across many business streams. Consequently, opportunities to align innovation in order to deliver a global strategy for investment have been missed. Within the Innovation workshops, the mapping exercise enables the attendees to understand the connections between elements of innovative practice, thus enabling the innovation team to align the interfaces to gain best advantage from synergy within the investment. Additionally, the participants gain an understanding of how the innovation from other sectors of the business can be aligned with their local needs and integrated into their current working practices. Do we have an environment for innovation? The innovation workshops in general are assisting in the development of a culture of innovation. The attendees to date have highlighted that, in order for the business to evolve and develop an environment for innovation, it has to either attract the right calibre of employee, or introduce mechanisms to develop the abilities of the existing staff. Moreover, it has become apparent that whichever of these mechanisms generates the innovative organisation, it is imperative that it retains these individuals. Chartered Institute of Building Services Engineers – National conference 2001 6 Figure 2 Process-based R&D investment mapped onto the AMEC Project Process Briefing IT tools Briefing process Brief and values Conceptual design process Web-based conceptual design support conceptual design framework Improved collaborative conceptual design Design plans and programmes