‘Innovation’ can be defined as the ability to identify and develop ways of improving products and services. Traditionally, the emphasis has been on technology and product development along with cost savings. Now, with a knowledge-based economy, the focus is shifting to innovation in the ways of acquiring, sharing and refining knowledge so that it can be exploited commercially.
That knowledge involves workplace organisation, structure and process as well as the science and technology underlying products and services. A wide range of structures, processes and techniques have been tried over the last fifty years as industry and commerce have advanced from a basic focus on the production line approach.
Before the advent of specialisation and production line systems, most production was craft based, with total product ownership by the craftsman. The later specialised (or so-called ‘scientific’) approach to manufacturing disconnected most of the workforce from the finished product and the customer – the concept of ‘product ownership’ was devalued, and the concept of quality was reduced to compliance with a set of measurements. There was a disconnect between workforce and outcome.
The ‘scientific’ approach came under widespread pressure from market demands, shorter product life-cycles and workforce expectations; this was amplified by the increasing complexity and pervasiveness of technology. Emerging automated, flexible production lines and new business models were demanding new structures and processes.
Innovation in the workplace needs human creativity
To have any chance of sustainable business success, companies have to innovate. That embraces both technology and process. The people who best understand a company’s processes are the workforce themselves, and process innovation should start there.
This links innovation to quality through workforce ownership of process. The workforce has a vested interest in the process outcomes, way beyond the immediate so-called measures of ‘quality’ such as process compliance or adherence to a specification (these are little more than measures of standardisation).
Innovation through a bottom-up approach of integrated task setting
A group of employees of the Dutch Tax and Customs Administration proved that the bottom rungs of an organisation could bring about innovation. Nationwide, it employs 30,000 people, operating in 13 different tax regions and has several offices in each region. The initiative started when a group of employees wanted to improve the division of tasks in their unit. They developed an alternative way for organising their work, which improved efficiency. With the support of the director general, the model has been implemented in several offices across the country.
Innovation through self-managing team models
In 1978, a severe crisis hit Volvo Cars in Ghent, Belgium. Industrial relations were strained by mutual distrust and conflict. A consensus model was developed that bridged the trade unions and the management at the plant. This was a decisive factor that led to the innovation of the structure of working. They called it “The Power of We,” founded on the belief that people are the key to success. They focused on the trust, development and co-operation of human relations as the key to their operational excellence.
Innovation through a complex merger
Hera, in Italy, provides diverse multi-service utilities related to energy resources, water cycling, and environmental services management. Fifteen public service utilities were merged to set up Hera in 2002. A diverse array of industrial relations agreements and a complex inherited legacy made operations difficult. Hera is now trying to become a more homogeneous organisation with a single structure and culture. It is facilitating innovative work changes to build on a new model of social dialogue.
These three examples of innovation span a range of process innovation stimuli – from bottom-up to crisis-driven. They demonstrate the potential of structure change and process ownership by stakeholders (and especially the workforce), and how it can improve quality through joint ownership of the outcomes – the basis on which real quality is founded.