Don't leave innovation to R&D, manufacturing warned
More innovative ideas come from rank-and-file manufacturing employees than R&D departments, but these are in danger of being overlooked, according to a new report from PA Consulting.
The report, Innovation As Unusual, suggests that UK businesses are losing out on £64.7bn through lack of innovation. PA Consulting examined eight sectors in the UK, ranking them by a number of factors that determined how each performed as an innovation leader. The Consumer Products and Manufacturing sector ranked third – behind Life Sciences and Financial Services, but ahead of IT.
One of the key findings for the sector was that 38 percent of respondents said some of their best ideas originated amongst employees, higher than R&D teams (32 percent).
In its analysis of the manufacturing and consumer products sector, PA Consulting identifies a number of other factors inhibiting innovation in the sector. These include:
· Insufficient entrepreneurial thinking: only 44 percent of respondents are strong on entrepreneurial thinking, compared to 76 percent in IT and technology and 69 percent in life sciences. People are unwilling to explore new ways of approaching the market.
· Underplaying digital: while many (74 percent) say digital is helping them become faster and more efficient, far fewer (58 percent) are using digital to disrupt or lead their sector.
· Tight on costs: 38 percent of respondents say they have seen a brilliant idea fail because there was insufficient resource to make it happen.
· Lack of internal co-ordination and management support: 24 percent of respondents say lack of co-ordination between production, sales, marketing and other internal departments quashes brilliant ideas. A similar number (22 percent) blame lack of management support for failure of innovation.
As well as encouraging manufacturing firms to include a wider range of employees in the innovative process the team at PA Consulting also recommends:
· Think of deeper ways of understanding customers: product innovation is built around understanding customer needs. Sometimes a focus group or opinion poll is not enough for this. Think about using knowledge from social sciences, such as psychology and anthropology.
· Test cheaply: often companies do not take a product to pilot test stage because they think it will be too expensive. It doesn’t have to be. Think of ways to pilot parsimoniously.
· Develop digital disruptively: digital is mainly being used to improve efficiencies. Product development teams needs to take greater ownership of digital strategies to take market leading positions.
Tim Lawrence, head of manufacturing at PA Consulting Group, comments: “The best innovators are those that ensure it is a shared effort across their organisation rather than leaving the development of new ideas to siloed teams. Too many organisations continue to view innovation as the responsibility of the R&D department, which severely limits their ability to identify and develop breakthrough ideas with the potential to transform their industry.
“By branching out and involving more employees in the innovation process, manufacturing companies will have a broader pool of knowledge and experience to draw upon, which will help them to harness innovative ideas and better understand customer needs.”
The report also cautions about the risks of buying in innovation – common in the pharmaceutical sector – as it only works if the acquired business is placed within a culture that understands and actively nurtures innovation. Without this culture, the host organisation can quash the newly acquired capability and waste its investment.
GfK and VMware: Innovating together on hybrid cloud
GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.
In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade.
“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.
Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.
By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.
One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.
“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.
Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs.
“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.
The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment.
The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.
One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.
“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.
“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client.
“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”