Innovative Organisations: Mohawk Industry - Case Study Example

Innovative Organisations: Mohawk Industry Innovation: An overview Innovation is an unavoidable concept to those who wish to develop and maintain a competitive edge (Brown and Eisenhardt 1995). It allows organisations to cope and adapt with new and emerging technologies and use it to their advantage (Christensen 1997). It also increases the probability of surviving of an organisation, growing and leading (Cefis and Marsili 2006; Jung, Chow, and Wu 2003). About 43% of innovation-related researches focus on product innovation. Moreover, a variety of literatures related to internal factors that drive innovations in organisations are available. A study by Becheikh, Landry and Amara (2006), established these driving forces and categorized them into: characteristics of the organisation; global strategies; organisational structure; control activities; organisational culture; team management; and, functional assets and strategies. The size of an organisation has a direct and positive relationship with innovation (Schumpeter 1942). Moreover, studies have shown that large organisation have more resources for innovation and are more risky in supporting innovative strategies (Damanpour 1992; Tsai 2001). In terms of age, studies also showed that it has direct and positive relationship with innovation since older organisations have more experiences that they can use in innovative programmes and activities (Sorensen and Stuart 2000). Contextual factors such as the industry to which the organisation belongs, location, knowledge and awareness, and public and governmental policies, also affect innovation. The type of industry, whether supplier dominated, scale intensive or specialized suppliers, determine the level of innovation (Pavitt 1984; Becheikh, Landry and Amara 2006). Moreover, organisations that adapt and convert knowledge and awareness have higher levels of innovation (Becheikh et al 2006). Governmental policies and financial support whether grants subsidies, awards or loans also showed to have a direct and positive relationship with innovation (Coombs and Tomlinson 1998; Souitaris 2001). Innovators also demonstrate characteristics such as being risk takers and openness to changes. They also possess social characteristics such as social mobility and a strong pursuit and orientation towards information (Rogers, 1983; Cramer and Reijenga 1999). Organisational innovation is the production of useful and new products and services thru the creativity of people within its organisation (Woodman, Sawyer, and Griffin 2003). This is enhanced by motivating and stimulating its organisational members’ intellect (Elkins and Keller 2003). Successful organisational innovation consists of as leader that motivates it members to exceed and transcend the standards in performance levels, and challenges them to accept and improve innovative activities (Mumford, Scott, Gaddis, and Strange 2002). Moreover, it also consists of members that demonstrate enthusiasm in innovation. Creative employees and members can contribute to innovation by suggesting new ideas and becoming role models to their other co-workers (Shalley and Gibson 2004). A study by Damanpour and Wischnevsky (2006) evaluated the differences between innovation-generating organisations (IGO) and innovation-adopting organisation (IAO). It was shown that innovation-generating organisations rely on knowledge and market capabilities in innovation while innovation-adopting organisation use a managerial and organisational approach to innovation. The study divided the differences into seven categories: definition, phases of innovation, critical innovation use, role of innovation as an end or means, managerial challenge, critical success factors (CSF), and research focus. In terms of definition, IGOs define innovation as a product or process created by the organisation to improve its competitiveness while for IAOs, innovation is defined as a system used by the organisation to improve its competitiveness. For IGOs, phases of innovation consists of recognising the opportunity, testing, marketing and distribution while for IAOs, innovative phases consists of recognising the need for improvement, evaluation, implementation and maintenance. Critical innovation issues for IGOs are focused on managing activities and programmes that create new products and processes while for IAOs, these are focused on managing the assimilation of innovative programmes. For IGOs, innovation is an end, while for IAOs innovation serves as a means. In terms of CSFs, innovation is the only factor of success for IGOs while for IAOs, innovation is a primary factor, but it does not necessarily mean that it is the only factor (Damanpour and Wischnevsky, 2006). Mohawk Industry: History, Challenges and Success Mohawk Industry is one of the leading companies worldwide when it comes to innovative recycling in the floor covering industry, and 27% of the carpet market in the United States (Sullivan 2007). They produce products ranging from carpets, ceramic tile, wood, stone, laminate, and vinyl rugs both for home and commercial use. They have been able to produce 100% recycled products without compromising quality, and more than 500 of their products contain recycled materials. Their innovation is based on the saying that a man’s trash can be another man’s treasure (www.mohawkgreenworks.com 2009). In Mohawk, waste products are categorized into pre-consumer, post-consumer and ReCover. Pre-consumer waste products include yarn, fiber, backing material, shrink-wrap, cardboard and pallets. Post-consumer waste products include PET bottles, tires, auto glass, bottle caps and labels, shrink-wrap, fibers, post-consumer carpets and latex. ReCover waste products are old carpets produced by Mohawk or other industries. All these materials are recycled into new materials that aid Mohawk in reducing the amount of their waste products and decrease the demand and use of new materials (www.mohawkgreenworks.com 2009). Their innovative approach on waste products started as early as 1999 when they built the largest PET bottle recycling facility in Summerville, Georgia. Thirty percent of PET bottles are being recycled in America and about 25% of these are being recycled in this facility which totals to 215 million pounds in a year. This material is melted into a polyester resin and cut into strips to make PET carpet fiber. Bottle caps and labels are used and turned into plastic carpet cores. Aside from PET bottles, they also use about 30 million pounds of tires and turn it into door mats, which makes them the leading and largest tire recycler in the floor cover industry (www.mohawkgreenworks.com 2009). Greenworks Center in Chatsworth, Georgia is another recycling facility of Mohawk industry that focuses on reusing old carpets and converts it into carpet cores. Carpet cores are made up of cardboards that are used when transporting carpets. Production of carpet cores from recycled materials reduces the demand and usage of trees (www.mohawkgreenworks.com 2009). The innovative approach stated has been demonstrated and implemented by other companies in the floor covering industry but they still rely on fuel in their production process. Mohawk, on the other hand, together with Tate and Lyle, a firm that specializes in turning food to fuel, uses corn sugar derived petroleum in their production process (Stewart 2007). Aside from using biofuel, they also look into other alternatives that do not emit greenhouse gases and other acid rain precursors (www.mohawkgreenworks.com 2009). Aside from the fuels they used, they use proper water and natural gas management. By installing their own water treatment in their facilities instead of using the city’s water treatment, they were able to reduce their water consumption by half since 1995-2003 (www.mohawkgreenworks.com 2009). Because of their support and efforts in environmental awareness and stewardship, they have been awarded the Innovation award in 2006. Wal-Mart, during its Inaugural Vendor Award for Sustainability, also recognised the green efforts of Mohawk Industry in 2008. And recently, they also won the GPEC 2009 Recycling Award from the Society of Plastic Engineers during the Global Plastics Environmental Conference for creating innovative means for recycling (www.mohawkgreenworks, 2009). According to Jeffrey Lorberbaum, Mohawk’s CEO, its easy to say that one is green, but is not easy to actually be green. One of the challenges they faced is informing and teaching their employees to support the same advocacy and promote the recycled products in the market. In being innovative, they also encouraged their employees to use information about the recycling process that they used in the carpet production in their sales campaign. They also used Learning Management System (LMS), an approach that educates employees about innovation in Mohawk and includes a test ranging from 10-20 questions to evaluate what they have learned. Every time the company initiates a new process or product, they inform their employees in meetings. Moreover, they provide training activities for carpet retailers with the same quality and quantity information that they provide to their sales representatives to ensure accuracy and consistency. The industry also shares their knowledge and awareness on environmental sustainability, stewardship and other environmental issues to children to educate them on the importance of recycling and reducing waste products. This approach makes their employees proud and feel good about the product they are selling and the process that they use (Weinstein 2008). During world earth day, they even shared ten tips on how to make a green home which includes choosing products that contain recycled materials, and choosing hardwoods that contain low VOCs or volatile organic compounds (Anynomous 2009). At a community level, they also developed and supported a variety of projects and activities like Easter Seals, Komen for the Cure, United Way, GED Education and Volunteer Programmes. Easter Seals is a programme that focuses on providing employment to mentally and physically disabled persons. Komen for a Cure is a programme where Mohawk donates 25 cents in every square yard of carpet sold. The amount collected is donated to Susan Komen’s foundation for fighting breast cancer. United Way is one of America’s largest charity institutions. GED education focuses on the advancement of their members and employees intellectually and passing the GED exam. The Volunteer Programmes are Mohawk’s way of promoting and encouraging their members and employees to serve their local communities. They do this by giving them paid time offs. The said programmes only show that their stewardship and leadership goes beyond their facilities and products, they reach out to communities as well (www.mohawkgreenworks 2009). Discussion From the description and characteristics mentioned above, it can be said the Mohawk industry is an innovation-generating organisation. They generate their own creative ideas that can be used to produce new and useful products. They demonstrated this by creating products that is made of recycled material. They also demonstrated the innovation phases mentioned by Damanpour and Wischnevsky (2006). They recognise the need to reduce the amount of waste materials by converting trash into reusable products. Moreover, they test these recycled products to ensure that the quality is not compromised by using waste materials instead of raw materials and distributing these commercially. Due to its high efficiency level in recycling used carpets, it makes a carpet-free landfill feasible. The type of industry also played a vital role in the innovation of Mohawk. Since they belong to the flooring industry, a type of specialized supplier, it requires that they continually innovate to consistently address the public’s demands. It also helped the organisation to cope with the dynamic and fluid environment of the flooring industry. Being innovative allows them to have an edge over others and stay on top of the ladder. Their leaders also demonstrate openness to change. Ever since the implementation of environmental policies by the government, they began looking for ways to meet the required standards of environmentally friendly products. They did not stop from there, they transcend it by recycling in all aspects of their organisation. They use materials and products that have already reached the end of their life cycles such as PET bottles, tires, auto glass, bottle caps and labels, post-consumer carpet and latex. These materials or waste products are those discarded and generally would have been thrown in landfills but instead was used in producing new carpet backings, nylon resins and other usable products. They also demonstrated innovation in the process of producing their products by using corn sugar derived petroleum that allowed them to save fuel in their production process. Using corn sugar derived petroleum is the most innovative process used by Mohawk Industry not only because they are the first to use this process but because it showed that they are not contented with merely meeting environmental requirements. Since they are leaders in floor industry innovation, they are faced with challenges which include informing their employees and members on the importance of recycling and waste management. They addressed the challenge by educating their members through meetings and product shows. A test is also administered at the end of the meetings and trainings to ensure that they learned something at the end of the day. They encourage their sales representatives to include recycling information during sales briefings and they also inform the retailers of their efforts on reducing waste and preserving the environment. They also faced the challenge of making the consumers support and use recycled products. They addressed the challenge by making sure that their products are of high quality despite containing recycled materials. They also conveyed that by buying recycled products, consumers are getting their money’s worth and at the same time helping the environment. In addition, they also inform them of the benefits of having environmental friendly products. They are also risk takers. They are one of the few who first began to use PET bottles in carpets. They also used bottle caps and labels in making core carpets so recycling is incorporated not only in their commercial products, but in materials used in the transportation of the carpets, as well. Another characteristic demonstrated by Mohawk is social mobility and orientation towards information. They partner with other groups that can help them formulate new ideas and processes that will take them one step further on recycling and environmental stewardship. They constantly look for other ways of improving the level of performance in terms of recycling and continually replace the materials and resources that were consumed in their production. As they continue to grow, they strive to be more innovative by using other waste materials like tires and converted it into door mats, and they even have the ReCover programme where they promote recycling old carpets. The programme allows customers to call the organisation to donate their old carpets, and Mohawk will take care of the rest. They collect, transport, and recycle these carpets themselves, even carpets manufactured by other companies. They are not content with being environmental friendly in their organisation and facilities; they also encourage people to be green in their own way. Most importantly, they encourage their employees and members to become active in environmental causes, starting from their working environment and bringing it into their own home and community. They even compensate their employees for time spent in participating in volunteer activities in their own communities. Mohawk’s success in the floor industry in terms of waste management and recycling is due to their innovation and creativity in producing quality products that are environmentally friendly. Innovations that are promoted by their committed leaders in word and in deed, that continually strive and encourage others to follow their advocates in preserving our natural resources and return more than what we consumed, thrive. With this phenomenal success, perhaps the greatest challenge that they will face is surpassing and challenging their own in producing a more efficient processes that will produce environmentally friendly products and reducing waste materials more than what they are achieving at the moment, if not completely eliminate the concept of waste in the floor covering industry. References Anonymous, 2006, Taking advantage of technology, Textile World, July-August, p. 60. Anonymous, 2008, Mohawk given thumbs up by Wal-Mart for green efforts, National Floor Trends, 10 July, p. 41. Anonymous, 2009, Mohawk’s 10 tips to green your home, PR Newswire, 2 April, p. 1. Becheikh, N, Landry, R, and Amara, N, 2006, Lessons from innovation empirical studies in the manufacturing sector: A systematic review of the literature form 1993-2003, Technovation, vol. 26, pp. 644-664. Brown, S and Eisenhardt, K, 1995, Product development: Past research, present finding, and future direction, Academy of management review, vol. 20, no.2, pp. 343-375. Cefis, E and Marsili, C, 2006, Survivor: The role of innovation in firm’s survival, Research policy, vol. 35, no. 5, pp. 626-641. Cramer, J, and Reijenga, F, 1999, The role of innovators in the introduction of preventive environmental policy in local government, Journal of cleaner production, vol. 7, pp. 263-269. Christensen, M, 1997, The innovator’s dilemma, Harpers Press, New York. Coombs, R, and Tomlinson, M, 1998, Patterns in UK company innovation styles: New evidence from the CBI innovation trends survey, Technology analysis and strategy management, vol. 10, no. 3, pp. 295-310. Damanpour, F, 1992, Organization size and innovation, Organisational Studies, vol. 13, no. 3, pp. 375-402. Damanpour, F, and Wischnevsky, D, 2006, Research on innovation in organisations: Distiguishing innovatin-generating from innovation-adopting organisations, Journal of engineering technology management, vol. 23, pp.269-391. Elkins, T, and Keller, R, 2003, Leadership in research and development organisations: A literature review and conceptual framework, Leadership Quarterly, vol. 14, pp. 587-606. Jung, D, Chow, C, and Wu, A, 2003, The role of transformational leadership in enhancing organisational innovation: Hypotheses and some preliminary findings, Leadership Quarterly, vol. 14, no. 4-5, pp. 525-544. Mumford, M, Scott, G, Gaddis, B, and Strange, J, 2002, Leading creative people: Orchestrating expertise and relationships, Leadership Quarterly, vol. 13, no. 6, pp. 705-750. PAvitt, K, 1984, Sectoral patterns of technical change: Towards a taxonomy and a theory, Research Policy, vol. 13, pp. 343-373. Rogers, E, 1983, Diffusion of innovations (3rd ed.) The Free Press, New York. Schumpeter, J, 1934, The theory of economic development, Harvard University Press, Cambridge. Shalley, C, and Gibson, L, 2004, What leaders need to know: A review of social and contextual factors that can foster or hinder creativity, Leadership Quarterly, vol. 15, no. 1, pp. 33-53. Sorensen, J, and Stuart, T, 2000, Aging, obsolescence, and organisational innovation, Administrative Science Quarterly, vol. 45, pp. 81-112. Soutaris, V, 2001, External communication determinants of innovation in the context of anewly industrialized country: A comparison of objective and perceptual results from Greece, Technovation, vol. 21, pp. 25-34. Stewart, A 2007, Mohawk changes the oil, National Floor Trends, 9 August, p. 8. Sullivan ,T, 2007, Roll out the green carpet!, Barron’s, 5 Feb., p. 26. Tsai, W, 2001, Knowledge transfer in intraorganisational networks: Effects of network position and absorptive capacity on business unit innovation and performance, Academy of Management Journal, vol. 44, pp. 996-1004. Weinstein, M, 2008, It’s not easy being green, Training, March/April, p. 20. Woodman, R, Sawyer, J, and Griffin, R, 1993, Toward a theory of organisational creativity, Academy of Management Review, vol. 18, no. 2, pp. 293-321. Read More