Adidas Company Innovation - Case Study Example

Adidas Company Name: Course: Tutor: Institution: Date: Introduction This report is a critical evaluation of how entrepreneurial innovation serves as an organisational driving force and a sustainable competitive edge in the highly competitive and dynamic market. In this regard, the report explores how such innovations are used to create sustainability, and why they are hard for organsiational competitors to overcome and imitate respectively. In particular, the study applies the Adidas Company case study. The organisation is a lead market player in the sports apparel industry, where it has emerged as a world well recognised brand. Although the market has key and influential competitors such as Puma and Nike, the company has successfully weathered through the competition to create a market reputation and competitiveness (Adidas Company, 2016). This report explores how Adidas Company has applied innovation as a key component for its market competitiveness strategy. Moreover, it evaluates alternative approaches through which the barriers to emulate the company innovation Organisation Innovation The greatest innovation for the Adidas Company was in 2014 when it developed a program to include its employees directly in the formulation of new business designs and products. This is an approach diverse form other industry players. In this case, rather than just developing employee new product development teams as it the custom, the organisation established the Adidas Group Innovation Academy (AGIA) (Phelps, 2016). The academy offers training and to the employees on the changing global market conditions. Upon completion, the employees are required to develop one business ideas of which the ideas are vetted and ranked based on merit to establish the most viable business idea. This is accredited to the revolutionary business ideas and new products developed by the Adidas Group Company such as the Avenue A initiative that is a three months subscription service exclusively for the female customer base in the global market. Through this initiative the company has innovatively developed a strategic market base for its customers (Adidas Company, 2016). In this case, through the process, the organisation has innovatively overcome the competition to counter the rising market competition from key players such as Puma and Nike among others. Lessons Learnt Based on the Adidas case study for innovation, this analysis has a number of lessons learnt. First, a transformative leadership is critical in supporting an innovation culture. In this case, a background analysis of the current innovation strategies by the company are all based on the recruitment of its current CEO Mark King. In this case, the organisational transformational leadership allowed for the formulation of anew culture (Roberts, 2016). This is what transformed into the development of the company new innovation culture and employee inclusion in the process. This is in relation and congruent to Moynihan, Pandey and Wright (2012, p.146) transformational theory. In this case, the theory asserted that through its application, it supports employee motivation. This is an argument that was later supported by Garcia-Morales, Jimenez-Barrionuevo and Gutierrez-Gutierrez (2012, p.1044) study. The study evaluated the impact of organsiational transformational leadership on the development of a new culture. As such, it concluded that organisations that applied this leadership approach were more responsive to the changing market needs. Thus, the main learnt lesson in this is that a transformative leadership is the foundation pillar to the development and growth of an innovative culture in any organisation. The second learnt lesson is the need for employee development and empowerment. In this regard, a critical focus of the Adidas Company illustrates that its success is as a result of empowering the employees to formulate and develop new ideas and innovative products in the market. In this case, this is in relation to a number of theories ad arguments on employee empowerment and development in the market. On one hand, Men and Stacks (2013, p.174) argued that there exists a direct relationship between employee empowerment and the development of an innovative organisational culture. This is an argument that was validated by Choi, Jang, Park and Lee (2014, p.207) study. The study established that organisations that applied the employee empowerment programs registered higher performance and innovativeness that other peer organisations in the market. Reason For success The adoption of the learnt lessons have enabled the venture succeed in the sports apparel industry. This is because; it has curved a new market niche and approaches that is contrary to the existing business models. For instance, The Nike Company, which is a key market competitor, applies the outsourcing strategy. In this case, rather than manufacturing and designing it ideas and products internally, the organisation uses the external outsourced partners (Peterson, 2014). In this case, this has allowed the Adidas Company acquire a competitive edge in the development of an innovative culture that is hard for the competition to emulate. In this context, the in house innovative process reduces the Adidas company ne ideas and innovation costs, increasing its market profitability levels in the long run period. Why it is hard to emulate the Innovation The developed Adidas Company innovation to harnessing the employees’ skills and talents is a sustainable competitive edge. As Kapoor, Pachouri and Panwar (2011, P.27) described it, this is an organisational competitive edge that it hard for the competition to emulate with the offered capabilities and resources in the market. On one hand, the developed innovation edge is based on intangible assets the employee talents and learning development. As such, in order for any organisation to emulate the innovation, it would require both financial assets to develop an employee training centre. Moreover, this would require a development of the intangible assets in HR to nurture an employee talent and create an environment and culture that supports such an innovation culture. As Jones, Latham and Betta (2013, p.1631) noted, to change and develop a new employee culture, is a long term initiative that cannot be achieved in the short term period. Thus, this means that it would require much financial investments as well as intangible assets development to emulate the existing Adidas Company innovation culture. Recommendations In order to overcome the current challenges, this analysis recommends a series of approaches that he market competition can overcome the challenges posed in overcoming the innovation Adidas Company innovation culture. Develop an Employee Learning Culture The first step to develop and overcome the challenge is the formulation of an organisational learning culture. As Argote (2012, p.83) noted, a learning organisation is one that creates an opportunity for the employees to learn and develop their skills and careers on a continuous basis. Through this strategic approach, the organisations ensure that the development and nurturing of the employee talents is a continuous process in the long run period. To this effect, the rolling out of a learning culture approach creates a series of advantages. The first is employee talents development. The second is reduced employee turnover. Schmeck (2013, p.84) argued that in a learning organisation culture, there is reduced employee turnover. This is because the existing system creates an opportunity and avenue for employee to explore on their talents and expand their skills, an avenue that increases the organisational employee value proposition. Through the adoption of this strategic measure, the organisations will ensure that they create an employee empowerment program similar to Adidas in the long run period. Develop In House Development Systems The second strategic measure is to develop an in-house develop team. As illustrated in the Adidas Company case study, the organisation has increased its success by creating an in-house development team. In this case rather than outward looking, it applies an inward look system. As Santos-Vijande, Lopez-Sanchez and Trespalacios (2012, p.1080) argued, that the adoption of an organisational in-house development teams allows for increased market responsiveness. In this case, the process is based on the creation of a process and project management teams. Through the formulation of this system, the exiting organisations will overcome the high reliance and associated high costs on outsourcing services. Consequently, this would ensure that the organisations leverage on the current low cost production and high profitability gains by the Adidas Company. One of the strategic approaches to support this is developing a shift on the recruitment practices. First, the recruitment process should shift to focus more on employee self drive and innovation, allowing for a long term innovative and self driven workforce. Changing Leadership Styles The final recommended approach is through a change on leadership style. The most recommended strategy is the transformational leadership style. Follesdal and Hagtvet (2013, p.749) recommended the transformational leadership approach. The authors argued that the approach supports employee and other intangible assets development. Thus, this analysis notes that the adoption of this approach would support the implementation of the above two recommendations. First, it would support the creation of a learning culture through supporting increased employee engagement. Moreover, it is idealised influence and individualised consideration allow for developing and nurturing the employee talents. Summary The analysis offers an evaluation of the Adidas Company employee inclusion in new ideas development. It has established that the innovation is hedged on the principles of transformational leadership and employee empowerment. The fact that the resources are intangible makes it a sustainable competitiveness that is hard for competition to emulate. However, the analysis recommends the use of transformational leadership, in-house development teams, and a learning organisation culture development respectively. References Follesdal, H., & Hagtvet, K. 2013, “Does emotional intelligence as ability predict transformational leadership? A multilevel approach”, The Leadership Quarterly, vol. 24, no. 5, pp. 747-762. Moynihan, D. P., Pandey, S. K., & Wright, B. E. 2012, “Setting the table: How transformational leadership fosters performance information use”, Journal of Public Administration Research and Theory, vol. 22, no. 1, pp. 143-164. García-Morales, V. J., Jiménez-Barrionuevo, M. M., & Gutiérrez-Gutiérrez, L. 2012, “Transformational leadership influence on organizational performance through organizational learning and innovation”, Journal of Business Research, vol. 65, no. 7, pp. 1040-1050. Men, L. R., & Stacks, D. W. 2013, “The impact of leadership style and employee empowerment on perceived organizational reputation”, Journal of Communication Management, vol. 17, no.2, pp. 171-192. Choi, S., Jang, I., Park, S., & Lee, H. 2014, “Effects of organizational culture, self-leadership and empowerment on job satisfaction and turnover intention in general hospital nurses”, Journal of Korean Academy of Nursing Administration, vol. 20, no. 2, pp. 206-214. Kapoor, A., Pachouri, A., & Panwar, R. 2011, The sustainable competitiveness report-2011, Institute for Competitiveness, Gurgaon Jones, R., Latham, J., & Betta, M. 2013, “Creating the illusion of employee empowerment: lean production in the international automobile industry”, The International Journal of Human Resource Management, vol. 24, no. 8, pp. 1629-1645. Santos-Vijande, M. L., López-Sánchez, J. Á., & Trespalacios, J. A. 2012, “How organizational learning affects a firm's flexibility, competitive strategy, and performance”, Journal of Business Research, vol. 65, no. 8, pp. 1079-1089. Schmeck, R. 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Phelps, S. 2016, Adidas Reinforces A New Culture Of Innovation With The Introduction Of Avenue A, [Online] Available at: < http://www.forbes.com/sites/stanphelps/2016/02/10/adidas-reinforces-a-new-culture-of-innovation-with-the-introduction-of-avenue-a/#5453527c7b43 > [Accessed: 29th March 2016]. Read More