Amways Innovation Strategy - Case Study Example

BUILDING AN INNOVATION STRATEGY The work at hand is a master innovation “cookbook” for the for-profit organization Amway. This contains the recipes that must be included in the innovation “cookbook” covering the ingredients linked to organization design models that drive innovation, organizational processes that enable innovation, success factors for people and innovation, definition of essential innovation success measurements and integration of corporate social responsibility (CSR) and sustainability. To get started with this, knowing the ingredients of innovation is a must. Ingredients of innovation One important theory linked to the concept of innovation is the ‘diffusion of innovation’, a theory developed by Everett M. Rogers that postulates that innovation happens as an output of communicated ideas through certain channels over time among the members of the social system (Rogers, 2010). This theory clearly states that there are stages of adoption of innovation, which starts with awareness, followed by interest, evaluation, trial, and finally adoption (Rogers, 2010). Rogers also suggested that there are factors affecting diffusion of innovation. These include innovativeness, risk-taking and age, resistance to change, innovative attitudes and values (Rogers, 2010). In other words, innovation cannot easily be gained, because it is affected by some individual or personal characteristics (Rogers, 2010). If personal characteristics are directed towards the same goal that will lead to the successful implementation of innovation, then at some point, Rogers’ idea will guarantee us of the achievement of innovativeness linked to risk-taking behavior and age, and the level of resistance to change, and innovative attitudes and values. In reality, the level of innovativeness of every individual varies. There are individuals who are earlier in adopting an innovation compared to the other members within the entire social systems. Based on the idea of Rogers, this variation will be a remarkable barrier to successful implementation of innovation, because not everyone will have to hold on to the same level of innovativeness. Innovativeness simply is about opportunity at some point or to which it is being presented first. However, not all individuals have the same level of risk-taking behaviors and even age. According to Roger, this factor will have to matter because older managers are less likely to take risks as empirically observed. Even people are also hesitant to accept transition, such as acceptance of new technology as the effect. This is a remarkable manifestation of the individual’s nature to resist change. Finally, there are situations that influenced people attitudes or values because of certain situations. According to Rogers, these are remarkable factors that will influence the level of innovation that will take place in an organization. However, contrary to the idea of Rogers, Joseph Schumpeter argued that innovation can be seen as “creative destruction” waves allowing it to restructure the entire market for the advantage of those who are able to grasp discontinuities faster (McCraw, 2009). In other words, this theory establishes the point that capitalists have continued enhancement of the existing structure, by administering it, but this can only possibly bring the idea of the cycle between creation and destruction. There is therefore a cycle of things concerning innovation if one will take into account the idea of Schumpeter. This may therefore place some certain firms in “Open Innovation” by which there is a dominant element of becoming flexible in the use of several business models (Hafkesbrink, Hoppe and Schlichter, 2010). The above concepts and theories closely illustrate the success factors for people and innovation. Next to this point is concerning the organisation design models that drive innovation. Any effective organizational design models that exist at present are good at aligning business strategies and objectives to guarantee that resources are efficiently employed to meet defined business objectives (Kahn, 2007). Intuitively, if strategies and objectives are so connected with each other, the force of innovation can be so strong and at some point, unwavering. On the other hand, regarding the organizational processes that enable innovation, it is quite attractive to take a look into the proposed theory of Rogers. The ‘diffusion of innovation’ theory as already stated, suggests that innovation should start with awareness, followed by interest, evaluation, trial, and finally adoption. This therefore means that there is a need to specifically introduce the actual innovation, create assessment on the level of response to it, then a remarkable trial is necessary in order to determine if it has to be continued or not. Organizational processes that enhance dynamic capabilities will help develop specific structure towards innovative dynamic capabilities (van Geenhuizen, 2010). According to Merrill (2008), organizational innovation can be achieved if there is a flow of knowledge between people. This idea leads to the point that organization’s processes should be linked to people and technology and altogether should come as a system. Aside from organizational processes that drive innovation, it is also of good point to take a look at the definition of essential innovation success measurements. This will guarantee appropriate measurement and consideration if a certain innovation is successful or not. Performance metrics are common means in order to determine how well a certain program is proceeding (Rainey, 2008). Measuring performance is the most intuitive approach to know if strategies are well-suited to the achievement of goals. If not, relevant corrective measures are necessary, a certain process that will always connect to the implementation of planning. This will have to ensure that a standard is set and it must be obtained in order to determine the level of success factor. In this regard, as innovation is linked to strategies and goals, it will always easy to determine how it is progressing as well. There will be a significant basis that innovation works out just fine if strategies and goals are substantially coordinated and have been successfully made to work together for good, based on the set standard. In this case, the components of innovation management and the various phases of innovation process will have to be considered together with the need to clearly identify goals and which strategies and measures to use to achieve them (Gerybadze, Hommel, Reiners and Thomaschewski, 2010). The above point is clearly a basic internal approach in an organization, but there is other concern that unites internal and external aspect of the firm. This concerns the most common issue regarding the corporate social responsibility (CSR). It is a common question in the literature if CSR of firms lead to innovation. The answer lies on the point that innovation may appear to be the effect of firm’s social responsibility, at some point (Underwood, Blundel, Lyon and Schaefer, 2012). This therefore will lead to understanding what kind of social responsibility a firm appears to be engaged into. In other words, it is also of a good thing or value for a firm to definitely engage itself into CSR because there is an implied change or innovation linked to such action. So far, this section has just discussed the relevant ingredients linked to the success of an innovation or prior to that, its successful inception. The next point of great consideration in the work at hand is on how each of these ingredients will be used to support the creation and application of an innovative strategy to the chosen for-profit organization. Justification of the above theories in support of Amway’s innovation strategy This section considers how the above “ingredients”, the theories discussed will have to support the creation and application of certain innovative strategy for Amway. There are important points for consideration. The first point is to understand how much innovation is necessary or required for Amway. It is found that Amway is an organization that is open for innovation, thus this will imply that it is flexible in employing several business models. Amway is one of the leading firms in personal-retailing industry. Thus, this information alone will have to give the impression that the company has to significantly employ human resources that are willing to grasp the dynamic organizational goals and structure of the company. The point of view of Rogers may be quietly applied in this case because it is able to promote the right process of understanding whether a certain innovative strategy has to be promoted or not. Furthermore, it also seeks to establish understanding personal characteristics of individuals that may potential hinder or support the success of innovation. However, there might be associated danger with this constant improvement, as stated by Schumpeter. Innovation can be a destructive tool once its enhancement will have to destroy what has been created. This can only be prevented if Amway will further engage into CSR because this will serve as its guiding point on what to do for the benefit of the society, allowing its firms to undergo sustainable operation. This is the first target of Amway for its innovation. To go for a sustainable operation must be the target goal of Amway, because this implies that its product and service offerings have received continued support from the society. However, the problem is not in this external aspect alone. This is the next point of consideration that it has to establish also. The need to come up with a highly motivated workforce to go for innovation is necessary, because this will either create Amway if successfully done or destroy the firm if failed. This will have to be remarkably integrated with CSR as such activity will help the firm define the needed innovation as stated in the above theory. However, individuals working for the firm should have one concept towards innovation, because such will help increase the level of innovativeness of the firm, as Rogers’ theory implied. In other words, the need to consider the society and internal aspect of the firm primarily the human resource will help Amway establish its actual innovative strategy that is already open and flexible to change. The actual strategy is therefore to fully understand what the society wants the firm to offer or establish more, and then this will have to be backed up by the human resource with dynamic acceptance for innovation. In order to identify the level of enthusiasm for innovation within the firm, performance evaluation measurement is necessary. This will take into account the knowledge and level of response that the human resource can afford to give. In this way, the actual process of innovation will not be deterred, but will be clearly evaluated and corrective actions will be employed further if things will turn not smoothly as planned. As Amway is employing open models for innovation, it will not be harder for it to implement a strategy that will seek to combine society’s dynamic changing needs while constantly in control of its internal human resource or internal structure in general. These two will have to substantially promote something new or creative that will consider skills and intellectual capital to the fullest instead of focusing solely on a traditional hierarchical organizational structure. In other words, Amway will have to go even more innovative, and forget about its old structure, but rather be more appreciative in dealing with its human resource to encourage them to constantly think of innovative ways that will bring forth creative and new ideas. Doing this will allow Amway to promote new products and ideas from time to time, and everything at this time must be founded by the prevailing changing needs of the society. Conclusion In a nutshell, the need to go for innovation is an important consideration primarily in firms that tries to integrate how they can create unique organizational structure, product and service offerings. All of these seek for the goal to on top in its specific niche or industry. However, there are various theories linked to innovation, and it is important to consider them at some point prior to formulating the appropriate innovative strategy that will make a difference. The work at hand considers this point of view by using the case of Amway with the supporting details coming from existing theories linked to innovation. It is found that Amway’s probable strategic innovation can be highlighted by using the relevant theories about innovation and other related concepts. References Gerybadze, A., Hommel, U., Reiners, H. W., and Thomaschewski, D. (2010). Innovation and international corporate growth. London: Springer. Hafkesbrink, J., Hoppe, H. U., and Schlichter, J. (2010). Competence management for open innovation: Tools and IT support to unlock the innovation potential beyond company boundaries. Books on Demand. Kahn, E. (2007). Innovate or perish: Managing the enduring technology company in the global market. Hoboken, NJ: John Wiley & Sons, 2007. McCraw, T. K. (2009). Prophet of innovation: Joseph Schumpeter and creative destruction. Cambridge, MA: Harvard University Press. Merrill, P. (2008). Innovation generation: Creating and innovation process and an innovative culture. Milwaukee, WI: ASQ Quality Press. Rainey, D. (2008). Product innovation. Cambridge: University of Cambridge Press. Rogers, E. M. (2010). Diffusion of Innovations (4th ed.). New York, NY: Simon and Schuster. Underwood, S., Blundel, R., Lyon, F., and Schaefer, A. (2012). Social and sustainable enterprise: Changing the nature of business. Bingley: Emerald Group Publishing. Van Geenhuizen, M. S. (2010). Energy and innovation: Structural change and policy implications. West Lafayette, IN: Purdue University Press. Read More