The first step of a roadmap for realizing bottom-up innovation within an operating business

Abstract

The world around us is changing faster than ever before. Companies need to keep up with the fast pace of the rapidly changing business landscape to stay competitive. To achieve this, they have to find ways to continuously innovate and search for new opportunities. The company Pon Holding believes that continuous innovation can be achieved by unleashing the ideas of employees in all their subsidiaries (so-called Operating Companies). This approach is called bottom-up innovation, where employees are considered in the front-line to witness (i) hurdles in current operating models, (ii) changes in customer demands, and (iii) trends in the market that can become (new) business opportunities. For Pon Holding, exploiting employees’ ideas allows the Operating Companies to rejuvenate current products and services and create new ones. Pon (Holding) consists of 4 business groups, including Pon Equipment and Pon Power Solutions (PEPP). The business group PEPP has built the innovation lab “Area 52” to embed continuous innovation into the business group and its 8 Operating Companies. The aim of Area 52 is to embed bottom-up and continuous innovation in Operating Companies to sub consequently focus solely on the creation of new ventures for PEPP. Unfortunately, Area 52 sees that (i) employees within Operating Companies are inhibited and prevented from working on ideas and that (ii) Operating Companies struggle to make innovation a priority and facilitate bottom-up innovation within their organizations.
Hence, the main purpose of this thesis is to explore and design how Operating Companies can support employees to innovate in a structured, consistent, and experimental manner during their daily work activities. Hereby, it offers PEPP a generic design ready for implementation and offers new perspectives to both the organization and today’s literature gaps. By conducting extensive interviews and observations, light is shed on the 15 factors within PEPP that affect innovative behavior among employees and the main hurdle of a lack of time is identified. Additionally, it revealed that bottom-up innovation takes place but is unfruitful. As a matter of fact, a handful of employees work on ideas in their personal time dealing with (i) a low success rate, (ii) high risks, and (iii) no compensating rewards. This low success rate is found to be vital to resolve since it (i) can be easily prevented by offering tooling and (ii) leads to fruitful results that sub consequently (iii) encourage more employees to engage in bottom-up innovation. Minimum tooling in the form of a crash course is designed, ready for implementation within the existing structure of OpCo’s. Offered by Area 52, the crash course equips employees with the necessary innovation expertise leading to higher the success rate of their ideas. A pilot with 12 participating employees found that the crash course (i) developed participants’ innovation expertise (and thus organizational innovation capabilities), (ii) increased the success rate of ideas, and (iii) contributed to building an innovative-supportive climate. Despite its positive results, necessary conditions and recommended iterations require more attention to ensure the tooling is implemented and bottom-up innovation can be realized.