If you were to ask any engineer in UTC if they had incentive to pursue either an innovative new design or large cost savings, you would be hard pressed to find a positive answer. Most people I have talked to say "what's in it for me" mostly referring to the lack of recognition received for saving a large sum of money. I know there is a program in place to receive supplemental rewards but those are few and far between. Once you get away from the personal incentives, you find that in large corporations there are large hurdles to get over to get a new venture to become a reality.
With that said, I know there are teams within the different business units that are solely focused on developing new technologies and ventures to pursue. This is made possible largely because the units establish and supports the group with a mandate for corporate entrepreneurship. This model however, can be slowed due to the gate reviews and focused strategies that are already in place by the corporate landscape. If entrepreneurship could be expanded beyond these focus groups by implementing incentive programs, the cost savings could be huge especially in manufacturing environments.
The book talks about how large corporations often suffer from pressures and controls of existing units within the firm but can be mitigated by urging the team to "forget" the traditional guidelines. In doing so, it allows the large organizations to use their large technical pool to their advantage by finding the correct balance of integration in the groups. I believe if UTC were to integrate the type of system that provides funding and senior executive attention to prospective projects, it would jump start the entrepreneurship spirit that was once the foundation of the company.
I think most large corporations suffer from the "what's in it for me" syndrome that you describe. If employees are not given adequate incentive to innovate then more times than not that won't do it, at least not while at work. I know some UTC companies offer employees up to $1000 if their ideas are patented. This provides some incentive to innovate, but at the same time it's hard to find time for innovation during the course of a normal workday. I don't want to use the phrase "think tank", but I think UTC needs to look at establishing a time and place for innovative ideas to be brought up. There are a lot of talented people working in large corporations that I am sure have great ideas, but don't really know what to do with them. I like your suggestion of instituting a system where funding and executive management is provided to prospective projects.
ReplyDeleteYour point about "gated reviews" and "focus strategies" are similar to the point I was making in class about Nantucket Nectars (NN). Going back to the case, if NN was sold to larger competitor, the purchaser would enforce its own sets of rules onto the new business. On the other hand, selling to a company with no experience but a lot of interest would bring in much needed capital and independence.
ReplyDeleteIn some twisted way, I think that instead of buying other aerospace companies, UTC could expand its horizon and start making razor blades. While UTC doesn't have much experience in razors, I am certain there is good money to be made when they sell for $20 a pack.