The case of Western Telephone Manufacturing (WTM) is an example of a failed management innovation strategy. Despite being the first to embrace the Sixth Stigma and Total Quality Management (TQM) principles, they were unable to transition to a new culture in the changed conditions (Swink et al., 2016). However, the modern world requires an approach in which different precise measurements fade into the background, providing opportunities for new ideas and flexibility. WTM failed to leverage critical components of the innovation strategy to adapt to a changing environment.
The transition to the Sixth Sigma and TQM principles helped Western Telephone Manufacturing transform completely. Before introducing a new type of culture, product quality was low, lead time was long, and costs were excessively high. All these factors made the company low-performing compared to competitors, which served as the impulse for transformation.
The process of moving to Six Sigma and TQM included employees’ training, internal consulting group formation, as well as significant management effort. Hence, WTM has become the first company to embrace new cultural principles fully. As a result of such a management shift, over 15 years, the company has become a leader in quality and price control, providing the lowest lead time as well.
WTM management succeeded in developing and introducing special tools into the company’s culture. First of all, the program, which closely monitors costs and savings, was implemented (Swink et al., 2016). Company employees were involved in learning and applying new principles on which their career prospects and rewards depended. Each manager had to fulfill certain performance targets to be promoted.
Propaganda in the form of motivational posters has also become a part of the culture. Workers making efforts received various incentives and were set as an example to others. Thus, after implementing Sixth Sigma and Total Quality Management principles, the company’s culture focused on quality and cost reduction, which required employees to acquire a common view of the company’s values.
After a few years, the WTM needed to move from quality control to innovation to survive. However, applying the right strategies to create a new culture often becomes a management challenge. First of all, it is necessary to present the company’s values to the employees and make them share common views. The leader should establish clear directions for development, determine the responsibilities of employees to stakeholders, and their role in achieving the goals of the organization (Ishak, 2017). Then, it is necessary to give a work assignment by these parameters. Focusing on cost and timing can serve as a demotivator for creativity (Ishak, 2017).
Creating a professional network within the team can also have a significant influence. Employees should feel that they do not complete all the tasks independently and bear responsibility on their own (Quirk & Reinmueller, 2018). Thus, building a team and recognizing the importance of each member’s role is the foundation of an innovation-driven culture.
There are other key aspects of the culture of innovation aimed at ensuring the company’s functioning in the new environment. It is necessary to encourage the ideas of employees, helping to promote them. However, this can often require the manager to enforce certain rules or disregard hierarchy. Nevertheless, such actions can ultimately lead to developing a truly innovative product that would not otherwise be possible (Ishak, 2017). In connection with this, it is also essential to encourage any ideas, even not suitable at first glance, since they can later become an impulse for important thoughts (Ishak, 2017). Thus, it is necessary to promote each employee’s creativity, regardless of the usefulness of the proposal at the moment.
Not only communication within the company is crucial, but external contacts with partners, competitors, and the market as a whole as well. It is essential to hire experts outside the company, as they can bring their expertise from other companies or related fields. It is necessary to communicate closely with partners and keep them constantly informed of the current situation on product development (Quirk & Reinmueller, 2018). Developing an internal culture is fundamental, but innovation also needs exceptional people. Thus, it makes sense to hire people with different skills, even if there is no specific place for them in the company right now.
They can work on existing projects, in the process of which they might offer an innovative idea (Ishak, 2017). Thus, creating a culture of innovation in a company requires much internal transformation. They all consist of defining each employee’s responsibility in production, encouraging creativity, and out-of-the-box thinking in both development and management.
Emphasis on quality and cost was no longer a priority for WTM; its place was taken by the need to introduce innovations. Thus, the management established the training through workers’ participation in the presentations of various influential companies (Swink et al., 2016). This is not the best move, because it is essential to develop a unique path and goals which should be presented to employees. The creation of an investment grant aimed at encouraging innovation is a reasonable method.
Financial incentives for promising projects and ideas are critical to product development. Collaboration with a research university is also the right solution, as it requires the participation of external experts in the production. On the other hand, measuring performance is detrimental to innovation, as it suppresses creativity and establishes formal limitations. Thus, WTM partially implemented the correct innovation strategies in their new culture; however, key points were still not met. The transformed approach was not aimed at creating a unique model but rather at emulating existing success stories.
WTM should respond by changing the development and production strategy. First of all, it was necessary to prevent employees’ frustration, explaining to them the importance of innovation and a new approach. Thus, the staff saw no need for change and rejected the new culture.
It would also be wise to spend more time developing a new product, researching competitors’ proposals, and finding partners. In the end, it was worth hiring new specialists who could bring new ideas to the company. WTM had little idea of themselves in the new conditions; the transition to Sixth Stigma and Total Quality Management took them 15 years, after which it was necessary to change the strategy in a short time. It is important that the same person was engaged in management, limiting the possibility of introducing an innovative approach.
The Western Telephone Manufacturing case showed how crucial changes in company elements are when changing strategy. Even though the management consulted the production at all levels, the company’s staff remained the same (Swink et al., 2016). The management should have considered consulting with specialists from outside and hiring them for key positions. They also needed to abandon their favorite performance measurement and reward system. The foundation of a business is people who generate new ideas and develop innovative approaches. In this way, the company limited its options, standing a new philosophy on an old foundation.
Ishak, W. (2017). Creating an innovation culture. McKinsey & Company. Web.
Quirk, S., & Reinmueller, J. (2018). Building an innovation culture. Ways to connect with employees, inspire cultural change and embrace innovation. KPMG. Web.
Swink, M., Menlyk, S., Cooper, B. M., & Hartley, J. H. (2016). Managing operations across the supply chain. McGraw-Hill Education.