This paper examines the problems of Toledo Specialty Glass concerning the Solar Sandwich Project. It analyzes the problem, then proposes solutions supported by business management and innovation theory. The major problems looked at include team making, synergy, motivation, and behavior modification.
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Kiernan cites James Brian Quinn in his book Get Innovative or Get Dead as affirming that the power for the future has moved from the “economies of scale” as in raw materials and manufacturing to the knowledge and service economies. The major value in a company is now its intellectual capacity rather than in its hard assets. (1992) So innovation is the way to survive this period of global change. However, innovation requires an application or it becomes mere research and a viable product may never get to market. Toledo Specialty Glass is built upon the prospect and expectation of reliable innovation. The nature of the glass business requires that companies constantly innovate and develop new products because glass must be replaced constantly and many companies are developing newer and better products. However, there are problems at Toledo Specialty Glass that inhibit the development of viable products that need to be resolved.
Overall Analysis of the Problem
An analysis of this case study of Toledo Specialty Glass showed some major problems which are costing the firm money and retarding the progress of their R&D. The four separate divisions have little, is cross-pollination. Each of the players and stakeholders has a different motivation, mostly personal and unrelated to the needs of the company. There is no motivation to focus on any one project. Some of the personal needs of the scientists include publishing and exchanging information with other scientists, and this may be compromising the security of the company’s current projects. Each of the groups at the different divisions has a different focus and work method, none of which represent a complete development system. There is no real team in place which means that people work at cross purposes and there is little company spirit. Something needs to be done if this company is to stay competitive.
Project Problem Examined in this Case Study
The problem around which this case study revolves is the development of a new cheaper photovoltaic cell, described in the case study as “sandwich technology”, because it is created of layers, one of which is a central layer of crystals between the surface glass layers. This project is a cheaper way of making photovoltaic cells and has been fully funded for more than five years and has elicited considerable interest.
The engineer responsible for this innovation is Frank Harlan, who has no title and no degrees, but has had many patents attributed to his work. However, the work seems stalled, as the product which is efficient and cheap cannot be replicated with any degree of certainty. Nobody knows why the ones who work do work and nobody knows how they work. Linda Choate, the head of R&D, once had a relationship with Harlan which might have allowed her to collaborate in finding out, but this was destroyed when she showed him that the current idea upon which he was concentrating his efforts would never work. He felt that she showed him up and has not been cooperative since that time. Two other divisions are waiting to get the work: one at Palo Alto to work out the kinks and the other at Long Beach to ramp it up for production.
This illustrates a major problem that is impeding work: there is no synergy, no symbiotic relationship among the different managers, and no team which is focused on bringing the product to market. Amar cites a symbiotic relationship as one which will eventually result in innovation and solve problems. There is a mix of overlapping roles, but each “symbiont” knows and assumes the duties of their current role (these change as needed for problem-solving) and work towards the goals of the organization. “It is a management system with its own ways to perform standard management functions. Its practice will result in the creation of human symbiosis management for a knowledge organization.” (Amar 2002, 80) In this case study, Frank Harlan, an informal innovative leader, and his group function much like Amar’s description of a symbiotic group. However, there is nobody among them to document the processes tried, nobody to analyze step by step to find what makes the difference between the successful “silicon sandwiches” and the ones which fail to meet the needed standards.
The lack of symbiosis and the different cultures of each of the four divisions makes each one isolated and there is no exchange of either information or methodology.
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Analytical Chart of the Divisions of Toledo Specialty Glass
Director of R&D-Linda Choate: VP Manufacturing-Mike Stahl:
|Installation||Toledo- Gerhart Lab |
|Palo Alto- Materials Research||Stanford-NanoTech Research||Long Beach-Engineering|
|Leadership||Harlan is the actual leader, but she has no title||Manager- Heras||Manager- Sharma||Manager-Lancaster|
|Function||R&D and low volume manufacturing for difficult processes. All breakthroughs come from here.||Scientific development, maintain ties with the academic and scientific community. Research but no development. Heras is concerned with publishing not developing products.||Pure research-consulting with Stanford scientists on staff. Nanotechnology |
|Headquarters and manufacturing, engineering development, process maintenance, and customization. CRM|
|Culture||Open approach||Avoid risk|
|Personnel||3 sups, 12 Eng, 9 Tech||5 Sci, 1 Tech||6 Sci, 2 Tech||2 Sups, 8 Eng, 3 Tech|
|Connections||U of Ohio, Toledo, U of Mich, Carnegie-Mellon, MIT, Stanford, UC Berkely||UC Berkely, Santa Clara U, San Jose State, U of Tokyo, Jet propulsion Lab, Los Alamos, Naval Research Labs||Stanford, UC Berkely||Customers|
|Work Style||Iterative processing: design, prototype, test||Scientific inquiry, publishing, and consulting||Manufacturing, streamlining processes, bringing a product to market, customizing products|
|Problems||No scientific method or documentation, need to refine or modify. |
Harlan resents the people with degrees and resents that they are more highly paid. He wants respect more than money. He was a supervisor but also hates paperwork.
|No tangible returns and there may be some transference of knowledge outside the company to competitors using this academic hob-nobbing.||Don’t take chances, cannot manage risk. Do not want to accept the transfer of product until it is completely developed and documented.|
|Possibilities for Change||Need to have at least 1 or 2 scientists and someone to document, maybe a technical writer||Need a couple of engineers to look at practicalities||Need to justify ongoing existence-no tangible developments yet||No scientists to help refine processes|
Analysis of the Chart
The first thing noticed from this chart is that two divisions have scientists and no engineers, and the other two have engineers and no scientists. Linda Choate is thinking of merging two divisions: Toledo and Palo Alto. The other alternative is to get Toledo to solve the problems with the Solar Sandwich. George Risdon, the CEO, is unhappy with the high cost of R&D and has suggested they might close Toledo, but she does not believe that would be good for the company, since all previous breakthroughs have come through there. No other division is capable of the kind of work necessary for new development. She does not see another alternative: mix the groups part of the time and maybe get a documentation specialist for Toledo. Scientists need to see the real world now and then, while engineers need to learn some scientific methodology. However, getting the people to willingly cooperate with this plan will not be easy.
“In The Management of Innovation, Burns and Stalker clearly separated mechanistic from organic environments. In a mechanistic environment it is best to create standard processes, rules and hierarchy to improve the efficiency of the organization. But organic environments require a different approach, one which recognizes the importance of unique skills and knowledge, as well as the means to stimulate these toward solving new problems and creating new products. Organic working environments require employees to use their own knowledge and judgment to solve a continually changing set of problems.” (Smith, Roger 2008).
People Problems to Consider
To look at possible actions we need to look at the motivation for each division and its members. At the beginning of the case study, Linda Choate wondered if they were all working for the same company. Miner tells us that McClelland that there is a need for an “achievement situation” including a, “greater sense of satisfaction when solutions are attained,” and that there must be a “distinct future orientation, thinking ahead and planning, what McClelland calls ‘anticipation of future possibilities. ‘” It is similar to the entrepreneurial role “and it is the prospect of achievement satisfaction, not money, that drives the successful entrepreneur; money is important only as a source of feedback on how one is doing. (McClelland, 1961).” (Miner 2002, 146) Frank Harlan is this type of person and he even mentions that he wants respect. At the end of the conference, he mentions five things he wants. The first three are merely signs of respect. The fourth is a higher salary, and the last is a chance to “belong to the club” by joining a conference of scientists. All of this points directly to what Harlan wants. Harlan is the pivotal figure, so we need to look closely at him, his division, and the company mix of all divisions.
The profile indicates that Harlan is the “entrepreneurial” type, which has been identified in many publications. Maslow would have identified Harlan’s needs as I have here. (1954, 1970) Harlan is low on current job satisfaction, which may explain his lack of enthusiasm. “Job satisfaction is viewed as an outgrowth of achievement, recognition (verbal), the work itself (challenging), responsibility, and advancement (promotion). These five factors are considered to be closely related, both conceptually and empirically. When they are present in a job, the individual’s basic needs will be satisfied, and positive feelings and improved performance will result. The basic needs specified are those related to personal growth and self-actualization, and these are said to be satisfied by the five intrinsic aspects of the work itself. ” (Miner 2002, 165)
Choate needs to repair her relationship with Harlan, or they may lose him in the shuffle. She can share a certain amount of confidence with him if she is careful to be very clear that she thinks Toledo is the most important division for the future of the company, and she wants to ensure its future. She could say that it has been suggested that she look at combining two divisions and that Toledo would be one of them. She could quite truthfully say that she thinks this would be a big mistake, because Toledo has its character and culture, and it has worked in the past to produce innovative products, so it should not be substantially changed. She could point out that in such a case, it would be moved to California, and she believes she would lose a lot of good people in that scenario. It is a risk she should consider since Frank was competing with her and so shows that he respects her.
We look back at the beginning of the profile on Harlan and the Solar Sandwich technology, and we see that he is currently motivated by the possibility of transferring the process directly to Long Beach, instead of the usual transfer to Palo Alto first for refinement. Even though Frank dropped out of engineering, he likely knows equivalent to somewhere between an MSc and a Ph.D. He simply does not have the credentials. This is finally holding him back, and he knows it. If there were some way to help Frank attain these credentials so that they could pay him the higher salary and call him “Doctor Harlan”, it would accomplish two purposes. Frank would derive greater job satisfaction and he would acquire the scientific and academic skills the company needs for documentation.
Some schools would give Frank credit for his accomplishments, especially considering the 38 patents for which he is responsible. They would allow him to test out of many subjects and then pursue an ad-hoc degree. He could then pursue a Ph.D. based upon the current project. This would require the documentation necessary for the transference of the technology to Long Beach. He could be offered this option, with the company paying for the education credits, as a way to advance further in the company without losing his position of importance at Toledo.
Mike Stahl has given Linda Choate the option for Frank to document the process and he would take responsibility for ramping up the product. If Frank cannot be persuaded to pursue the advanced degree, then hiring a technical writer to help him with documentation and temporarily transferring one or two scientists to work on his project with him would create a team for this project. It would lessen the sting of having scientists “help” him if one or two were also assigned part-time to Long Beach. It could also be suggested that Palo Alto and Long Beach need to have a couple of engineers around part-time to help them acquire the engineering product point of view that they lack. This could be proposed for now or later and Frank could be given the option of being one of the engineering consultants for this project, possibly right as the Solar Sandwich technology is transferred to Long Beach. All of this has a certain amount of risk attached, but there seems to be little progress otherwise. Change is needed.
Arie de Geus (1997) discusses this sort of the change in his book, The Living Company. In chapter six he talks about succession. This seems appropriate since the current CEO has not seen anything come from Toledo of value. Even though he has been in place a long time, it works the same way. Also, Linda Choate has been promoted from her first arrival and stands to acquire another promotion if she succeeds. Since she has the respect of the other stakeholders, including the CEO, then she needs to step partly into the role she is looking for in the future. Her current title of Director of R&D will get her Frank’s attention and gives her a certain latitude in what she can do. She needs to exercise that. Success with this strategy holds many rewards, while failure with it is no worse than adopting the other alternatives available.
Explanation of the Theory Behind the Proposed Solutions
Innovation has been examined and researched by a multitude of researchers in a huge variety of fields, possibly because it is one of the more human traits. Every tool ever devised fits the topic of innovation. For example, Drucker (1985) suggested, “Innovation is the specific function of entrepreneurship….” Churchill (1992) noted that entrepreneurship is a process of “uncovering or developing an opportunity to create value through innovation.” Lengnick Hall (1992) argued that for strategic management, an important link exists between innovation and competitive advantage which can be maintained. This enables a company to earn above-average returns until competitors duplicate the advantages thus gained for customers (Hitt et al. 1999). In Lengnick-Hall’s (1992) view, innovations that:
- are problematic for competitors to take apart and copy,
- are based solidly in market realities,
- allow the company to exploit timing mechanisms of its core industry,
- depend on using capabilities which can be adopted company-wide and are integrated with long term competitive advantages.
The literature says a great deal about organizational learning. Hamel and Prahalad (1993) suggest that becoming a learning organization will not be enough. That change must translate to efficient and strategic management which will put the company ahead of its competitors. Dess et al. (1997) showed that the entrepreneurial approach to strategy-creating processes is necessary to organizational success. They point out that this exists where a company “engages in product market innovation, undertakes somewhat risky ventures and is first to come up with proactive innovations, beating competitors to the punch.” Therefore it is effective innovation (which creates a competitive advantage) is the outcome of entrepreneurial processes.
One thing that all this research has shown us is that innovation does not happen without entrepreneurial activity. Venkatraman (1997) argues that innovation is one of the “three sources of entrepreneurial opportunity.” Lumpkin and Dess (1996) say that innovativeness (which hinges upon the firm’s support for new ideas, experimentation, and creative processes which aid the development of new products, services, and processes) is an absolutely necessary part of entrepreneurial and learning orientation. Williamson (1985) proved that small firms are more effective at creating innovation than large firms. But, he also shows that large firms can be more effective at taking advantage of innovation, because of their ability to promote large-scale production and distribution of those new products and services. He proposes that small firms and large firms should form alliances to leverage both their advantages. Toledo Specialty Glass has been trying to do this, but their “partnership” in the form of subdivisions has not truly become a team.
What this Means for Toledo Specialty Glass
So research has established that entrepreneurship and its attendant innovation is necessary for today’s market. However, so is production. Even a new cure for cancer has to get to market or it is useless. Toledo Specialty Glass has a possible new cheaper photovoltaic cell in development. However, the development time is becoming too long and costly, and there is still no clear idea when this product might be ready for market. In addition, there are barriers to the successful development of this product. Thompson (1969, 23) stated that “If an organization takes its innovation needs seriously and tries to meet them through a segregated R and D unit, it is likely to run into a great deal of trouble trying to stimulate innovativeness within the segregated unit. ” Transformation almost always involves reorienting action and repositioning the organization, either by putting the organization into a new business or by adopting a radically different means of doing the job that the organization has traditionally done. Transformation calls for and permits the installation of radical innovations, innovations too radical for the existing systems to support. Clayton Christensen, a professor of business administration at the Harvard Business School, refers to these as “disruptive innovations.”
West (2001, 21) identified the problems that Toledo Specialty Glass is facing, “Once problems have been identified and defined, whether on the supply side by engineers or scientists or on the demand side by marketers, a set of potential solution options must then be assembled, and some means must be brought to bear to test the options, eliminating those with less likelihood of success. Almost never can commercial innovators be assured in advance that all the elements will fall into place: that the projected technology will work as expected, a market will be found for it, and the managerial and technical personnel involved in attempting to bring it to market will prove capable of meeting the myriad challenges likely to be experienced in the attempt.”
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Create a New Team
Considering these barriers, Linda Choate needs to work out some way to integrate these divisions into a team or otherwise create a team. The three divisions working on this are working at cross purposes. The Toledo branch does not want it to go through Palo Alto, and the Palo Alto branch does not want it to go to Long Beach. Long Beach needs a streamlined process ready to ramp up for production and distribution. This will not happen if they do not become a team.
Toledo Specialty Glass could benefit greatly if these divisions could be somehow synergized into a working team. In this manner, the entire organization would be able to remain competitive by developing informal approaches to knowledge and learning creating a very important asset to be actively managed. Gilly and Mavecunich (2000, 16) tell us that, “Increasingly, knowledge is dispersed cross-functionally and must be exploited across geographic boundaries. Embedding knowledge in organizational processes and documents, distributing information and expertise in readily accessible forms, and disseminating knowledge and accelerating learning are critical challenges facing organizations.” In other words, Linda Choate needs to start mixing them up a bit. However, this cannot be done without the active cooperation of the players involved.
Manage the Stakeholders
Linda needs to adopt a method for modifying the behavior of the stakeholders in the solar sandwich project. Thompson(1969, 20) suggests that monocratic systems, of which each of these divisions seems to be, do not provide for appeals when conflicting rights are involved, and the superior’s veto ends the matter. The organization allows new ideas to be generated, but it vetos them. “(Actually, they go into files and wait a new chance, which may be generated by a crisis, or a catalyst such as a consultant.)” (Thompson 1969, 20) it appears that this particular situation is a crisis, and the catalyst for change is Linda Choate. As said before, her two choices seem to be to move a few people around at least temporarily to create a new team, of which Frank Harlan should be groomed to lead. It is therefore probable that Robbie Heras should not be a member of this team. Frank does not trust him, and he likely has several projects upon which he is working. Some less busy, but competent, scientists could be brought into the mix. Ideally, the new team will be able to create a symbiotic relationship among the participants. Frank is the ideal leader in this case for two reasons: the Toledo organization already has a symbiotic atmosphere, and the project was Frank’s baby from the start.
Symbiotic relationships do not use “permanent roles of givers and takers, inferiors and superiors, controllers and controlled, subordinates and bosses, and what we traditionally know as employers and employees.” (Amar 2002, 80) free people for innovation, all participants need to be equals. In a successful symbiosis, there are overlapping roles but each participant knows the scope of their role and what needs to be done to attain the project or organizational goals. If this can be successfully done for this particular project and it can later be spread throughout the entire organization more slowly. In that way, Toledo Specialty Glass can be brought into the current century for best practices.
Support the Needs of the Stakeholders
In addition to creating a new team, something has to be done to modify the behavior of certain people in the organization. Frank Harlan is the most immediate need. He will need to learn the value of scientific investigation and documentation. However, his innate leadership skills will make him extremely valuable once this is done. The other person whose behavior needs to be modified and possibly the members of his team would fall into the same category is Robbie Heras. His need to publish and to gain the respect of his fellow scientists in all the various meetings and seminars that he attends is creating a real danger of technology transfer to competitors. He needs to be persuaded that the companies needs have to come first. However, to get his full cooperation, some other method of fulfilling his needs for recognition must be found and implemented.
Modify the Behavior of the Stakeholders
So the next step after negotiating the creation of a new team will be to embark upon some kind of training to change the behavior of the aforementioned stakeholders. “Traditional organizations have known that there are four strategies for modifying human behavior: positive reinforcement (to give the wanted outcome on reflecting a desired behavior), avoidance learning (to take away unwanted outcome on reflecting a desired behavior), extinction (to take away wanted outcome on reflecting an undesirable behavior), and punishment (to give unwanted outcome on reflecting an undesirable behavior). ” (Amar 2002, 46).
There are several considerations for behavior modification that Linda Choate should consider. They are all based on the needs of the players involved and the needs of the organization combined. All the players need to feel valuable and respected. They need to be included as part of the company culture. However, they also need to be reminded that that culture includes the combination of their individual needs and company needs. Frank Harlan’s current attitude is focused almost entirely upon his need for respect and recognition. In a slightly different manner, the same is true for Rob Heras, though it is the respect and recognition of his fellow scientists that he needs. Each in his way, these two are endangering the needs of the company. Frank is hanging back on development through a refusal to document the process or to learn how if that’s his need. Heras, on the other hand, of technological secrets to competitors by his need to contribute to the community of his peers. The product will never be brought to market, at least not by Toledo specialty glass. They need to learn to adopt the corporate hat. Linda Choate might look into the possibility of having several people attend a formal leadership training seminar, possibly one tailor-made for her company. In this manner, they might discover, rather than be told, the need to resolve the tension between individual rights and needs and communal obligations. (Beerel. Annabel 1998, 91-93).
Another strategy that should be employed is to work with the two major stakeholders, Harlan and Heras, to work out some way to help fulfill their needs in a way that does not negatively impact this project or any other. It should be something which they help to devise and implement and for which they will be rewarded in return for their cooperation and work. This is because intrinsic rewards come from the employee’s work environment and his actions. This creates intrinsic rewards, which do not come from someone else giving these rewards to the person. They come from the work in the form of accomplishment, newly acquired knowledge, and joy in the work. (Hays, 1999). Extrinsic intrinsic rewards should also follow. That is, the intrinsic rewards should be turned into extrinsic rewards, such as bonuses, profit sharing, or stock options. They could include money, upward mobility, and recognition. Extrinsic intrinsic rewards are a prime motivator if they can become extrinsic rewards. (Amar 2002, 179).
Define the Goals and Involve the Stakeholders
Clear definitions of what is sought and what will be considered successful must also be worked out. Achievement satisfaction is difficult when people cannot recognize success or failure.
In McClellend’s view, it is the possibility of “achievement satisfaction, not money, that drives the successful entrepreneur; money is important only as a source of feedback on how one is doing.” (Miner 2002, 146).
By soliciting the help of the prime movers of the divisions involved in Solar Sandwich, and by re-educating them with their permission to expand their roles, Toledo Specialty Glass can begin to move towards creating an entrepreneurial team for this and future projects. With some imaginative reorganization and a little positive manipulation, the company can move into a more “organic” mold while remaining focused upon the business goals. The Toledo branch mustn’t be closed, since most, or all, of the company innovation, begins there. However, it is just as important that an eventual product result can be brought to market. This is probably the best solution for this particular situation, and Linda Choate should be able to affect the necessary changes. She needs to repair her relationship with Frank Harlan to persuade him to work with her on the needed changes. She also needs to persuade Rob to remember where his paycheck originates and to provide both of these men with some other way to fulfill their needs. By starting with this project, Linda Choate can move the company to a more competitive cultural structure and ensure that her future position is with a profitable and innovative company.
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