Recaro Aircraft Seating: Innovating the Innovation System in a Mittelstand

Company 

Group 3Sarah Bennani Vladimir Pushmin Anton Telepnev Maria Zatkova

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Recaro’s new process integrates both exploration and exploitation, although mainly beneficial, it still has some drawbacks for the firm

Open innovation approach

Exploration Exploitation

Direct interaction with current customers for ideas

of improvement

Use of range of workshops and trade shows to foster

improvement

Collection of previous researches in the Innovation

shelf

Innovation shelf stores ready to implement innovations

that can be used when needed

Lower cost of seat

development

Faster product development

Fast idea identification

Ability to address temporal

complexity

Increased revenue from sell of unused

technology

Decreased time pressure on

development team

Some of the technologies stored in Innovation shelf will

never be usedIncreased R&D costs

BenefitsBenefits

Drawbacks

Recaro’s suggested restructuring plan is described as structural ambidexterity, but there could be other ways to do so

Contextual ambidexterity Cyclical ambidexterity Reciprocal ambidexterity

Suggested new process

Organizational structure

Innovation principles and philosophy

New innovation process

• R&D department is divided into 3 units• Innovation focuses on exploration of

new ideas• Platforms focuses on exploitation of

previously created components• Validation & Verification combines both

activities in testing, risk analysis, etc.• Innovation management acts as a

controller of internal and external activities

• Innovation focuses on customer needs• Recaro actively promote its core values in external

sources• Leadership strategy that connects top management,

employees and all departments, which translates into teamwork, transparency and value creation

• Innovation supermarket helps to use existing knowledge in new projects and acts as a motivator for employees

• Idea generation and evaluation – ideas go through filters and applied into technology matrix, which helps to get a flow of new applicable ideas

• Innovation development - additional filter for idea applicability and further idea development

• Platform development – creation of an entire product that suits all customers

• Customer development – product customization

• Simultaneously pursuit of exploration and exploitation within each organization unit, where employees make their own judgement about when to exploit or explore

• Empower employees

• Sequential exploration and exploitation activities performed by one organisational unit over time.

• Organisation alternates between long periods of exploitation and short periods of exploration.

• Organisation shifts from one activity to another over time.

• Exploration and exploitation activities are performed sequentially across functions and domains.

• Activities are not synchronised in each domain as long as an overall balance is maintained.

• Based on constant ongoing resource exchange and collaborative problem solving.

The three stages towards innovation is a plan that Recaro should implement, however a lack of communication could be a threat to its success  

Organizational design = combination of differentiation of functional units and effectiveness of their integration Support

Division of R&D department into three stages

• The division of functional units is source of expertise and higher focus on the core competencies

• More specific target to achieve for each unit

• Timing of efforts, technology roadmap Idea Generation

• Involves several sources, including diversity of perspectives, which enforces the validity of the outcome

• Employees management, external resources, trade shows, workshops

• All the way through the process development, customer requirements, wants and needs are considered and monitored closely (through workshops)

Innovation Development

• Contributing to the further confirmation of feasibility

• The coordination and control of COO-Steering-Committee includes several departments in decision-making which adds the consistency to the value of idea

Platform Development

• The final product can be customized based on the customer demand

• This enables to company to amortize R&D cost

Impede

• Based on the case, an effective communication is a key driver of the integration; however there might be a lack of communication between Innovation and Platform units

• Being involved in the process of generating new ideas does not equal to oversee the experimental prototypes

Intellectual property rights • Under the IP laws, the

employer owns all the ideas generated by its employees within the company

• This could be an obstacle to the involvement of employees in the process development and motivation

Idea generation• The idea pool is accessible

only to defined group of employees, thus the final decision-making is based on a narrow perspective

• This questions the reliability of the ideas assessment

• Innovation is a core element of the process; hence relying on this responsibility of defined group is very risky

Should and should not factors• Variety and diversity of

perspectives• Focus on time saving and

expertise development• Innovation as a core

• Employees contribution leads to higher motivation

• Assuming that the communication is handled, it is a change, Recaro should commit to this change

Actions to be taken by Mark Hiller“The whole is more than the sum of its parts”

Integration and communication between all company’s units are a key elements in a success of this change

implementation