BUSINESS MANAGEMENT
Globalization brings numerous opportunities to businesses because of the increased market share and growth. However, mass production poses a threat to limited resources and the environment which necessitates sustainable innovation to meet the needs of future generations (Henry, 2006). As such, manufacturers and producers have to implement environmental standards and regulations regarding sustainable development. Particularly, they invest in R&D in sustainable, eco-friendly innovations to cut the operation costs and meet the environment standards. Nonetheless, such projects face risks and failure due to the newness of the concept due to the low success rate of sustainable projects, especially in closed industries (Storsul & Krumsvik, 2013). Domtar Company in North America has seen success in the adoption of the of eco-ecology projects in its production process (Hanna, 2011). As such, the paper will apply the seven dimension of innovation strategy to analyze the factors that led to the success of this company. Besides, it will differentiate between invention and innovations due to the prevailing misunderstanding both in writing and presentations (Burns & Stalker, 2001). This has led to ineffective communication in organizations and business sustainability. Notably, these words stand for different and valid concepts in the organization (Davenport et al. 2006). Particularly, the invention can be defined as the creation or introduction of a product or process for the first time. On the other hand, innovation is said to have happened on the occasion(s) when one improves on making a significant contribution to something that has already been introduced (invented) (Cooper, 2011). As such, the invention is widely viewed as easy while innovation is a genius/accidental undertaking (Azevedo, 2014).
Eco-innovation, therefore, involves the development of products and processes that contribute directly to the sustainable development of the entire organization, applying the commercial knowledge to elicit direct or indirect ecological improvements (Hanna, 2011). This concept, however, does not narrow to environmental sustainability only but involves a range of factors ranging from technological advances to socially acceptable innovative paths towards sustainability (Carrillo-Hermosilla et al. 2009).
Many studies show that implementation of eco-innovation strategy within the scope, quality and requirement is a challenge for most organization. As such, demand for an innovative environment strategy that effectively control and monitor the risks involved in the new venture is important in organizations (Scharmer & Kaufer, 2013). For example, with the improved technology and continuous campaigns in protecting our trees, the paper industry may have suffered terribly in trying to ensure sustainability in the market(Burns & Stalker, 2001). The actors in this industry would indefinitely close down their firm as they lacked alternative ventures and innovative products to invest in (Carrillo-Hermosilla et al. 2009). Necessity would, however, push companies such as Domtar Company to introduce strategies for the implementation of the eco-innovation for sustainable operation and profitability.
Seven Dimensions of Innovation
Essentially, the seven perspectives framework for strategic change aids a company to meet its growth goals with the time frame. Besides, it helps the projects keep up its scope, quality and requirement among other aims of strategic goals. The strategy is quite versatile in application to meet new growth, develop new products and new ventures as well as markets among other strategies as illustrated by figure.1 below. The ensuing discussion applies the seven aspects of the model to the eco-innovation efficiency strategy in the Domtar Company.
Figure 1
Source:http://biorganization.weebly.com/the-innovation-framework-with-seven dimensions.html
Managed Innovation Process
This aspect encompasses the approaches employed in managing the innovation process based on past experiences and results from field analysis. Particularly, this feature looks at the market trends, customer and competition analysis to meet the needs of these stakeholders. In the case of Domtar Company, it focuses on sustainable management pooling the inputs if innovative staff and experienced organizations. Specifically, it partnered with the Recycle Bank to produce energy from waste materials. This will aid the company in reducing operation cost due to low energy costs and conserve the environment because of reduced fossil fuel intake, hence, driving up its profits (Hargadon, 2013).
Strategic alignment
This approach involves sharing of the company's goals with the shareholders, management and the all the workforce, society as well as auxiliary companies among other stakeholders. This helps in reducing change resistance, faster decision-making process and cooperation of different stakeholders through participatory management. Here, Domtar Company involves its interested parties in the eco-innovation strategies with the key stakeholders. A case in point is its collaboration with Recycle Bank and Forest Stewardship Council (FSC) to improve cross-functional operations in the company.
Industry foresight
Based on the fact that industry influences the actions taken by each firm’ about products, market share and prices, the seven dimension innovation framework underscores the need to evaluate trends, growth drivers and dislocations. This helps the firm meet the market needs and increase its market share. For the case of Domtar Company, the strategy is evident in its Annual Report on Form 10-K that outlines the strategies, market outlooks and trends among other features of the industry it operates in. Particularly, based on the industry foresight report Domtar set out a strategic plan to diversify its paper, pulp and infant diaper businesses worldwide while introducing the energy production business (Gagnon &Pirvu, 2011). This will increase the company’s market share.
Consumer insight
Bearing in mind that businesses set out an operation to meet customer's needs, it is only rational to conduct surveys to understand the demand patterns, preferences and tastes of the potential and existing consumers. As such, this aspect analyzes the diverse needs of the targeted customers to increase the sales and growth of the business. In this case, Domtar Company has continuous committed resources and expertise in satisfying customers' need through improvement quality and safety of its product. Particularly, the company measures the customer satisfaction indicators regarding on-time shipments, cost of quality, and claim rate and inventory availability in products such as the pulp and paper. Evidently, its consumer insight was instrumental in winning Green Award from Office Depot in the year 2012. The company has a customer statement “Buy Greener; Be Greener; Sell Greener” initiative as part of its customer insight strategies. The client's insight in Domtar is evident in financial performance that entails sales totaling to US$5.5 billion annually.
Strategic dimension of core technologies and competencies
This strategy focuses on the pre-existing factors in the organization that can give it added advantages or cut the costs of the assumed projects. Particularly, the organization' competitive strengths, qualified and experienced staff as well as the financial capabilities among other drivers in the company. Notably, these factors act as the leverage to meet the goals of the projects such as innovations, creating brands and cutting off operation and production costs. As such, Domtar financial and expertise prowess aided it adopting advanced technology in its manufacturing process. Particularly, it funded and later acquired an innovative Lignin-Recovery Technology; the technology generates water for the plant. Moreover, supported by its financial performance it has adopted several computer systems to boost its communication (Johnson, 2014).
Organizational readiness
This evaluates both the structural, financial, management and psychological readiness among other organizational preparedness before venturing in a new project. This is essential in reducing project failure and in dealing with the consequential impacts on politics, finance and operation costs. The new strategies in eco-innovation- Domtar Company has shown its diverse readiness to bring about new strategies through acquisitions of related technologies such as the water production and renewable energy production (Fussler & James, 2006). Besides, the new project has led to the financial gains that were optimally used in the long-term and the short-term projects efficiently.
Disciplined implementation
This concept defines the organization's capacity to carry out a set project within the budget, time frame, scope and quality as well as yield the expected goals. Domtar has exhibited this principle in its eco-innovation- One of the principles of Domtar is maintaining a balanced and disciplined approach to capital allocation for investment into the eco-innovation strategies. The company's healthy cash flow and dedicated management make sure the implementation meets all the requirements in its eco-innovation projects such as the energy production venture (Hargadon, 2013).
There are several eco-innovation changes adopted by Domtar Company such as repurposing, nanotechnology and replenish that aim as sustainability (Fussler & James, 2006). Particularly, a change on energy production through the use of by-products to made the company self-sufficient in energy (Walshok & Shragge, 2013). On repurposing strategy, Domtar Company is reinvesting its revenue to repurpose the production mills from the traditional, outdated paper products to the highly demanded products like fluff pulp. This has been an effective strategy towards enhancing sustainability in business (Hargadon, 2013). Still, it has also ventured in nanotechnology where they develop tree-fiber-based nanotechnologies that produce attractive products due to tensile strength. Besides, it is leading the industry to take on eco-innovation and hence staying ahead of the curve (Byars, 2005). This improves its performance while continuously venturing in new industries and technologies that boost its sustainability, brand as well as revenue.
Sustainability innovation models
They aim at identifying and advancing the change ideas and as well discerning the motives that drive sustainable innovation changes. Some of the most common models are the familiar linear innovation model, technology push, market pull and the Phase Gate Models (Clinton, 2014). An organization may use a specific innovation model or an aggregation of two or models. Linear innovation model involves various steps towards innovation (Moon, 2014). The steps involved in this case are basic research- applied research- development and the production/diffusion (Cooper, 2011). This model provides timeliness in its existence and the ability to deliver simple, descriptive, predictive and assessable guidelines. It ensures that the innovation process is highly organized for successful implementation providing detailed information (Fussler& James, 1996). Application of this strategy at Domtar can be sited with the energy optimization process model where the initial basic research into the energy optimization requirement was responded to through the applied power generation innovation and engineering expertise. Domtar Company has gone further to seeking partnership with the energy companies to produced renewable energy. Domtar has therefore used the linear innovation model through enhancing its Research and Development (R&D) department. Domtar mills which include Plymouth and Kingsport have approached the research and experiment phase on the waste steam with the slogan ‘Waste not, want not.' The company holds that one man's trash can be another man's treasure (Moon, 2014).
Technology push innovation model is an improved type of the earlier linear innovation model. This model adds the concept of marketing and sales as they are seen as important elements of innovation. It improves the marketability of the products through improved technological know-how (Clinton, 2014). Domtar Company, in this case, invented on marketing its brand-name through improved product to the market and adapting to the necessary changes. The technological push model operates to ensure improved services to the market through brand improvement (Moon, 2014).
Market pull model involves the application of research and development efforts in responding to a market needs. This model is, therefore, the modification of the line model which deals mainly with research for development. Market pull innovation model, therefore, responds to the force calling the industry to respond to the perceived unsatisfied needs. This model involves various steps towards implementing full innovation (Clinton, 2014). The steps include identification of market needs, development initiation to satisfy the needs production of the improved products to satisfy the needs as identified and finally the sales of the product developed (Martin, 2009).
The phase gate model on the other hand attempts to put across the possible feedback loops to innovation. It appreciates that not all innovations may be attractive to the customers and the environment. It, therefore, strategies on the how the different feedback loops and time variations can be dealt with to ensure efficiency (Martin, 2009). This model is an improvement in risk management where it is assumed that an unexpected occurrence may occur in the course of the innovation process.
References
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