In this case study, Fuchshofer Präzisionstechnik GmbH (approx. 70 employees), with a very advanced technological knowledge in the field of high-precision manufacturing (working mainly as a subcontractor of companies from automotive and space industry sectors), is supported by a coaching team of industrial fellows of Cambridge University and innovation & change agents of i2m. Their role is to help provide a foundation from which to make the successful transition into the development of Fuchshofer’s own products, thereby implementing for the first time a product-driven innovation strategy.
The traditional business of Fuchshofer is to win contracts, usually from Large Enterprises, for the production of specific parts of e.g. cars or airplanes. Although the Company’s high technical knowledge allows it to maintain a good positioning in this market, the dependence on external factors is still relatively high, and there is exposure to a range of associated risks.
In this context, the Company’s management did an analysis of the available resources and capabilities, along with the potential products and markets that could be addressed. They identified an innovative product that would best fit its needs: it would be ’its own’ product, highly technological, covering a huge market need and with a high ROI.
However, Fuchshofer thought a step further and recognised that a more structured innovation management process compared to the existing one would help them a lot, to significantly speed up the realisation of their product ideas.
In order to take full advantage of its innovation potential, and with the aim of securing its production site and its market positioning for the future, the Company approached the co-coaching initiative driven by IfM ECS Limited, a wholly owned subsidiary of the University of Cambridge (UK), and i2m (AT) to collaborate on the systemic development of a strategy with a clear focus: sustainability and impact. The overall objective was to design and implement a viable plan at Fuchshofer to take full advantage of the Company’s potential to identify and implement innovations. A functional platform was developed and deployed and the whole organization was involved in the innovation process.
Stage 1: DIAGNOSIS STAGE (duration two months)
In this stage i2m coaches and Fuchshofer were the main actors. A lean systemic 360° organisational analysis was applied to examine the structure, processes and culture of Fuchshofer in a holistic manner. To ensure objectiveness and thus avoid any bias that would impair conclusions drawn i2m was leading this activity. This also helped to keep Fuchshofer’s time efforts as low as two days in total. Additionally, a compact analysis of the Company’s external environment including benchmarking with relevant peers was also made as well as a target market analysis. The data collected was jointly explored by i2m and Fuchshofer, in order to better understand the often complex and fast changing external context and drivers, to shape a common understanding of the current business strategy and to define a shared company vision within the Company. The coaches’ role was to help Fuchshofer to thoroughly understand the principle of interdependency — that change in one part of a system affects the other parts — the outstanding characteristics of organization development compared to classical expert consulting approaches.
Stage 2: PRIORITISATION AND ACTION PLAN DEVELOPMENT STAGE (duration: Three days)
The main actors involved were Fuchshofer, as well as the coaches from IfM-ECS and i2m, who worked together intensely to identify the key priorities for the Company by means of interviews with Fuchshofer’s key management personnel and observation of plant activities, along with an initial action plan to help address these priorities. Priorities here mean what are the “order winners” that enable the specific SME in its particular sector to outsmart competitors (e.g. demand management, quality or delivery) and what are the business constraints (e.g. plant & equipment, people & information or cash) that hinder further growth. In concrete terms a comparison of priorities and practices was made with the Company’s management team to show how resources are allocated and whether or not this reflects the Company’s priorities. Also, the implications of continuing ‘as is’ were assessed. Proposals for an improved “future state” were identified. Areas requiring urgent attention and those where resources are allocated unnecessarily in order to efficiently improve in a focused approach, were also included in the functional innovation platform developed to improve Fuchshofer’s business activities.
A prioritised action plan was developed with the management team to assist the company to reach its desired level of performance.
Significant knowledge transfer from University to Fuchshofer took place during this stage to align the Company’s management team view how to best manage the constraints the Company faces while maximising the performance of order-winning capabilities. i2m also participated here, as it was responsible for taking the results and conclusions reached and map them into an actionable action roadmap for their future implementation. The Company’s limited available resources were sensibly taken into account in there as well.
Stage 3: CHANGE AND IMPLEMENTATION (duration: ongoing)
In this stage, the responsible party is i2m in close cooperation with Fuchshofer. During this phase, several detailed activities have been planned and executed in order to implement the action plan developed in the previous stage. Firstly, internal organisational measures have been agreed and introduced, addressing the highlighted order-winners as well as business constraints requiring attention to efficiently improve Fuchshofer’s functional platform to reach its desired level of performance. i2m also safeguards that if implementation of the action plan developed risks to slow down, targeted support of IfM-ECS is received to speed up the process again.
Secondly, processes and tools for early detection and adoption of new ideas are designed and introduced, including the absolutely new focus on developing own products (partly for completely new markets). In addition to this example, the implementation of several other measures related to boost the overall innovation performance (e.g. systematic integration of customers, partners and external innovations into own product & service development process, innovation management performance, involvement of employees in the innovation process at all levels, etc.) are also started.
Touch point 1: Personal meetings
For an SME used to implementing its strategic activities for many years, without external consultants (i.e., University and Technology & Organization development SME), to understand the potential of developing own products and implementing structures to unlock its innovation opportunities were critical. The CEO needed to build trust in these completely new ways of thinking and fully support the implementation of change within the organization. At the same time, this was one of the bottlenecks within the project, as the availability and response time of the Management was slow, especially at the beginning. Once the objectives had been defined and the project started to be put in place, the need for personal meetings faded and other forms of communication were implemented.
Touch point 2: Collaborative communication tools and collaborative development
In the diagnosis stage, an important touch point was the use of online communication tools (in this case, tele-conferencing using WEBEX and TeamViewer and shared file services using OwnCloud). The access of all participating parties (mainly both SMEs) to the complete information was essential to monitor the progress, success and impact of the measures agreed. The monitoring of milestones and deliverables was also made easier for all parties through these tools.
The bottleneck, in this case, was the establishment of far too ambitious deadlines. In this sense, Fuchshofer and its employees needed more time than expected to also cover this work in addition to their pressing daily business. However, once they managed to free some resources, they supported the current activities enthusiastically.
These experiences also allowed Fuchshofer to implement new tools for its collaboration with lead users for its own products, to be able to understand their requirements and thus develop specific products focusing on customer solutions.
Examples of similar ‘Diagnose & Prioritisation’ engagements have been seen across a range of major funded programmes, e.g. in the UK with programmes such as
- Sharing in Growth (Aerospace sector): (http://www.sig-uk.org/ )
- Civil Nuclear Sharing in Growth (http://namrc.co.uk/services/sig/ )
- PrISMS (http://www.ifm.eng.cam.ac.uk/news/prisms-programme-publishes-preliminary-results-of-its-work-with-uk-smes/#.WKyb6zqmmUl )
Furthermore, compared to other University knowledge transfer projects as well as co-coaching projects and being analysed with the Assessment Tool for University-Business Collaborative Research Partnerships (U-B Tool) developed by the European University Association (EUA) in the context of the FP7 project “European Universities Implementing their Modernisation Agenda (EUIMA)” (see http://ubtool.eua.be/), the project could contribute to Fuchshofer in several aspects.
Firstly, from a strategic point of view it could allow to increase its R&D capacity and, especially to gain access to academic and organisational expertise.
Secondly, the project addressed very deeply structural factors, which will contribute to implement new organization processes to detect innovation and by providing a new orientation to the SME towards the manufacturing of own products.
Thirdly, in the area of “facilitating aspects” the SME experienced the potential of a trustworthy coaching relationship, the commitment and interdependence with partners and the advantages of working in a network with open innovation approaches.
For Fuchshofer, there were three main tangible success factors:
Firstly, to make a transition from a company working exclusively on a contract manufacturing basis into a company that successfully offers contract manufacturing and complementary own products in parallel. Fuchshofer has taken substantial advantage of learning from the solutions IfM-ECS has developed for the individual needs of technology-intensive SMEs in more than 1000 coaching projects, over the last 15 years. Significantly, the co-coaching team of IfM-ECS and i2m has helped to efficiently use lean identification of business priorities and to implement smart business strategy development and implementation-management tools.
Secondly, the objective was to implement a systemic innovation management system that shall allow the company to identify, optimize and implement further products as a result of a strategically implemented innovation process.
Last but of no less importance, Fuchshofer also strived for coaching that clearly focused ONLY on these core elements of their company, that actually form the “functional platform” for their business activities. This clear focus causes less efforts and less investment and therefore saves precious resources of SMEs - their time and money.
For IfM-ECS, the main success factor was to learn from the implementation of its over-15-year-proven knowledge transfer methodology and know-how derived out of its most recent research result,s whilst supporting the technological SME in an effective way and with a clear objective: to deliver tangible impact in the most efficient way (e.g. minimal time requirements of management team, lean approach to identify valuable insights, outstanding domain knowledge to quickly understand relevant external drivers). An Industrial Fellow from IfM-ECS engaged with Fuchshofer’s management team, reaching a common agreement on the challenges, and highlighting the key priorities on which they needed to focus. This led the way to develop a structured view of prioritised potential improvement paths. Furthermore, a clear action plan with specific next steps was proposed. In summary, the University managed to deliver clear knowledge transfer to the SME that will help provide a foundation from which Fuchshofer can consolidate and grow in the future.
The primary role of i2m, the SME specialised in innovation-driven organisation development, was to set up a systematic process of implementing the actions planned for strengthening Fuchshofer’s functional platform for its business activities, as well as designing the accompanying easy-to-digest organisational learning process. This continued support for effective implementation is one of the key benefits of this co-coaching approach of IfM-ECS and i2m. The client is not left alone in this implementation phase that is critical for the success of the entire coaching initiative!
Additionally, a tailored innovation process, well-aligned with the existing company structures and processes, was jointly designed to help Fuchshofer to develop its first own product, in the leanest way possible. This especially includes the development of capabilities for developing innovation partnerships to satisfy the Company’s increasing needs of external sources of expertise, technologies and innovations. Moreover, the support to design and implement approaches of how to create and manage alliance-based business models (including specific product-technology marketing tools) was also started.
The overall success factor was the very effective collaboration of all the actors involved, which was made possible through the use of collaborative (e.g. tele-conferencing like WEBEX, shared file repositories like OwnCloud) and OI tools (e.g. Online Project Management Tools or Evernote or Trello).
For Fuchshofer, the main barrier was that it was confronted with a new way of doing business and manufacturing products. Although it was already a very successful company in its market niche, the CEO was so ambitious and had such a clear idea of what he wanted, that he managed to overcome many internal barriers (e.g. to motivate his management team as well as key personnel and still find enough time to work on the development of their first product in parallel to the very pressing daily business). He was convinced that the only way to guarantee growth was to change the habits of the company, through setting up an additional potential revenue stream and create and implement a process that guarantees a constant innovation feeding into that stream.
A further barrier was the existing reluctance of Fuchshofer regarding external consulting. Unmet expectations in previous projects have led to this reserved attitude. In this sense, the courage to trust external experts made the project a complete success.
In order to be successful in co-coaching projects, one of the keys to success is to be fully open to the potential opportunities arising. No prejudices about the possible result should be taken beforehand. Additionally, one’s own interests have to be clearly defined and the interests and motivations of the other partners must be taken into account.
On the other hand, the analysis to be done by the University and other external parties has to be critical but also in the framework of the realistic possibilities of the Company. The outcome has to be tangible and the implementation plan needs a flexible timeframe. Finally, the participation of the management and decision-making personnel is critical.
It is important not to impose an action or activity on the SME that it cannot or does not want to implement. Often the border is very thin and the flexibility has to be there as change needs time. In this sense, do not expect fast answers and do not exclude any party from the communication process: transparency is essential.
