Implementing a Radical Innovation Framework at GEA
Why radical ideas stall inside a large manufacturer, and what to change
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Presenting the innovation framework findings in a meeting room
- Client
- GEA, Søborg
- Context
- Bachelor thesis, BEng (diplomingeniør), DTU
- Year
- 2024
- Role
- Co-author
- Team size
- 2
- Grade
- 12
- Tools
- Semi-structured interviews · Affinity mapping
- Contribution
- Team of 2, everything done jointly, from the interviews to the framework
Bachelor thesis, graded 12. An investigation into why radical innovation stalls inside GEA's Søborg department, built on semi-structured interviews and a survey of the relevant staff, and concluding with a proposal for a radical innovation HUB that gives radical ideas a different route through the organisation than incremental ones.
The question
The stage-gate model is still the standard in large established firms, and a worldwide survey from 2013 found that 63.5% of participating firms used a stage-gate approach, however the same model is widely criticised for producing incremental innovation. This means that a firm which needs radical innovation in order to grow over the long term is potentially running the exact process that prevents it, and the question we took to GEA was whether that was happening in practice and where specifically it went wrong.
How we investigated it
We used the double diamond as the overall structure, and the investigation itself was driven by semi-structured interviews which were then turned into an affinity mapping for the analysis. Furthermore we ran a survey across the relevant roles in order to support the interview findings with something broader, and the two largest groups answering were R&D at 35% and product owners at 39%, followed by product managers at 13% and the centre of competence at 9%.
What we found
The first problem sits at the very front end, since ideas are approved on traditional business cases, and this is due to radical ideas carrying uncertainties that a business case cannot answer at that stage, which means the more radical an idea is the earlier it dies. The second problem is that every project then has to move through a version of the stage gate model, which is notorious for reducing risk and therefore producing incremental results. Here the survey backed the interviews, as 30% of respondents reported moderate resistance to risky and radical ideas in the idea evaluation, while 24% reported high resistance and a further 24% very high. Furthermore there was a general lack of knowledge about radical innovation among employees, and the interviews turned up a resourcing pattern that seems to matter as much as the process itself, described by one participant as most successful companies having 100 individuals working on one product, while at GEA there is typically one person working on 100 products.
What we recommended
We proposed a radical innovation HUB, which acts as an alternative route for people who want to propose more radical ideas, so that these are not put through the same front end as an incremental optimisation of a spray drier. Instead of evaluating on a business model, the HUB runs a learning plan, and it is staffed by people who already have experience with innovation projects, since the companies that have applied this structure typically use research managers and senior scientists in those roles. It is important to note that the evaluation criteria matter as much as the structure, since the HUB should assess technological feasibility, potential applications, impact on people's lives and market potential, while specifically avoiding the criteria GEA currently uses, being current customer needs, current strategy, financial hurdles, current structure and current business model. This is due to radical projects often creating new markets or disrupting existing ones, which by definition does not align with what current customers are asking for today. Here we also suggested factoring in how passionate the team behind an idea appears to be, since we observed that one of GEA's riskier projects had already made it past the initial barriers by winning a startup competition.
Limitations
It is important to note that only managers were interviewed, which potentially introduced bias, and while the survey was run in order to mitigate that, roughly half of the relevant staff answered it, so some uncertainty remains in those results.
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Affinity map of interview quotes clustered into themes on a wall
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Diagram of the proposed two-path stage gate framework