Learn More The board of directors is selected from different plants, with every member of the board coming from different departments of different plants. In so doing, the board is composed of a variety of individuals with vast experiences ranging in all aspects that pertain to the interests of Nypro Clayton, Once through, the development teams are disbanded and Continuous Improvement teams set in place to analyze manufacturing, procurement of materials and marketing. Once the product is released to the market, a business review committee is set up to follow up on the success of the product.

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The company encourages innovation at both the individual and plant level. At the individual level, the company seeks to encourage top performers to remain with the company by bringing them into an equity plan. The company feels that by giving top performers equity in the company, they will be encouraged to stay. Performance ratings are part of the formula for determining equity. The degree to which innovation is specifically incorporated in the performance measures is unknown, but the underlying theory is that top performers are mostly likely going to be the main sources of innovation in the company.

Plants compete with each other, such that a plant that is seen as an innovator is revered by the other plants, who will then emulate the best practices of the innovator. The corporate culture also supports innovation at the company-wide level. This competition encourages individual members of the company to innovate in order to achieve the highest performance ratings and in order to stand out as an excellent performer.

In addition, the culture of innovation and competition plays a role in attracting the types of workers who are oriented towards innovating and towards winning. This reinforces the drive for innovation within the company. Competition is encouraged through the use of information. Lankton has the information compiled and distributed throughout the company. Comparisons are always between plants or units, rather than individuals or vs.

This highlights the need to be better than the other plants. Assignment Another element of the internal market for innovation at Nypro is the orientation to delivering results for the customers. The company does not reach the stage of "mature main street" where it is operating well and content to do so, but rather the internal competition between plants and top talent keeps the company at the "early main street" level where it is seeking to leverage innovation for strong growth.

This mirrors the efforts of Lankton to keep Nypro as a whole at that level Moore, , 2. In total, Nypro becomes focused on innovation as an end rather than a means. It does not directly reward innovation, but rewards it indirectly. Innovators become stars in the company, and a track record of innovation is eventually rewarded with equity in the firm.

It is an honor within the firm to be a plant that received visitors from other plants who seek to emulate innovation. This is important, because there is no long-term source of competitive advantage for any plant as a result of innovation -- the need for standardization of inputs and outputs precludes innovation from being a source of long-term advantage. Instead, the only long-term reward is prestige. The leader of a firm can play a key role in innovation, by setting the tone for the organizational culture and by making innovation a priority, as has been the case with Apple in recent years CNBC, Lankton manages the process of innovation at Nypro in a couple of key ways.

The first is by promoting the corporate culture of competition. He is intensely competitive and communicates that to the employees. His degree of competition attracts competitive people, which improves the overall competitiveness of the organization. In addition, Lankton utilizes organizational structure in order to encourage competition. Another tactic that Lankton uses to drive innovation at Nypro is to base much of the corporate strategy around innovation. This itself sets the tone for the company.

This is one of the most important things a CEO can do to encourage innovation -- set the tone that innovation is a top priority. For Nypro, Lankton has built the organizational structure around innovation, as well as human resources policies. He talks about it -- he wants people at the company to think about it.

This ingrains innovation as part of the culture, and reinforces that culture every day at Nypro. NovaPlast represents an opportunity to maintain a rapid growth rate. It appears to meet the needs of both Nypro and the customers, who are demanding decreased lead times for orders.

The technology will eventually be rolled out across the entire company. What Lankton needs to determine is the best way to conduct this rollout. He can reward top-performing plants with a NovaPlast machine, or he can purchase enough for all of his operations in the initial order.

Another option would be to build a plant that only used NovaPlast machines. A final option would be to not use a NovaPlast machine at all. If a single NovaPlast plant is built, this will not meet the needs of either NovaPlast or its customers. In addition, the internal competition between Nypro plants will be skewed. The NovaPlast plant will outperform, leading the others to want NovaPlast as well.

If they are refused, they will be condemned to always losing. For competitive people, this would not be satisfactory -- Nypro could lose some staff and have the remaining staff become disengaged from innovation because of the inherent disadvantage. If NovaPlast is not purchased, then Nypro will face a situation where its competitors may use the NovaPlast machine to outperform Nypro. This option, which would see NovaPlast at only one plant, will put the machine to the test in the internal competition.

The downside is that Lankton appears to see the merits of the NovaPlast now -- the internal competition would be a waste of time because he already knows that NovaPlast is a significant technology improvement. The final option provides all firms with NovaPlast. This does not discourage innovation, but rather allows the internal competition to continue on even footing.

The organization will not be learning what it already knows that NovaPlast is useful , it will instead be learning on a plant-by-plant basis a string of best practices with regards to the new machines.


Managing Innovation at Nypro, Inc. (A)

Revised December More from these Authors Integrating Around the Job to Be Done Clayton Christensen, Rory McDonald , Laura E Day and Shaye Roseman Unlike traditional market segmentations that are based on a correlation of product sales or service with the attributes of the purchaser such as age, gender, income level, and education level , jobs-based segmentation seeks to understand the causal roots of purchase—when a buyer needs to "hire" a product or service to get a "job" done. This note details the thought process and the methodology behind a jobs-based segmentation and provides numerous examples. It highlights three levels in the architecture of a job: 1 What is the fundamental job or problem the customer is facing? This includes political, functional, emotional, and social dimensions; 2 What are the experiences in purchase and use that, if all provided, would sum up to nailing the job perfectly? The "hiring criteria" ; and 3 What do we need to integrate, and how must we knit those things together, so that we can provide these experiences? Revised July


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