Dyson Appliances Ltd.’s Value Chain for Innovation

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Analysis of Idea Generation
Analysis of Idea Conversion
Analysis of Idea Diffusion
Synthesis of Lessons Learned
Conclusion
Reference List

Introduction

The success of organizational innovation depends on multiple factors managed within the stages of its value chain. However, unlike the traditional top-down approach of directing others, delegating tasks, and ensuring robust process control, the innovation process requires considering a certain extent of creativity and freedom. Furthermore, innovation is a self-sustainable process that evolves as new ideas are explored and validated, which usually requires taking more time to come up with a breakthrough market solution. Nevertheless, innovation as a process still should be conceptualized to ensure that its critical components are working as a single mechanism, suggesting that if one of the value chain stages is weak, the system output will be weak as well.

To explain the importance of having a consistent organizational value chain for innovation, the case of Dyson Appliances Ltd. (DAL), the world-known manufacturer of vacuum cleaners, has been considered an example of one of the most successful innovators in the UK market. For the analysis, the three analytical innovation stages of idea generation, conversion, and diffusion are explored based on the examples from the DAL activities and practices. Based on the provided evidence, the report provides insights based on the lessons learned from the analysis, which could be considered as guidance for organizations to nurture innovation.

Analysis of Idea Generation

Idea generation is the first stage of the innovation value chain model. Conceptually, ideas could manifest in different forms and exist in multiple organizational domains, including descriptions of new product concepts, solutions to pertinent organizational problems, process improvement methods, or suggestions for alternative technology choices (Kornish and Hutchison-Krupat, 2017). Considerably, ideas are described as discrete explanations for specific issues that have varying degrees of elaboration and, therefore, primarily manifest as initial or partial suggestions for the problem resolution. It also leads to an assumption that ideas normally exist within specific boundaries associated with the process of problem recognition that constrains the idea generation process. Another aspect of this stage is that one is based on dissatisfaction with the market status quo, which measures the difference between current solutions and consumer demands (Kornish and Hutchison-Krupat, 2017). Therefore, idea generation could also be related to solution spot as an alternative to technology push, where ideas are generated through identifying a narrow aspect of the problem and further used for developing a framework for continuous improvement.

In the innovation value chain, the process of idea generation analysis is deconstructed to in-house, cross-pollination, and external domains. Respectively, it is explored whether ideas are effectively generated inside the business unit, across the company overall and whether those ideas are validated using external sources (Hansen and Birkinshaw, 2007). The number of successful ideas generated per domain is commonly used as a key performance indicator, which is further used to determine the weakest component and apply specific interventions for improvement. Meanwhile, this process looks somewhat cyclical and requires further decomposition into specific activities undertaken to encourage creative and innovative thinking within a team.

Finally, it is important to reflect on the aspect of communication as a stimulus for idea generation. In the conventional organizational scenario, both teams and individuals are engaged in both formal and informal face-to-face meetings and opinion exchanges, where a token of supervision from team leaders or organizational managers exists. However, McAlpine (2018) found that teams working with greater location flexibility and less formal meetings tend to benefit from sporadic face-to-face communication, which nurtures their ability to generate ideas better (Hansen and Birkinshaw, 2007). Considerably, she concluded that capitalization on formalities and the use of electronic communication in organizational context would eventually decrease the individual potential to generate ideas, while ad-hoc requests and informal communication at all levels give more freedom for creativity.

Applying the above constructs to the idea generation process utilized and promoted by Dyson throughout his career, it is important to start with the concept of culture of innovation which was deployed and nurtured in DAL since its establishment in 1993. Specifically, it was realized through empowering all employees, regardless of their position level or engineering or non-engineering role, to come up with new ideas as they see them in the production process or anticipated optimizations. This managerial philosophy, as specified by Dyson, emerged from his personal experience of ‘frustration’ throughout his life experience, where the attention to detail that requires improvement was associated with uncertainty at the initial stage of the problem-solving path (Purkayashta and Faheem, 2009). A bright example of such an idea refers to his first experience of improving the working process of the home vacuum cleaner by replacing bags with cardboard cyclones, eventually leading to the first innovation, the dual cyclone vacuum cleaner. Eventually, the culture of innovation in DAL was also realized through the recruitment of engineering graduates with little or no experience at all while counting on their ability to be creative and identify opportunities for improvement.

Another approach used in DAL to intensify idea generation is the approach used by Dyson for organizing teams and workspace. First, Dyson decided to merge designers and engineers into a single business unit, arguing that any product idea in such an environment should emerge from collaborative thinking and the exchange of opinions. The unit was allocated in the center of the factory to ensure that employees from other units may regularly contact and discuss their concerns or proposals with them. Second, Dyson heavily invested in the physical appearance of the workplaces and outlook of employees, resulting in accurate dressing, interior design, above-the-average pay, and drive for courage and entrepreneurial thinking. Dyson was a part of the team since one regularly attended the shopfloor discussing market trends, competitor activities, and personal concerns informally, attempting to further stimulate idea generation through direct interaction, support, and opinion exchange. Hence, unlike many other engineering and manufacturing facilities of that time, DAL used a flat organizational structure that promoted creative thinking and informal communication as prerogatives of idea generation.

Finally, it is important to mention that the process of new product development in DAL at the idea generation stage was meticulous and conceptually different from the industry standards. To proceed with idea prototyping, it was not enough to simply come up with the proposal and discuss it with peers and colleagues from other departments since any initiator or group of initiators were further required to validate it externally with customers and carry out additional scientifical research. Afterward, a brief was required to be developed for future brainstorming inside a team to formalize an innovative idea. However, even after this stage was completed, Dyson emphasized the importance of design conceptualization using a paper and pencil approach, which required engineers and designers to draw preliminary sketches and use cardboard rigs before using a computerized modeling environment (Purkayashta and Faheem, 2009). The overarching idea was that any generated idea should be functionalized by questioning everything, where manual work allows finding nuances and aspects that otherwise could not be noticed.

To summarize, the case of Dyson perfectly explains how a single organization may utilize the idea generation stage of the innovation cycle through integrated activities. Meanwhile, it also contradicts the philosophy of setting KPIs for each of the domain stages; instead, it capitalizes on the importance of informality and flexibility to promote creativity, idea granulation, and teamwork. Nevertheless, the case also suggests that idea generation requires several consecutive stages before it can be functionalized, which assumes that Dyson considers idea generation as the most complex and time-consuming stage of innovation.

Analysis of Idea Conversion

Idea conversion is the second stage of the innovation value chain model. In this stage, an idea or ideas developed and crystallized during the previous stage a turned into a conceptual innovation, which includes the process of idea screening to prioritize those that will be funded for the future selection and afterward converted into new products or services (Fontana and Musa, 2017). However, the conversion process itself contains major uncertainties since it is important to conduct a backward analysis to evaluate whether an organization is good enough to screen the ideas and what the process of deployment will eventually look like (Hansen and Birkinshaw, 2007). In certain cases, an overflow of feasible market ideas might be observed, while the management team might fail to sense how the initiative meets overall corporate objectives. Specifically, there could be a major risk if an organization aggressively pushes for generating new ideas in a short period of time, chooses the best one that, hypothetically, fits the business objective, and makes significant investments without the appropriate market and competitor activity sensing.

Another aspect is to make internal validation of anticipated benefits from deploying ideas to the market. Fontana and Musa (2017) admitted that the idea conversion stage requires complete understanding that apart from a revenue-generating perspective, a new initiative should bring the company an early-mover advantage in the business segment it operates. Considerably, if several ideas are validated for the potential go-to-market stage, it is worth further decomposing those per stages of early prototyping, pilot study, and early commercialization. It will allow the structuring of ideas based on their readiness and validity in terms of design and testing, which will give a feasible priority in market deployment, as well as avoid unnecessary financial risks for ideas that still are underdeveloped and lack functionality.

The application of the idea conversion concept in DAL requires further elaboration on its CEO’s management philosophy. Apart from being adept in innovation culture, Dyson also praised the idea of incremental change. It is based on Edison’s step-by-step approach, which means that any innovation is a continuous process and requires only one change at a time to improve or upgrade an existing idea before proceeding to the next improvement. Conceptually, it refers that any new change should be stimulated through learning that leads to making another improvement iteration, with the latter leading to feedback that could be further used in consecutive improvement efforts. Dyson used this philosophy in a practical experiment amongst new university graduates, asking them to design a vacuum cleaner prototype, test one at home for two weeks, and decide whether they would like to use it forever. If a fellow engineer decided to leave the vacuum cleaner at home, it would cost £20.95 (Purkayashta and Faheem, 2009). In this way, Dyson explored the intention of employees to seek potential improvements after the first trial, intentionally overpricing the cost of materials for vacuum cleaners.

Another important part of Dyson’s philosophy of innovation is the attitude towards the use of logic and making mistakes. Specifically, all employees in DAL were encouraged to recognize the importance of continuous improvement through making mistakes and eventually being appraised for doing so. Dyson explained it through disagreement of what constitutes being logical, meaning that logic is a way of straightforward thinking that prevents individuals from making mistakes. Dyson mentioned that when people do not make mistakes, it results in being limited to consider alternative opportunities or solutions; instead, selecting a straight path of design and engineering that will not differentiate the final product from what is already offered in the market. Considerably, Dyson’s perspective on idea conversion is that one never should be considered final even if one is functionally designed since creativity requires illogical rather than logical thinking based on the past experience of making numerous mistakes.

The related managerial views are well illustrated in the case of Malaysia when DAL expanded both manufacturing and business operations for vacuum cleaners to another country facing local government resistance to approving advanced motor models for new products. In Malaysia, there was a heavy presence of the U.S.-produced models of vacuum cleaners, while DAL managed to eventually outperform the market based on the considerably better product quality despite higher prices. While the revenues were overall satisfactory, Dyson envisioned the forthcoming risk from Chinese manufacturers, who tend to innovate less, copy more, and therefore learn how to improve existing products rather than invent new items (Purkayashta and Faheem, 2009). Hence, his decision was to keep on with new innovations, eventually leading to introduce an innovative model of hand dryers and the constant launch of new motors for vacuum cleaners.

To summarize, the idea conversion principles promoted in DAL are rather strict while effective since designers and engineers are encouraged to follow the principles of incremental innovation even after the functional part of the new idea is already documented. It follows the previous assumption of formally dividing ideas into three stages of readiness, while there is no requirement for thinking formal; instead, illogical assumptions and unpredictable ideas followed by mistakes are praised. Finally, in line with the innovation value chain, DAL emphasizes envisioning future risks even if the effort appears to be successful, anticipating that market competition in developing markets has a tendency to intensify.

Analysis of Idea Diffusion

Idea diffusion is the third stage of the innovation value chain model. In this phase, companies take responsibility for the effective innovation spread across the target market, aiming to attract the attention of target consumers while also bearing in mind internal capabilities and market preparedness. Hansen and Birkinshaw (2007) admitted that diffusion as the last part of the value chain requires a cross-market consistency rather than the distributed effort that might diminish the potential of a new idea. Furthermore, a clear link between current and previous stages is required to be recognized as a value-generating opportunity rather than a quick win effort.

The case study of DAL suggests that idea diffusion will never occur unless specific verification activities are accomplished. Specifically, there is a preceding specification activity that requires creating vision and engineering perceptions used for production purposes and consequent evaluation and testing, as well as durability analysis followed by the pick-up tests to conform with the industry analysis. It was mentioned that robust statistical and engineering techniques among engineers located both in UK and Malaysia were applied prior to the idea diffusion so that the errors in design are eliminated. Overall, the case demonstrates that the majority of innovations offered by DAL were favorably accepted by the market, while certain constraints were communicated with respect to having perfect marketing rather than absolutely perfect technological composition.

Specific examples of idea diffusion recognition in DAL include the following. An expert opinion suggests that Dyson revolutionized the market by introducing reliable and well-designed products based on thought-through technologies, including a vacuum cleaner and apparel products such as hand dryers and essential components of the washing machines. The focus was particularly made on vacuum cleaners that were not attempted to be revolutionized for almost 90 years. Furthermore, the flexibility in making appropriate design choices, open communication, and flat organizational structure was praised as a non-traditional approach in operations management by Ernst & Young. The effort of ‘building business from within’ as a matter of commercial success empowered with the ability to nurture creativity, responsibility, and teamwork were also admitted as some of the core organizational competencies in DAL. Currently, Dyson’s company continues its innovative pathway through the development of robotic vacuum cleaners, which confirms the advantage of an innovative perspective in business under the pressure of changing consumer preferences.

Synthesis of Lessons Learned

Reflecting on the innovation value chain model benefits and constraints, the evidence from the case study, and intermediate observations, it was found that DAL is a perfect example of nurturing disruptive innovation. Moreover, considering that the case majorly reflects on the organizational practices that were explored and introduced more than a decade ago, it could be considered a good reflection for contemporary startup ventures and recommendations for entrepreneurs. To consolidate the lessons learned from this activity, the following major points were identified.

First, there is a significant relevance of the case examples to the conceptual model proposed by Hansen and Birkinshaw (2007), while there are also specific differences that confront the idea of using this model as a uniform representation of the innovation value chain. Specifically, it was identified that Dyson avoids setting robust KPIs while managing his organization, understanding that creativity cannot be nurtured through the ‘market push’, where the percentage of accepted ideas would inform revenue volumes and, moreover, could not be used for the formal productivity forecasts. In practical context, it means that innovation value chain theory should be used only as a starting point for the analysis of particular organizational activities when it comes to assessment of innovation, since nowadays many organizations adopted their own practices that are yet to be described through comprehensive frameworks and industry-based examples. However, in theoretical context, it means that new explorations on the academic level are required to learn on how organizations develop their ideas internally based on the recently successful projects that were driven by holacratic leadership and flat organizational structures.

Second, the case itself is an inspirational evidence of how entrepreneurial activities initiated from the personal ambitions and ability to collaborate with professionals in technical field might help to succeed in business internationalization. Dyson has started the company back in 1993 with a small group of engineers and released the first product that captured market interest in less than 1 year, further capitalizing on nurturing innovation, building productive relationships, and engaging young talents in a team of designers, engineers, and scientists. Further, Dyson was able to expand its business operations overseas with a risky maneuver of partially relocating part of operations to Malaysia, which was majorly criticized during the inception while further adopted as one of the most advantageous alternative choices in home appliances business development. Finally, DAL still remains one of the market leaders with a recent focus on robotization of home appliances, which means that the innovation pathway of the company is still on the rise.

Third, the people-management ideas outlined in the case demonstrate that innovation-driven teams require less direct supervision to generate productive ideas. In this way, the joint team of engineers and designers in DAL might be compared to the contemporary agile teams, that operate in circles and therefore do not require direct control or subordination. Specifically, it means that Dyson has potentially envisioned the need for reorganizing hierarchical approaches used in production environment to achieve better output that are valid for the future product commercialization. Moreover, it was advantageous to understand that any innovative product requires risks in terms of recruiting innovative but less experienced specialists, who might be a feasible source of information and ideas required for product-to-market processing. However, the case does not disclose the approach towards training efforts except for the vacuum cleaner challenge of testing and eventual purchasing, which might require further exploration of the UK talent market.

Fourth, the case shows that UK still experiences major issues with providing employment and development opportunities for engineers comparing to the other European countries. Since Dyson was forced to abandon its foundation after a decade of persuading the UK government on the necessity of providing targeted and purposeful education for the engineering students, it looks like the country has a major problem with developing its technically educated pool of professionals. Unfortunately, given the importance of promoting engineering, research and development, it is a versatile problem that potentially lies in the idea of low enrollment rates. However, the clarity of such assumptions should be further verified against the studies in the other countries, as well as more extensive analysis of the current company operations.

Conclusion

Overall, the analysis suggests that Dyson will keep leveraging on his charisma as a business leader to develop the culture of innovation in DAL, currently concentrating on the robotization for the home appliances. It is likely that the company will engage with a certain form of partnership with Japanese manufacturers, given Dyson’s regular visiting the country and receiving recognition awards. Unfortunately, it is not the good news for the UK that struggles to develop its engineering talent and support one of the most remarkable startups of the past centuries in its efforts to assist the students and employees interested in experimental engineering. Hopefully, such attitude will change if the appropriate collaboration mechanics are arranged in terms of market coverage and restored demand after pandemic times.

Reference List

Fontana, A. and Musa, S. (2017) ‘The impact of entrepreneurial leadership on innovation management and its measurement validation’, International Journal of Innovation Science, 9(1), pp. 2-19. doi:10.1108/IJIS-05-2016-0004.

Hansen, M.T. and Birkinshaw, J. (2007) ‘The innovation value chain’, Harvard Business Review, 85, pp. 121-130.

Kornish, L.J. and Hutchison-Krupat, J. (2017) ‘Research on idea generation and selection: implications for management of technology’, Production and Operations Management, 26(4), pp. 633-651. doi: 10.1111/poms.12664.

McAlpine, K.L. (2018) ‘Flexible work and the effect of informal communication on idea generation and innovation’, Academy of Management Proceedings, 1. doi: 10.5465/AMBPP.2018.205.

Purkayashta, D. and Faheem, H. (2009) ‘Dyson Appliances Ltd. and its approach to innovation’, No. 609-038-1.

Click Here To Order Now!