Strengthening BASF’s innovation culture is a key element of the chemical company’s business roadmap for 2020. As part of its program to accomplish this, management enlisted the CIMS Innovation Management Maturity Assessment (IMMA) tool.
The IMMA is a diagnostic tool that allows managers to plan and measure the impact of their innovation initiatives (http://cims.ncsu.edu/tools-assessments/im-maturity/). It reviews management competencies in ideas, markets, portfolios, platforms, and projects; it assesses them in relationship to the company’s strategy, organization and culture, processes, tools and techniques, and metrics.
“Assessment will help our business units measure the innovation culture and identify changes to create a culture that can adapt to the 2020 business environment,” BASF Technical Director Kenneth M. Perry told the Fall 2011 CIMS Sponsors Meeting. Here’s his latest report:
BASF is a large multinational chemical company with 14 divisions or strategic business units in Europe, Asia- Pacific, North America, and South America. Our North American strategy for 2020 included goals for new markets and an increased effort for innovation. Top management felt there was a need to increase the company’s performance in innovation if we were to continue to outpace the chemical market in growth and profitability.
Specifically, we need to keep pace with the rate of change in the market and with technology. BASF leadership felt we were not fully leveraging internal knowledge between the business units, we were not participating widely enough in the Open Innovation arena, and we needed to have plans in place to bring products to the market that would complement the upcoming changes brought on by mega trends. BASF wanted to explore trends in health and well-being, food and nutrition, clean energy, and issues of mobility and sustainability.
Consequently, an innovation team was formed with the objective of improving our innovation performance and overall innovation culture. The team consisted of technical leaders for each of 14 strategic business units and for Human Resources, Communications, Information Services, Future Business, and various marketing associates.
The team reviewed internal and external innovation processes, with emphasis on two of BASF’s strategic program objectives: “Innovation Beyond R&D” and “Sustaining an Innovation Culture.”IMMA was selected as the assessment tool to begin our analysis because it covered multiple competencies and functions, was flexible and scalable.
Running a Pilot
We decided to run a pilot prior to full implementation to allow for a more rapid start and to obtain key learnings early. We had some previous experience with the IMMA but many of the business units and the leadership were unfamiliar with the tool. The business unit selections were made to cover a variety of business types, business unit size and innovation maturity.
The five pilot business units conducted up-front awareness training and leadership buy-in workshops, administered the survey, and then conducted workshops within and across business units to develop action plans. These plans are being tracked by the business units and the innovation team and shared with additional business units.
We are now conducting a second phase of implementation to include six more business units as well as two corporate functional support groups. A follow-up assessment is planned for the first pilot groups.
Using the Heat Map
The IMMA produces a heat map (shown above) that is used as the
basis for the discussion on areas for improvement and action plan priorities. In reviewing the data, scores are assigned from Ad Hoc as a rating of 1 up to a 5, signifying Optimized. The data can be sorted based on flexible demographics determined during the pre-survey design discussions. Demographics such as business unit, function, location, and seniority can be assigned. Workshops were conducted internally for each business unit and results were compared among business units.
The business units varied in their responses, sometimes significantly by function or seniority. Inside of the business units, there were large differences by function and by location. In most cases, leadership had higher ratings for culture, organization and strategy than the second-level managers and all lower levels of the organization. Position seemed to have more of an influence than seniority.
Most of the business units were unaware of the tools or metrics used in other functions. In the workshops there was discussion on how leadership demonstrated support for innovation in all functions and how culture was being defined. This led to a review of best practices for reward and recognition programs and for ideation and idea development processes. From this we were able to identify best practices for all areas of the assessment, which in turn allowed us to find experts and easy-to-implement solutions.
One thing that became evident during the discussions was IMMA’s usefulness in providing a common language and a baseline for meaningful discussions. Prior to administering the assessment it was often difficult to decide where to begin discussions and to be sure we were talking about the same issue. We often referred back to the questions to determine if different groups were perceiving a question in different ways. IMMA helped us get to a common starting point and a common reference language.
The assessment was administered to most functions in order to look beyond research and development. In follow up discussions, it became clear that many groups did not understand
that innovation should be practiced throughout the company, not only in R&D, and that our action plans were not addressing the entire organization appropriately. As a result of our pilot program “Innovation Beyond Research and Development” has become a program to address these concerns.
BASF was looking for a method to evaluate where our innovation process and culture were and to find a method for sustaining continuous improvement. The IMMA has given us a common language, a basis for discussion, collaboration, and best practice analysis.
As a result, BASF believes it can become more proficient at recognizing market opportunities and providing solutions that will accelerate our growth plans.
The major findings for the corporation were to be confident that all functional areas and all employees understand the corporate strategy and their role and purpose in implementing this strategy. This needs to be communicated frequently and in many forms.
We also need a comprehensive and business-wide idea development process that involves all functions; the tools used to administer our processes should be robust, and we need to ensure we provide proper awareness, training, and sufficient experts to maximize their use.
We need to have measures for all important aspects of our strategy and we need to have a rewards and recognition program that promotes and sustains the sought–after behaviors.
We also recognized that to sustain our programs and continuously improve them we need to document our findings and develop Innovation Advocates and Facilitators to improve our performance even more.
Kenneth M. Perry;
Technical Director, BASF Corp North America