Management of Innovation (MMOI): Centlec Innovation Strategy Report

This report provides a comprehensive analysis of innovation within Centlec, a South African electricity distribution company. It begins with an executive summary and introduction, followed by an examination of global and industry trends impacting innovation. The report delves into factors influencing innovation strategy, the alignment of innovation with corporate strategy, and identifies significant barriers to innovation, proposing solutions to overcome them. A model illustrating Centlec's strategy is presented, along with a PESTLE analysis to position innovation. The report includes an action plan for developing an innovation culture, the utilization of systems and technologies to support innovation, and a description of the application process, including financial and team performance impacts. The conclusion summarizes the key findings and recommendations, supported by a list of references and figures. The report emphasizes the need for Centlec to transition from a "top to bottom" to an exponential thinking approach to foster innovation and drive growth, particularly in light of challenges like alternative energy sources and the need to meet customer demands.

(Management of
Technology and
Innovation)
Management of
Innovation
(MMOI)
Post-Module
1

Work Cover Page
List at least five online references:
Author(s) Book, Journal or Article
Baumgartner,
JP 2010
Report 103: Anticonventional thinking: a new way
looking at creativity, 5 January, 2010, viewed 3 April
2012,
<http://www.jpb.com/report103/archive_20100105.php>.
Govindarajan,
V, Trimble, Ch
2010
The other side of innovation: solving the
execution challenge, Harvard Business Review Press, United
States of America
Morris, L., 2007 Creating the Innovation Culture: Geniuses, Champions,
and Leaders‟, Innovation Labs, October 5, 2009, viewed 22 March
2018,
<http://www.innovationlabs.com/publications/creating-the-
innovationculture/>.
Bon, A.T. and . Impact of total quality management on innovation in service
2

Mustafa, E.M.,
2013
organizations: Literature review and new conceptual framework.
Procedia Engineering. 53. pp.516-529.
Johnston, M.W.
and Marshall,
G.W., 2016
Salesforce management: Leadership, innovation, technology.
Routledge.
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Table of contents
Table of contents........................................................................................................ 4
List of figures.............................................................................................................. 5
List of Tables............................................................................................................... 5
1.Executive Summary ................................................................................................ 6
2. Introduction ........................................................................................................... 6
3. Analysis of global and industry trends............................................................7
4. Factors that impact innovation strategy..........................................................8
5. Alignment of innovation strategy with corporate strategy...............................9
6. Innovations barriers and propose to overcome the same................................9
7. Ways to overcome with innovation barriers..................................................10
8. Model to illustrate the strategy.....................................................................10
9. Innovation is positioned (innovation is positioned as a key business process 11
9.1Innovation positioned by PESTLE Analysis ...................................................12
9.1.1 Political landscape............................................................................................ 12
9.1.2 Macro-economic factors.............................................................................12
9.1.3 Green energy .................................................................................................. 12
9.1.4 Consumer behaviour....................................................................................... 12
9.1.5 Legislative change ......................................................................................... 12
10. Action plan to develop an innovation culture..............................................12
11.Utilisation of system, tools and technologies to support innovation .............15
12.Description of the application process..........................................................15
12.1 Financial impact........................................................................................ 15
12.2 Team performance impact........................................................................16
13. Conclusion ................................................................................................. 16
References ............................................................................................................... 17
4

List of figures
Figure1: Developing idea for
innovation……………………………………………………13
List of Tables
Table 1: The innovation culture table 1 …………………………………………
14
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Executive Summary
To transform invention successfully into innovation requires a range of complementary activities,
including organisational changes, company-level training, testing, marketing and design. Innovation
drives growth and helps address social challenges. Electricity distribution is an aspect of the utility sector
that is very essential to the smooth and meaningful development of a society. It supports the economy
and promotes the well-being of individuals. Efficient functioning of this utility is of paramount
importance for the sustenance of its growth and consequential realization of its planning and
managerial objectives.
The work is based on CENTLEC (Soc) Ltd. Organisation. CENTLEC is currently a license holder and
distributes electricity to over 180 000 customers in the Mangaung, Kopanong, Naledi, Mohokare and
Mantsopa and Mohokare Municipalities.
The next sections will discuss the introduction to Centlec. Further, Analysis of global and industry trends,
factors that impact the innovation strategy , alignment of innovation strategy, innovation barriers, ways
to overcome innovation barriers ,model to illustrate the Centlec strategy, Innovation positioned by
means of PESTLE analysis, action plan to develop innovation culture, description of the applicable
process. Lastly, the conclusion. In view of the above, Centlec research and development unit is non-
existence although the provisions has been made on the organizational structure. Linear thinking still
applicable to Centlec management. However, the intention of the work is to convert the pyramid from”
top to bottom approach” to exponential thinking.
2. Introduction
Innovation is known as the process in which enterprise add new features in its
existing products in order to make it more useful. This increase attractiveness of
product and influence a large number of customers to buy the same (Franks and
Vanclay, 2013). Today, to sustain in the market for the long run and to get
competitive benefit it is very important for the firm to implement innovation. The
concept of management of innovation contains set of methods and tools that help
managers to cooperate with a common understanding of goals. Centlec, an electric
utility company based in Bloemfontein, South Africa is taken in this report for study.
Different barriers that come during implement innovation and alignment of
innovation strategy with corporate strategy is all given in this.
3. Analysis of global and industry trends
Today there are new far-reaching trends such as globalization, increasing
competition between organisations, flattening of organizational structures, which
are developing at a brisk pace. Obviously, these trends affect the way this world
rolls.
Anywhere in the industrialised world, various efforts are done to conserve electricity
and do some innovation with it which is very difficult. The second one is come
from, the downturn in revenues of consumer energy on both sides of Centlec.
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Mainly innovate and economise are the two trends in the electric industry. The
growth of revenue is continuous slowing and as per the EIA, this will remain same
for the next coming years (Mehrabani and Shajari, 2012). All this reflect macro-level
trends, the various reason is given by EIA for this downturn such as replacement of
old types of equipment with new one, more efficient stock, implementation of
efficiency standards, changes that place in technology, modifications in various
appliances and lighting.
Today, high-speed communication networks support innovation through the
economy much as electricity and transport networks spurred innovation in the
past .The south African government should also foster ICTs, in particular broadband
networks, as platforms for innovation by upholding the open, free distributed and
dynamic nature of the internet. In view of the above, Centlec has installed fibre
optic in their network that has spare capacity and might be used to increase
revenue base by collaborating with third party internet service providers.
Common economic space is shaping where industries‟ structure, exchange of
information and technology, geographical allocation of productive forces depend a
lot on the global situation. Moreover, globalisation brings together business and
consumer cultures of different countries and international communication
increasing.
Economic and demographic elements drive this trend consists slowing population
growth and shift of economy toward less energy-intensive sectors. Innovations that
take place in power sector such as smartphone-based apps, new storage battery
options all are surprising adapters and developers as these are advancing at a high
speed. Today, customers are asking for these type of products. In this situation,
industry leaders integrate innovation with infrastructure and business operations on
a fast speed. In this situation, a major challenge before Centlec is to close the
demand gap and offer value to customers to generate more profits. With this firm
can retain customers for a long time period. Alternative energy becomes a major
challenges and contributor to the decline of Centlec revenue.
Human capital is the heart of innovation. Empowering people to innovate relies on
far-reaching and relevant education as well as the on the developing of wide -
ranging skills that balance formal education. Universities, vocational training
centres and colleges are essential nodes in the innovation system, both producing
and attracting human capital needed for innovation. According to the global
innovation index for 2017, South Africa ranked 57. Implies that as South African we
are not doing great in terms of Education and maintenance of the infrastructure to
address the service delivery mandate. Local municipalities were confronted with the
service delivery protest for almost two years necessitated by lack of service
innovation.
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4. Factors that impact innovation strategy
Various elements are there that affect the process of innovation and its strategy
chosen by the firm. Management practices, resources available and organisational
motivation all these are the elements that affect the innovation either positive or
negative way (Lin, Che and Ting, 2012). These factors can be better understood by
the following points:
 Management practices: Practices and particular actions of company's
management affect innovation that consists freedom in work practice, strategic
goals, offer a challenge, develop work teams that consist various type of skills
and knowledge (Donate and Guadamillas, 2011).
 Freedom: This consists determine what to do and how to do, control and monitor
on activities of an individual.
 Challenging work: Sense of doing hard work on important projects and
challenging tasks largely affect the implementation of innovation in the workplace
(Foray, David and Hall, 2015).
 Managerial encouragement: When top management of firm serve a good and
effective model of work, provide his support to employees, value contribution of
individuals, show confidence then all this enhance the creativity of employees
and also increase its success chances (Baumgartner, 2010).
 Support of workgroup: A group of skilled and knowledgeable workers help in to
develop a creative and unique idea and provide various other benefits.
 Sufficient resources: When staff members have easy access to appropriate
resources such as materials, funds, information and facilities then this help in
implement innovation in an effective way and also support to get all benefits
related with it (Bon and Mustafa, 2013).
 Organisational encouragement: An organisation culture that motivates
employees to improve their creativity by providing a healthy work environment
and also provide recognition to them (Bon and Mustafa, 2013). All this boost up
the process of growth and innovation.
 Resources: It is very essential for employees to have the resources required to
develop and implement innovation idea (Govindarajan and Trimble, 2010).
In view of the above these are the major factors that largely affect the innovation and
its implementation at the workplace (Franks and Vanclay, 2013). In order to develop an
effective innovative idea and to implement the same in the enterprise in a better
manner, it is very essential for management of Centlec to examine all these factors in
order to assist to identify right approach and the right time to implement innovation.
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5. Alignment of innovation strategy with corporate strategy
The company is creating innovation with the corporate strategy. Centlec performs
innovation keeping the corporate strategy. It creates innovation strategies and
plans so that company can easily accomplish the objectives and strategies
(Madhoushi and et. al., 2011). For example Centlec employee or manager is
creating an innovative idea and suggestion and this helps the company in achieving
the goals and objectives. Thus, as a result, it can easily enhance the activities and
thus it can easily maintain a unique position in the market.
The utility objective is to provide electricity to all persons in less time, then it has to
create strategies according to this objective. This company can create an innovative
plan to create such a technology so that it can provide electricity at a cheaper rate.
Thus, as a result, they can deliver electricity to all people. Therefore, they can save
the time and in less time electricity can reach to all users. Through this, it can
create various plans and policies and thus they can easily accomplish theory
objectives. Hence innovation is directly related to the corporate strategy.
It is very important for organisation to use right tools and techniques. Through using
of innovative tools it can achieve the objective that is to maintain a good image in
the market (Donate and Guadamillas, 2011). The utility can also use latest
technology and tools as an innovative tool so that it can easily deliver electricity to
all people living in all parts of the world. For these reasons, they can easily
accomplish all goals and objectives. Hence they can maintain a positive image in
the industry.
6. Innovations barriers and propose to overcome the same
Innovation barriers that require to be removed to enable staff members of Centlec
to take the firm into growth. Following are the main barriers to innovation:
 Traditions: Results of the past should not be used by the enterprise in order
to forecast future success. Low barriers to entry and new technology have
developed a cluttered playing field. It is essential for the company to keep its
traditions but those require to be aligned with the vision that a firm develops
to response to the changes take place in the market.
 Capital Budget: Huge funds are required by the enterprise to implement
innovation. Different type of research must b firm wantse carried out by
research and development department of the entity in order to identify the
concept which to explore. Agility to establish the R&D unit will play a pivotal
role in terms of the innovation landscape. It is very important for a manager
to examine the risk related to the concept of innovation so that the manager
can choose a better and effective idea through innovation processes. To
implement innovation, it is very essential for Centlec firm to have an
adequate amount of resources and chose the right skills.
 The technology is a main barrier in the innovation.
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 Lack of skills and capabilities of employees at workplace.
7. Ways to overcome with innovation barriers
It is clear that enterprise faces various issues while implementing the concept of
innovation and it is very important for the company to deal with all in an effective
manner forget all benefits related with concepts of innovation (Noruzy and et. al.,
2013). Further, it is very essential for Centlec management to create and provide a
healthy work environment for employees as this will enhance their creativity and
help to develop an innovative organisational culture.
Innovation enablers:
 Vision: This is known as one of the most powerful enablers of innovation. To
create and maintain a competitive position, it is very essential that vision of
firm should provide a competitive solution to help in dealing with the issue of
customers.
 People: Innovation cannot take place without a unique mind of individuals.
Workers work in an enterprise are the one that develops creative ideas which
support in provide featured and quality good to customers.
 Resources: Funds are known as one of the most significant and important
resources to implement innovation in the workplace. Other than this,
experience, time and equipment are also refer to an effective source to
implement innovation.
8. Model to illustrate the strategy
It is very important for the senior management to develop an effective plan and
follow a strategy to implement innovation in the workplace. The following key
principles should be considered by the management of Centlec to implement
innovation:
 Develop the customer program: It entity wants to innovate something
new then it is very essential for the company to analyse it from customer's
point of view as this increase the success chances of product (Keupp, Palmié
and Gassmann, 2012). This help to attracts and retain customers for a long
time period.
 Have an innovation strategy: it is very essential for a firm to know why it
is implementing innovation, is company wants to achieve growth or wants to
enter in new markets. This provides direction to the manager and also help in
utilising all resources at an optimum level. The mission of CENTLEC is to be
the best electricity provider of choice in the province. This missionary post is
anchored in its nucleus belief that through asset reliability and fast pacing
electrification programme can be brought about.
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 Utilise a combination of innovation models: So many models of
innovation are there which can be utilised by the manager to innovate
successfully and generate a number of profits. With this, the company can
explore or develop more and at the same time can generate more revenue
for the utility.
9. Innovation is positioned (innovation is positioned as a key
business process
Innovations is important on various levels and for various reasons. On one hand,
innovations play an important role for the world society as it drives economic
growth. Thus, it leads to increasing of living standards and welfare. People get an
opportunity to make their life more comfortable. Strategy in management is a
unified, comprehensive and integrated plan designed to ensure that the basic
objective of the utility is achieved. Positioning is one of three approaches to
strategy, the others being resources and opportunity (De Coster, 2010).
In today's business environment where needs and wants of customers change on a
fast speed and every day a new technology or software is developed, implement
the concept of innovation is an essential task for a business firm. No matter which is
the sector in which company deal or what is the size of the enterprise, innovation
becomes an essential part of every business firm. This is the only activity that helps
firm in attracting more and more customers towards its products (Foray, David and
Hall, 2015).
Further, this makes the entity different from its rivals and support to get a
competitive position in the market. In addition to this, a number of other benefits
are there which can get a company after implementing the concept of innovation. In
this case, it is very essential for to manager to formulate policies and strategies that
help in position the process of innovation as a business process. Innovation cannot
be implemented at the workplace without the support of top management so top
manager requires to support the concept of innovation and also require to allocate
proper funds so it can be implemented in an effective manner. Further, innovation is
not a one time process, it should be implemented at the workplace on a continuous
basis so the company can utilise all resources and at the same time can attract
customers towards its product.
Innovation positioned by PESTLE Analysis
Pestle is a framework for marketers used to analyse external marketing
environments of companies such as CENTLEC (PESTLEAnalysis.com (2015). Five
different inter related environments different inter related environments can be
look over, including political landscape, macro-economic factor, green energy,
consumer behaviour , legislative changes
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9.1.1 Political landscape
The political landscape will always have a bearing on CENTLEC – an ever
changing environment requires robust plans for service delivery.
9.1.2 Macro-economic factors
South Africa’s competitiveness, international and national economic factors
have a bearing on electricity demand, pricing of feedstock and cost of electricity
– influencing CENTLEC’s cost and revenue base.
9.1.3 Green energy
The current shifting supply and demand patterns within the electricity and
energy generation space has the potential to change the game – influencing
CENTLEC’s revenue base
9.1.4 Consumer behaviour
Rising electricity costs, Climate change and other factors are starting to shift
consumer behaviour – away from traditional forms of electricity usage to more
cost and environmentally friendly alternatives like the PV roof tops and other
forms of alternative energy.
9.1.5 Legislative change
NERSA ESKOM, SAPVIA and SAREC industry shifts and other changes again
influence the environment within which CENTLEC exists.
10. Action plan to develop an innovation culture
Morris (2007) defines innovative culture as “an expression of people, their past, and
their current beliefs, ideas, and behaviours. Further, Morris (2007) compares status
quo culture with innovative and this comparison gives an understanding which
features are inherent to innovative culture in table 1 below.
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