Managing Innovation: A Business Report on Rolls-Royce Company

This report provides an in-depth analysis of the innovation process within Rolls-Royce, focusing on the drivers of innovation and how the company cultivates an innovation culture. The study examines the development of the 103EX model, highlighting the role of the marketing department in generating innovative ideas. It explores the HRM practices employed by Rolls-Royce to foster this culture and includes an innovation audit to identify strengths and weaknesses. The report emphasizes the importance of communication and knowledge management in implementing changes, outlining an innovation roadmap for developing new products and services. It also discusses the use of new software to enhance efficiency and capability during innovation implementation. The report covers topics like environmental concerns, customer needs, technological advancements, and social factors influencing Rolls-Royce's innovation initiatives. It also touches upon the company's approach to R&D, team structures, and external focus areas, including global market expansion and sustainability goals. The report provides insights into Rolls-Royce's approach to fostering innovation through employee diversity, research, and development.

MANAGING INNOVATION
IN BUSINESS

Executive summary
This study provides in-depth knowledge of innovation process. The report contains various
driver of innovation and also analyse the way these drivers force organisation to establish
innovation culture in organisation. To conduct study we have chosen luxury auto mobile leader
Rolls-Royce. Report include all the stages of development of 103EX model, which is one of the
ambitious car of company. Rolls-Royce got the idea of making this car from its marketing
department which shows its innovation culture. Study gives all information about HRM practices
adopt by organisation to cultivate the culture.
Assignment also provides keen information about innovation audit that will help Rolls-
Royce in identifying their strength and weaknesses. Also, it will lay emphasis on how better
communication and knowledge about the operation can help firm in managing and implementing
changes. Study will highlight about the innovation road map that will assist company in
successfully implement the new and creative changes. It will help them in developing of new
goods and services so that consumer loyalty can be created. For better understanding of
innovation various new software will be used by company. It will help firm in building better
efficiency and ability during the time of implementing innovation.

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Drivers of innovation in Rolls-Royce.................................................................................1
2. Innovation road map and analysis of leaders to successfully plan for innovation.............5
3. Importance of organisational knowledge, knowledge transfer and cross functional
cooperation in order to analyse and assess innovation capabilities and blockages..............10
4. Identification of new product for Rolls-Royce.................................................................13
5. Activities in innovation Audit........................................................................................15
CONCLUSION..............................................................................................................................19
References......................................................................................................................................20

INTRODUCTION
Innovation is process of applying new idea and imagination in reality to bring
improvement in product and service. Innovation is very much essential element for any
organisation because of cut throat competition and increased customer expectation, which force
an organisation to practice innovation, otherwise company can lose its market share and goodwill
in market. Present study discusses about need of innovation in organisation. Study also describe
various activities in implementing innovation. Study provides innovation audit of Rolls-Royce
which is very big name in making luxury cars. Company is situated in United Kingdom, it is a
subsidiary of BMW. Unique feature of Rolls-Royce is, it makes cars on special demand by
customer, which are highly customised and demands more innovation in product.
1. Drivers of innovation in Rolls-Royce
Auto mobile industry has large contribution in UK economy. Rolls-Royce practice
innovation identification approach to know about factors that demands continuous innovation in
organisation. Organisation take help of technology to get the information about customer
innovation expectation, like Computer-Aided Personal Interviewing (CAPI), Online/web
surveys, Mobile phone surveys, chatbot, Functional Magnetic Resonance Imaging (fMRI) and
Social media monitoring/listening. Company keep its eyes on competitors so that it can know
about its R&D needs. Royal Roy ask to its employee to share their innovative ideas based upon
their experiences. It uses look to the past policy in which idea which are kept aside in the past,
are taken forwarded, for instance RR abounded the idea for offering boron steal car to customer
because that was costly manufacturing process to company that time, but now company decided
to take forward the idea because now it has the technology which can helps company to maintain
its cost. Company also practice out of the box thinking for future need fulfilment. External factor
also forces the company to take innovation initiative, information of these external factor are
gathers from observation, data logging, reporting and inspectors. Company identifies need of
more automation and efforts less driving improvements in its car from above sources.
Following are the main drivers of Rolls-Royce innovation:
Environmental issue like global warming, carbon emission, air pollution, smog, acid
rain, harm to human health and biodiversity are the current key issue which grab the attention of
almost every industry. Rolls Royce recently test its latest eco aero engine, environmental friendly
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production machine and process, to reduce energy consumption it uses wasted power back
policy. Company have hold DIN ISO 50001 certification for this.
Satisfy customer need is one the characteristic of innovation, which is also taken into
consideration by Rolls-Royce. Customer now have high expectation due to increased awareness,
high disposable income, standard life style. Company make innovation regarding leather colour
matched with customer dress and accretions, it also offers picnic seats in its special edition cars.
Rolls-Royce have so many strong competitors like GE, Pratt & Whitney, United
Technologies AND Honeywell. Customer can easily switch their buying decision therefore
company always add something which is not offer by its customer yet, for instance company
recently launch New Rolls-Royce Phantom car which have unique dashboard glass that can be
use as canvas for art lover.
Auto mobile industry is highly sensitive to technical changes, because these changes
affect the customer satisfaction deeply. Technology not only change driving experience, it also
contributes to save cost, resources and help in maintain the earth's health. These care have unique
night vision system with pedestrian warning, besoke audio system, Satellite Aided Transmission
which use GPS to sense the traffic and other physical feature of road so that gear can easily swift
according to gathered GPS information, which eventually helps in maintaining the engine health
and life. Most prominent social factor which is affecting the Rolls- Royce is environment issue,
customer's expectation with company, customer age group and work culture. Company eagerly
welcome people with different culture and accordingly it alters its organisation culture.
Task Mode Task Name Duration Start Finish Predecessors
Auto
Scheduled Sales of business 95 days Mon 06-02-
17 Fri 16-06-17
Auto
Scheduled
Analysing the market
requirements 20 days Tue 20-06-17 Mon 17-07-
17 1
Auto
Scheduled
generating innovative
ideas 30 days Tue 18-07-17 Mon 28-08-
17 2
Auto
Scheduled
discussion with seniors
and managers 40 days Tue 29-08-17 Mon 23-10-
17 1,3
Auto
Scheduled deciding the cost 10 days Tue 24-10-17 Mon 06-11-
17 4
Auto
Scheduled making effective plans 20 days Tue 07-11-17 Mon 04-12-
17 2,5
Auto
Scheduled selecting ideas 36 days Tue 05-12-17 Tue 23-01-18 6
2

Auto
Scheduled
developing the computer-
aided personal
Interviewing
40 days Wed 24-01-
18 Tue 20-03-18 3,7
Auto
Scheduled online survey 80 days Wed 21-03-
18 Tue 10-07-18 8
Auto
Scheduled social media analysis 69 days Wed 11-07-
18
Mon 15-10-
18 9
Auto
Scheduled
Functional magnetic
resonance imaging 60 days Tue 16-10-18 Mon 07-01-
19 9,10
Auto
Scheduled Felxibility plan 12 days Tue 08-01-19 Wed 23-01-
19 11
Gantt Chart:
UK Automotive industry share £82 billion turnover, which is a significant contribution,
it also encourages the leading luxury car manufacture to bring required changes as, there is high
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scope to earn high market share and profit. Change in trend force organisation to alter its product
and service periodically, otherwise product can face threat of being obsolete. Nobody wants to
purchase an outdated product. Company set amazing blend of royal texture and technology by
using AI, sensor and other technologies ruling in trend. Nature of leader also influence the
change, like leader who is dynamic, adventurous and energetic personality, will try to absorb
change frequently. Also, promote and encourage the same in organisation.
Political change as Brexit is milestones change which not only affect the car industry but
almost every business. Brexit will affect trade relation with other countries, which eventually
affect the supply chain of company. Immigration limitation can arise shortage of skilled worker,
company has to move to local recruitment and selection. May be possible, these local people do
not have the skill, education and experience exposure, which is essential to work with Royce. In
such case company need to change it training and development program too. And it also hurt the
foreign investment. it will lower the current capacity of company by change in employment legal
compliance, fluctuation in currency exchange rate etc. company administration changes and
expense will rise as WTO Tariff is supposed to enlarged by 32%.
Porter five forces influencing Rolls- Royce
threat of new entrance
Luxury car industry is capital intensive as industry demand high capital investment for
research and development. And given industry is relay on advance technology, which required
continuous R&D. Apart from it experience and network should be strong for company which
wants to do its business in luxury segment. These factors, minimise (Low) the threat of new
entrance for rolls- Royce.
Threat of substitute product
Rolls- Royce car has uniqueness in quality, technology and royal experience, which is
hard to get in other product. Also, no other vehicle can render the same satisfaction as peroneal
luxury car. So company faces low threat of substitute.
Bargain power of supplier
There are so many suppliers are available which render the standardised product and
having low switch cost. Company can easily move on to other supplier in case of high price and
poor material supplied by supplier.
Bargain power of buyer
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Roll- Royce earned a goodwill, prestige and reputation attached with its cars. Also, it has
high product differentiation along with lavish quality. So, In case customer wants to purchase the
car of quoted company, it has to pay the amount demand by company. It indicates customer do
not have significance power to force company to bring change in pricing.
2. Innovation road map and analysis of leaders to successfully plan for innovation
Rolls-Royce can engage in making use of innovation road map in order to attract and
retain more consumers. For this they can make use of strategic leadership and human resource
management. This will help them in managing and coordinating the various functions of
organisation. Innovation road map process includes the following:
Define: Rolls-Royce company for creating innovation needs to define and scope the
innovation opportunity (Tidd, Bessant and Pavitt, 2015). For making unique image in the
environment, organisation needs to get involve in doing market analysis in search for various
opportunities. It can be in the form of problem, need or want of customer. They need to also do
keen evaluation about their competitors.
SWOT help in know the opportunities and threat of company, these tow influences the changes
like firm will move further where it identifies scope to grow, where treat force organisation to
bring improvement otherwise it may lead to big failure. Organisation's strength and weaknesses
also driver of change like good financial position encourages the Firm to bring more positive
changes, where weakness wants restrung to eliminate these. Following is the SWOT of rolls-
Royce, which shows its change drivers too.
.
Strength
 Strong technological support.
 Old reputation and goodwill.
 Owned Status symbol positioning.
 Over the globe presence.
Weakness
 Profiling requirements burden, cause
customer switch.
 Fairly similar car design.
Opportunities
 Move to environmental friendly luxury
Threat
 Very huge premium price demands by
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car.
 Liberalise the Profiling process.
 More technology in luxury car.
company.
 Political changes like BREXIT.
Innovations in the car industry vs innovation in company
In June 2014, Google launched its ‘Android Auto’, a telematics software that can be
connected to car dash board for infotainment. It also enables the driver to access GPS, maps,
streaming music, weather, and a host of other applications. A slew of car-makers including
Abarth, Acura, Alfa Romeo, Audi, Bentley, Chevrolet, Chrysler, Dodge, Fiat, Ford, Infiniti,
Jeep, Kia, Maserati and Volvo will offer Android Auto in their cars Industry. While in the Rolls-
Royce company they are building the future of flight with our Advance and UltraFan technology,
pioneering innovations that are setting new benchmarks in efficiency, environmental
performance and precision engineering.
For identifying the innovation opportunities company needs to see that management of
the people is influenced by the proposed new solution. Also Rolls-Royce must make the
communication plans to make employees familiar with the new creation they are going to
implement in their products. It will help employees or workers in better understanding the
changes made in goods and services. Also, organisation while defining innovation can make use
of ethnography that includes qualitative discussion with consumers about the new creation. It
includes the questions related to if customer is liking new product or service, are they satisfied
with it or not.
Discover: Rolls-Royce while making road map for innovation can discover new ideas.
For this company can communicate with consumers and employees about the changes they want
to see in their goods and services. Also, it will support them in getting new and creative ideas
which can support organisation in increasing their brand name. It can also allow firm in
enhancing their revenue and profit. For getting new techniques or ideas firm may ask workers to
do the brainstorming and find ultimate solution to the problems. Also, Rolls-Royce needs to
make sure that the innovative good they are building is according to the needs and demands of
consumers (Tidd, Bessant and Pavitt, 2015). Firm can also make use of TRIZ and biomimicary
software for getting new ideas and solution to the problems. It will help company in making
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understand the innovation done by them to the large number of people. The ultimate goal is to
develop large number of ideas and concepts.
Future of the industry
Rolls-Royce, creates trust for customers, and that can be drawn from contextual data sets
in the outside world. They're focused on how can take those deep data sets and apply advanced
data innovation techniques to them in order to generate value – both for our own business, in
terms of operational cost savings and efficiency gains, and for customers, in terms of how
support new services can help them operate their businesses and make better decisions
Key staff in Rolls-Royce
Rolls-Royce hires employee’s from the diverse culture as diversity is the most essential
element to achieve a culture performance which is high and is also enabler of innovation. The
main objective of firm is to increase awareness and understanding of all employees of the value
of diversity and inclusion. Build diversity and inclusion into the way they work and Drive
commitment to diversity and inclusion.
Develop: Rolls-Royce must be engaged in developing designs and concepts for
experimentation. This phase is totally based on the previous stage of generation of ideas. Idea
been selected by the company is developed in this phase. In this stage the ideas and innovative
techniques are been formulated in the concepts. The facts and concepts are than been made
understood to the employees and workers so that proper implementation of innovation can be
done in the firm. The ultimate solutions are than tested by participants based on their reliability
and viability while considering business objectives, goals and resources. It is one of the most
important step in the innovation road map. Firm needs to lay keen emphasis on it. Also, effective
communication must be done by company during the time of implementation of the innovation.
Research/patent put into action
A method of determining a fuel delivery fault in a gas turbine engine is provided to Rolls-
Royce as a patent. It has an engine consisting of a combustor, for delivering fuel to the
combustor, and a turbine which is driven by hot gas from the combustor. The method includes
comparing a measured turbine gas temperature profile against a predicted turbine gas
temperature profile. The method further includes comparing a measured fuel delivery flow
number of the combustor fuel system against a predicted fuel delivery flow number of the
combustor fuel system.
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Rolls-Royce start-up accelerator and incubator
Rolls-Royce database is going to launch a database in London. The programme will
provide mentoring and technical support to startups specialising in the areas of advanced
analytics, artificial intelligence (AI), Internet of Things (IoT) and block-chain, among other deep
technologies.
Research and development
The R&D department is engaged in applying the expertise knowledge to improve the
performance and efficiency of product.
Structure and team work
Rolls-Royce is following the divisional structure. They hire culturally diverse people and
motivates them to achieve there task in teams.
Key drivers leadership and profitability
Product of the company is current key drivers. Firm has suffered from severe loss last
year. They have hired executive team for managing and leading changes.
External focus 2020 and beyond.
Rolls-Royce have a global target to reduce the energy functions by 30% till the year
2020.
Sphagetti network innovation
Rolls-Royce have communicated through the press release that they are expanding there
global market share of authorised service centres of its corporate care.
Demonstrate: Rolls-Royce can develop working model map process. They can involve in
keenly analysing and evaluating the innovation that has been developed by them. Also, firm can
engage in demonstrating changes implemented by board of management. This can support
industry in knowing the drawbacks and loopholes which has been seen in the product. Industry
can engaged in developing products and services according to the needs and demands of
consumers. Also, firm must make sure that the employees and workers have keen knowledge
about the innovation that has been implemented by the Rolls-Royce. This will allow them to
make consumers aware about the same. During the planning session of this phase, we will
carefully create a project plan with experimentation objectives, methods and scope of
experimentation along with milestones, budget and resourcing. A control plan and reaction plan
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are created to deal with various consequences. This will support organisation in managing and
controlling the functions that needs to be done during the time of implementation.
Rolls-Royce can involve in demonstrating the satisfaction of customer by asking them
frequent questions on changes made by them. This will support firm in making relevant changes
and also will help firm in creating consumer loyalty towards the services and goods imparted by
them. It will assist industry in making understand the innovation done by them to the large
number of people. The ultimate goal is to develop large number of ideas and concepts. Also,
company needs to engage in measuring the satisfaction of consumer through the innovation
made by the company.
Organisation and leaders plan for innovation
An organization innovation engage the plans and strategic management implementing and
developing. It is involves stakeholders. Rolls Royce company stakeholders participate in the
process of making clearly and logically plans that all employee understands. They are creating
innovative strategic plans given inputs plans. They are easily create and systematically
adjustments conversation provide their business structure, like bottom up and top down.
Innovation planning create the strategic goals and mission into strategies plans in their firm.
Strategies and management innovation.
The Rolls Royce company assigned to develop and strategic plans and that is alignment
given and across their business.. These requirements can be completed when there is stop activity
in their organization. They have ensuring alignment with strategies and operational creativities.
Leaders need to realize to good management. they have making plans to distribute to company.
A business in increasing input plans, and those that given input plans. The Rolls Royce company
establishing innovation plans create for unforeseen condition and change the market situations.
They want to better plans for their company so leader is came into new idea's and unconventional
viewpoints (Steward and Conway 2014). The company innovation process of relevant
participated stakeholders, and they have make plan very clearly and logically plans that all
employees understands. An organization have the able to process to developing plans and
integrated strategic plans using for improve business innovation and their performance.
Broad search for ideas
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