Innovation and its Relationship with ADvTECH

Through gaining an understanding into the brand ADvTECH we are now going to look even further into the company and what their relationship with all things innovation is! Innovation culture, drivers of innovation, innovation processes, the innovation value chain, how specific stakeholders influence innovation and finally their barriers and enablers of innovation. This may seem like allot to take in, however, follow on and each topic will be broken down and defined.

 

Innovation Culture

Firstly we will be discussing what Innovation Culture refers to. In the below image you are able to see the words broken down which may help with comprehending the term.

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image taken from: http://gettingsmart.com/2014/10/building-culture-innovation/

In creating a Culture of Innovation a company is integrating something that is woven through the fibre of a brand, a new way of addressing problems to create solutions that resonate with what it is to be Innovative. It can be said that this is “critical to the future of education, (Staff, 2014), which is a key market of ADvTECHs.

Innovation is said to be “a key strategic imperative for the ADvTECH Group”, (ADvTECH Group Annual Report 2012, n.d.). According to the report the company encourages a Culture of Innovation within all tiers of their activities being “students and learners innovating, alignment and association with innovative partners and educators innovating”. In order for them to remain market leaders they have to maintain the culture of innovation within the company as this allows them to keep ahead of the curve. Instead of following trends, ADvTECH tries set them.

 

Drivers of Innovation

Innovation is subject to the context that it is being applied to. As the market in todays society is completely diverse and evolving it is impractical to list every single element that could drive innovation. Having said this, it is extremely important to understand the role that these drivers play as these things shape not only our environment, but the environment of firms and companies that operate in the system.

A driver of innovation is what persuades companies to remain active competitors in their chosen field, and allows them to engage in activities that they deem to be important to achieving their goals,  (Mika, 2007).

According to the article ‘The Four Drivers of Innovation’ by Shelley Mika there are specific factors that drive innovation being:

1. “Finding and fostering talent” –  “According to Clifton, four types of people drive innovation: inventors, entrepreneurs, extreme individual achievers in their fields (such as the arts, entertainment, or sports), and super mentors”, (Mika, 2007). People should be seen as not just a resource but as a commodity to industries as they can inspire and hold insights that can be drawn upon.

2. “Managers matter” – “Let’s not forget that creativity needs action to become innovation. Companies must do more with their employees’ creativity than just acknowledging that an employee has a good idea. That’s why managers matter”, (Mika, 2007). With positive affirmation and guidence from management the good ideas can be developed into great ones. Management should be there as an enabler of innovation, and allow employees to expand upon the current status of a company.

3. “Relationships matter too” – This is something that is also fostered through good management as managers have the ability to “enhance or limit [an employee’s] contribution to innovation”,  (Mika, 2007). Good relationships allows for open and respected communication that goes both ways.

4. “Keeping the right leaders” – leaders ‘foster creativity’ and its important that the people in these roles are evaluated, inspire others and have a clear vision. ADvTECH is run by a board of director, however each sector has its own group of leaders in their field that manage and maintain standards. Nothing falls upon an individual but rather a cohesive collective of people working together towards a unified goal. Each person has a place in the ranks of the company and contribute effectively, attributing to the companies’ success.

Within ADvTECH, not only do the have strong leaders and management, they also hire designated people that feed into the companies innovation culture called ‘Innovation Planners’. These people are internal drivers of innovation for the company and their activities.

Drivers that have not been mentioned above which are key in ADvTECH’s  positioning are the external environment and emerging technologies. The external environment can influence a companies positioning and processes.

The external environment can be seen as macro factors that that ADvTECH cannot control, yet have to adapt, and make allowances for. Sustainability is a focal point for the group and in order to be sustainable in the market they must understand it and react towards meeting the demands of the current enviroment. This can relate to consumer trends within the global community which ADvTECH makes investments in towards remaining up to speed and relevant. They partner with companies that deliver towards their goals, and are part of the global private education market.

Emerging technologies could be seen as the main driver of innovation for ADvTECH as ‘virtualising’ operations is seen as the way of the future for them, (Ascent Technology, 2013).  “This has meant that (their) educators have to stay abreast of the innovation curve and technology trends”, (ADvTECH Group Annual Report 2012, n.d.), for the company this means remaining up to date with  what they believe to be “modern educational demands”, (ADvTECH Group Annual Report 2012, n.d.). Part of ADvTECHs current growth stratey is “growing its leading market position while enhancing the use of digitally enabled learning in schools and tertiary institutions”,  (Thomas, 2016).

 

ADvTECH and their Process of Innovation

Within ADvTECH there is no specific process linked to their innovations/ strategies though it can be said that innovation is key to their success and culture. ADvTECH groups’ innovation “is treated as a three tier stream: students and learners innovating, alignment and association with innovative partners and educators innovating”,  (ADvTECH Group Annual Report 2012, n.d.). These three tiers make up the companies focus points, their students, partners, and educators. This is an example of how innovation is something that is carried out and encouraged  throughout operations.

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image: (Advtech.onlinereport.co.za, 2016)

 

The above image is the ADvTECH business model. Investment and Innovation form core aspects of the companies model. According to the report, the company “makes prudent investment decisions that best serve (their) short, medium and long term strategy, ensuring that (their) operations remain sustainable not just now, but well into the future”,(Advtech.onlinereport.co.za, 2016). Sustainability is an important aspect of innovation as it is a focus on not just was is infront of us, but what comes next. ADvTECH want to be at the frontier of private education.

Vega is an example of this, as brands and the importance of understanding what makes bands succeed is something that has never been more relevant than in todays society as consumers have more options and rely on brands to differentiate themselves from one another when competing in the same sector. This is a learning institution that ADvTECH has implemented with great success as they have taken note of the external environment and reacted with something that aligns with their purpose and benefits the community.

The investment portion of their model is in relation to the investment of “significant financial and intellectual capital in (their) pursuit of excellence through innovation”,(Advtech.onlinereport.co.za, 2016). Innovation is seen as an investment to ADvTECH and, as what the model reveals, feeds into the incomparable quality and service.

Rather than a specific process of innovation, ADvTECH has ingrained a culture of innovation into their business model of which all aspects of the company actively engage with.

 

The Innovation Value Chain

What is the innovation value chain? “The innovation value chain is a sequential four phase process that involves idea generation, selection, idea development, and the diffusion of developed concepts”. (Brikinshaw, 2007). The innovation value chain is a concept that assists firms and organisation yield the best possible innovation by following the chain it is made up of four links they are as follows:

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image: (Ljepava, 2011)

Idea generation: Colleagues, Partners as well as external stimuli gained from the internet, expeditions and networking at events, is where the idea is typically formulated. (Ljepava, 2011)

Selection: The next phase of the process , is where you would sit in a focus group with all of the ideas that have been generated from the first step, involving various stakeholders gathering for the purpose of evaluating and validating the idea’s. Finally reaching consensus on the best, for purpose, idea. (Ljepava, 2011)

Development: The third stage is when resources (budget) are allocated. For example, a prototype is developed in order to justify and substantiate the concept. Conversion takes place between the idea selection and the idea development, by converting the idea into a service or product. (OECD, 2008)

Diffusion: The final phase in the innovation value chain, diffusion is when the product or service or brand is commercialised. This typifies the roll out of the new product or brand through various distribution channels and desirable customer groups. (Brikinshaw, 2007) “The innovation values that will help you improve innovation performance of an organization. By focusing on increasing individual innovation value added from each of the links in the innovation value chain, we are in fact positively affecting our organization’s innovation performance. It is recommended to focus firstly by understanding the weakest link in your innovation value chain in order to improve it. This will most likely produce a significant, positive impact on your organization’s innovation performance”. (Ljepava, 2011)

Asking the question, does ADvTECH have a clear innovation value chain? Primary research garnered from email communications from Dominic Tracey and relevant departments at ADvTech, suggest that they don’t, at the current time. At this stage, therefore, it is not

possible to list the stakeholders who contribute to the innovation value chain. Should ADvTECH successfully implement an innovation value chain process in their business, it is suggested this would greatly benefit an already successful brand. Giving them even more competitive advantage and differentiation as leaders in the private education sector. “Product development is improving the operational capability of other value added activities in the enterprise, which requires changing perspective from the supply chain to the value chain” (Reddy G.P., 2013).

“Value chains play an important role in transforming raw materials into end products demanded by the consumers. There are a number of stakeholders involved in this process of transformation chain and the partitioning of gains among stakeholders along the chain is often debated and analysed. There is however, understanding about the various chain processes practiced with the collective enlightenment of the stakeholders, proper enabling environment (institutions, infrastructure and policy) will be created in which various actors of value chain are functioning.” (Reddy G.P., 2013). The possibility of an innovation value chain attracts and energisers all stakeholders, current and desired. Innovation creates competitive advantage, stakeholder interest and participation. The lack of such could see an organisation, losing substantial opportunities and desirable stakeholders to other brands and organisations (Reddy G.P., 2013). “Innovating as a chain not only results in market-oriented improvements in products and services, but also enables businesses to streamline operations within and between themselves – resulting in higher levels of efficiency than would otherwise not be possible. It also enables businesses to create differentiation that competitors find difficult to copy.” (Reddy G.P., 2013).

Innovation is one of the best ways to build and increase market share, growing bottom line. In competitive and saturated markets, innovation is key to the organisations longevity, and if not embraced, as a significant value driver to customer offerings, they risk the loss of market share to competitors.  The innovation value chain affords, amongst other things, organisations, the opportunity to have a unique customised approach. It further aids the stakeholders involved to unleash new and improved products and offering to their customers. (Reddy G.P., 2013)

In order for ADvTECH to remain market leaders we feel that an innovation value chain will be of great benefit to this iconic private education firm and allow for further enhancements in their already established brands.

 

Barriers and Enablers of Innovation

There are various enablers of innovation, known as drivers and barriers of innovation, both internal and external to the organisation, they have the ability to either aid or impede on the innovation process.

Barriers of Innovation

Brands and firms aim to be innovative, however they can encounter factors that hinder the innovation process. The ability to recognise and resolve them, will assist the organisation in establishing an innovative culture that may lead to the ultimate success of the organisation. Identified barriers are as follows:

1. Leadership as a barrier– Leadership is crucial to ensure and encourage innovation. Leadership can often present as a substantial barrier, should they not be open to new ideas. Additionally, stakeholders who shut down new ideas, will discourage creative thinking and demotivate employees, who may not share ideas for fear of rejection. (ANON, 2011)

2. Time and Resources– Time as a barrier refers to not being allocated sufficient time to actively engage with innovation, as employees focus on their work at hand entirely and not come up with new ideas. Regarding resources, this could refer to capital or budget constraints. Often companies do not want to or cannot spend large amounts of money on research and development or creating innovative ideas. Resources could refer to people, time, money supplies and information; innovation cannot prosper if resources are limited or under pressure. (ANON, 2011)

3. Lack of innovation as a barrier– This could stem from the leadership not encouraging and motivating employees to engage with the innovation process, it is very import as it may facilitate innovation or hinder it. Therefor leadership needs to support and promote innovation. (ANON, 2011)

4. Inability to implement and commercialise new ideas as a barrier– An important consideration, “Idea implementation or translating the ideas into action plans. A team manager’s ability to promote and represent the ideas generated by their team can have a strong effect. Teams often require resources and cooperation outside their own team to help realise their ideas and transform them into innovations. A team’s ability to manage and influence their key stakeholders and encourage collaborative efforts from their counterparts is the key to idea implementation” (ANON, 2011)

5. Lack of direction– This is relevant, as people require freedom to be creative, however boundaries can assist to retain focus and efforts, motivating, and the achievement of objectives. Lack of boundaries could result in inappropriate ideas being prioritised, resulting in wastage. (ANON, 2011)

Enablers of innovation

In order to facilitate innovation, significant amounts of research points to a wide variety of enablers of innovation.  It is encouraged to look at enablers in a systemic way. According to Ernst and Young they define four enablers of innovation:

1. Customer insight: The growth of any successful innovation requires the organisation to get close to their customers, understanding the issue that needs resolving. A key enabler would be to understand your target audience and priority customers. (Dey, 2012)

2. People and culture: Organisations need to adopt and implement a mind-set and culture, prepared to tailor to customer’s needs; a diverse group offers you greater variety of ideas and approaches. (Dey, 2012)

3. Research and development: Companies need to do research on their local customers in their particular market, however collaborate with teams in other markets to analyse how innovations are developed and consider that application in your market (Dey, 2012)

4. Operations and business model: “Changes to the pricing structure or business model are the most widely used approach to develop products and services aimed at lower-income customers. More than half of companies say that they take this approach, while only 38% create entirely new products with lower income customers in mind.”  (Dey, 2012)

Considering ADvTECH’s barriers of innovation, currently at play, time and resources; according to ADvTECH’s 2015 annual report, the resourcing division performed

exceptionally well due to the consistent focus on integrating the best suited candidates with specified skills. “The recent acquisition of a majority stake in CA Global Group heralds an exciting new phase of expansion into other African markets. CA Global specialises in placement areas complementary to ADvTECH Resourcing, with approximately 90% of their recruitment activities taking place in the rest of Africa. This will position ADvTECH Resourcing as a driving force in the African market by delivering expansion into new geographies along with the ability to offer more opportunities in high demand, niche recruitment areas.” (Douglas, 2015). It is interpreted, that resources, from a ‘people’ perspective at ADvTECH, should not present as a barrier to innovation. The other aspects of resources have not been explored.

Lack of innovation as a barrier, as discussed ADvTECH, does not currently seem to have an innovation value chain in place, but this does not seem to hinder their acquisition strategy, recently acquiring the Gaborone International School in Botswana a giant leap in penetrating the Sub-Saharan Africa market. (Douglas, 2015)

Although ADvTECH does not seem to have a formal innovation value chain, they still engage with and collaborate with the African markets, believing that there are great opportunities lying within the African continent for them to add value through development and education (Douglas, 2015).

An enabler of innovation that ADvTECH engages significantly with is research and development. Through observing and learning lessons and utilising their own opportunity assessment methodology, they believe that creating targeted local partnerships lowers the risks of future ventures. They carefully consider opportunities that will expand and grow their footprint in the private education sector through new qualifications and potential business acquisitions. “The Group is continuing investigating ways of building adaptable, sustainable business models that allow for increased student access, while retaining an uncompromising commitment to quality, and generating returns for shareholders”. (Douglas, 2015). ADvTECH is currently analysing innovative and creative ways to provide superior educational solutions by effectively utilising their resources. Their adoption of continuous technological advancements, enables them to think differently and provide a unique framework in quality and affordable private education. (Reddy G.P., 2013)

The culture at ADvTECH contributes as an enabler of innovation as the organisation encourages collaboration between their brand and their sub brand divisions. They pride themselves on their differentiation, being affordable and providing superior private education in the South African market, now expanding into other parts of Africa.

 

To Conclude…

“In today’s fast-paced marketplace, if a company keeps offering the same product, a rival can easily race past with a better one. And yet another competitor will blow them both out of the water when it invents something altogether different and better — something innovative. To remain competitive, companies must consider how to find and keep visionary leaders and how to foster innovation and creativity in their employees, the executives and experts at the event agreed”, (Mika, 2007).

This in essence speak into the importance of all things innovation. It should not be viewed merely an activity or process but a fundamental contributor to a successful company or firm. ADvTECH have left their mark within their industry, however the lack of a specific a innovation strategy could be seen as a potential risk for the future. However for the time being their current market domination can be attributed to their successful use of innovation within the culture of the group, as they have remained on top of the private education sector and don’t seem to be slowing down.

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