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Innovation Survey

Experiment Findings · March 2021

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Culture of Innovation Survey of Tratos,
a cable manufacturing company

Presented by:
Maurizio Bragagni

Professor:
Davide Ravasi
Professor in Strategic and Entrepreneurial
Management Faculty of Management Cass
Business School - City University London
 Culture of Innovation Survey of Tratos,
a cable manufacturing company

Presented by:
Maurizio Bragagni, #140029382
In partial fulfilment of the:
Executive Master of Business Administration Degree
Submitted for:
Business Mastery Project
Presented to:
Professor: Davide Ravasi
Professor in Strategic and Entrepreneurial Management Faculty of Management
Cass Business School
City University London

Word count: 16,479

Date London 26th April 2016

1
Table of Contents

LIST OF APPENDICES ..................................................................................................................... 4

BIBLIOGRAPHY ............................................................................................................................... 5
LIST OF TABLES AND FIGURES ................................................................................................... 5

ACKNOWLEDGMENTS .................................................................................................................. 12
LIST OF ABBREVIATIONS ............................................................................................................ 13
EXECUTIVE SUMMARY ................................................................................................................. 14

1. INTRODUCTION ......................................................................................................................... 17
2. INNOVATION .............................................................................................................................. 22
2.1 DEFINING INNOVATION ......................................................................................................... 22
2.2 INNOVATION A COMPETITIVE ADVANTAGE .............................................................................. 26
3. CULTURE .................................................................................................................................... 28
3.1 DEFINING CULTURE.............................................................................................................. 28
3.2 WHY BOTHER WITH CULTURE? ............................................................................................ 30
3.3 WHAT IS THE CULTURE OF INNOVATION? .............................................................................. 31
4. CABLES INDUSTRY ................................................................................................................... 34
4.1 RADICAL AND INCREMENTAL INNOVATION IN THE CABLE INDUSTRY ......................................... 34
4.2 OVERVIEW OF THE CABLE INDUSTRY .................................................................................... 38
4.2.1 Forces driving competition in the global cables market .............................................. 44
4.3 KEY SUCCESS FACTOR ........................................................................................................ 50
4.4 TRATOS SUCCESS FACTOR .................................................................................................. 50
5. METHODOLOGY ......................................................................................................................... 53
5.1 OBJECTIVE OF THE STUDY ................................................................................................... 53
5.2 SURVEY .............................................................................................................................. 53
5.2.1 Pilot Survey ................................................................................................................. 55
5.2.2 Survey Results ............................................................................................................ 55
5.3 WORKSHOP ......................................................................................................................... 55
5.3.1 First workshop ............................................................................................................. 56
5.3.2 Second workshop ....................................................................................................... 56
5.4 EXPLANATION OF THE SURVEYS USED AS A BASIS FOR THE TRATOS QUESTIONNAIRE ............. 57
5.4.1 The Building Blocks of Innovation Survey ................................................................... 57
5.4.2 “Climate change perception questionnaire” ................................................................ 57
5.4.3 Questionnaire on Tratos perception of innovation. ..................................................... 59
6. ANALYSIS AND RESULTS ........................................................................................................ 61
6.1 SAMPLE .............................................................................................................................. 61
6.1.1 General remarks ......................................................................................................... 61

2
 6.2 RESULT ANALYSIS ............................................................................................................... 63
6.3 DETAILED ANALYSIS ............................................................................................................ 67
6.3.1 The highs and lows ..................................................................................................... 69
6.3.2 The differences ........................................................................................................... 70
6.3.3 The Italian culture ....................................................................................................... 73
6.4 WORKSHOPS ....................................................................................................................... 74
6.4.1Culture of Innovation Academy Workshop 26th February 2016 .................................. 74
6.4.2 Culture of Innovation Board workshop Monday 14th March 2016 .............................. 77
6.4.3 Workshop conclusion .................................................................................................. 82
6.5 REPORT RECOMMENDATIONS ............................................................................................... 84
7. CONCLUSION ............................................................................................................................. 85

APPENDICES .................................................................................................................................. 88

3
List of Appendices

Appendix 1- Tratos Group – Culture of Innovation Survey

Appendix 2 - Letter to accompany Culture of Innovation Survey
Appendix 3 - Analysis Tratos Group Culture of Innovation Survey
Appendix 4 - Innovation Survey: Factors
Appendix 5 - Innovation Survey: Elements

4
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List of Tables and Figures
List of Tables:

Table 1: Measure of company’s innovative culture 63

Table 2: Comparison of Tratos’ strengths and weaknesses 66
Table 3: Variance between sites in survey results 71
Table 4: Internal communication tools 82

List of Figures:

Figure 1: Transitioning from an old technology to a new technology 26

Figure 2: Remnants of the textile industry in Southern Tuscany 37
Figure 3: Billions Euros Turnover of cable manufacturers – Prysmian Annual rpt 2014 39
Figure 4: Global cables market category segmentation: % share, by value, 2014(e) 40
Figure 5: Global cables market value: $ million, 2010–14(e) 41
Figure 6: Global cables market value forecast: $ million, 2014–19 41
Figure 7: Global cables market geography segmentation: % share, by value, 2014 42
Figure 8: Change in Wire & Cable Consumption by region 43
Figure 9: Forces driving competition in the global cables market, 2014 44
Figure 10: Drivers of buyer power in the global cables market, 2014 45
Figure 11: Drivers of supplier power in the global cables market, 2014 46
Figure 12: Drivers of degree of rivalry in the global cables market, 2014 47
Figure 13: Factors influencing likelihood of new entrants in global cables market, 2014 48
Figure 14: Factors influencing threat of substitutes in global cables market, 2014 49
Figure 15: Market Presence V Product Portfolio Range - Prysmian Annual rpt 2014 51
Figure 16: Innovation radar 59
Figure 17: Results Survey Graph 65
Figure 18: Variance between sites in survey results 72
Figure 19: Organisational Structure 81

11
Acknowledgments

“This may seem a strange way to begin with an autobiography. A confession: I hate
having to use the first person. Nearly everything I have done in my life has been
accomplished with other people.” (Welch 2003). Yet when you write a book like this,
you are forced to use the narrative “I” when it is really the “we” that counts.

I want to mention everyone who has helped to shape my character, my values, and
my career. My ancestors: those with whom I got the honour of sharing a part of their
lives; My great-great-grandmother Emilia; my great-grandmothers Giuseppa and
Rita; my great-grandfather Silvestro; my grandfathers Amleto, Amerigo and Pietro;
my grandmothers, Maria, Viviana, Marina, (I was surrounded by love); my parents -
my loving mother Giovanna and my father Germano (the only man that I have ever
envied); my sister Sara, my brother-in-law Vincenzo (who has more than once
reviewed this work); my nephews and nieces - Tommaso, Luca, Rita, Teresa; my
loving wife Alessandra, my daughters Giulia Maria, Lucia Maria, Elena Maria and
Anna; my family - my uncles Marcellino, Fulvio, Gabriele; my aunties - Anna,
Silvana, Giulia; my Godchildren - Daniele, Fabio, Elettra; my parents in law: Franca
and Pino; my teachers - in particular my English high school teacher Prof. Burroni,
Prof. Rizzo, Prof. Teti; my bookteachers- Don Luigi Giussani, Jack Welch, Mervyn
King, Warren Buffett, Winston Churchill; my priests – Gilfredo, Evio, Virgilio, Juan
Carlos, Severino, Francesco; my classmates in school and Universities - Domenico,
Francesco, Federico, Rocco, Luca, Massimo, Teresa, Conor, Costa, Vivien, Maria,
Roberto; my bosses - Albano, Marta, Ennio, Elisabetta; my mentors in business -
Silvano, Alfredo, John Light, John Cooper, Thomas, Neil, Jeanette, Bridgett, Ottonel,
Stephan, Leonardo, Alberto and Prof. Roberto Ruozi; my Cass supporter- Lorraine;
my guardian angels - Elena, Martina, Enrico, Lucrezia, Sally, Denise and Paolo; my
truth-seekers in the academy- Prof Paul Dobson, Prof. Ajay Bhalla, Prof. Gianvito
Lanzolla, Dr. Alessandro Giudici and Prof. Davide Ravasi, in particularly for his
patience: my cluster mates- Simone, Sergio, Piero, Raffaella; my colleagues and
believers at Tratos - James and Rodger Card, Kevin, Peter, Jon, Philip, Cindy,
Veronica, Zilah, Rainer, Craig, Andrew, Barbara, Vincenzo, Francesco, Alan, Kath,
Sue, Gianfranco, Chris; the Tratos shareholders/owners, who have given me their
trust; and my friends from all the walks of life.

“No man is an island, /Entire of itself, /Every man is a piece of the continent, /A part of the
main. /If a clod be washed/away by the sea, /Europe is the less. /As well as if a promontory
were. /As well as if a manor of thy friend's /Or of thine own were: /any man's death
diminishes me, /Because I am involved in mankind, /And therefore never send to know for
whom the bell tolls; /It tolls for thee.” (Donne 1824)

12
List of abbreviations
AIEE American Institute of Electrical Engineers
AL Aluminium
BASEC British Approvals Service for Cables
CAGR Compound Annual Growth Rate
CEO Chief Executive Officer
CH Chesterfield
CU Copper
DOC Department of Commerce
EHV Extra High Voltage
F4E Fusion For Energy Agency
GE General Electric
ICF International Cable makers Federation
IEEE Institute of Electrical and Electronics Engineers
IMQ Instituto Italiano Del Marchio Di Qualita
JCMA Japan Construction Mechanization Association
KN Knowsley
KV Kilovolt
LME London Metal Exchange
NPD New Product Development
OECD The Organisation for Economic Cooperation & Development
PPL Paper Polypropylene Laminated
QSTNS Questions
R&D Research & Development
US United States

13
Executive summary

Tratos had to break with traditional market places and products to grow - by building
unique business modules, forging direct stakeholder relationships (customers,
suppliers) and refusing to deal with distributors or agents.

In short it has survived and flourished for 50 years thanks to a focus on innovation.
As CEO, I lead a business that is part of one of the fastest-moving commercial
environments, a sector driven by innovation and repeatedly defined by the art of the
possible.

The business is cable manufacturing, but at Tratos we do it differently. Innovation is

one of the pillars around which the business has grown. There’s still much to do - to
find out more about innovation in business, and how a culture of innovation can be
nurtured. The best was to do this was to look at the best practice in the space, and
apply the thinking to Tratos to establish how deep innovation was ingrained and what
more could be done to encourage it.

We talk to our customers, we deal with them directly. That means we can establish,
first-hand, their technical needs. This direct line to customers’ technical people
creates the opportunity to produce radical technological solutions alongside our
customers.

As a result, Tratos stopped selling a cable product, and began selling innovation-led
solutions.

By identifying the hot spots for innovation within Tratos earlier, and facilitating an
easier route to practical innovation, how might that accelerate the business? The
survey results provided a clear path to better innovation.

For instance, the survey of Tratos employees saw the company rated highly
externally on innovation, its disciplined approach to innovation and its ability to
develop new capabilities from its work.
14
Yet employees ranked certain individual components of success poorly. Its inability
to minimise rules, polices and bureaucracy; its accountability of responsibilities and
decision-making and entrepreneurialism, on creating new things and tolerating
ambiguity when pursuing new opportunities.

Employees also ranked the company's leader poorly on engagement; the engaging
factor ranked lowest among the 18 factors and in particular, it scored very poorly in
Italy and in the UK, yielding below the average Innovation Quotient.

Employees weren’t taking the initiative in the innovation process, perhaps partially
because leaders did not coach them. A large number of employees felt leaders did
not provide feedback and support. Nor did they feel the company rewarded individual
participation in potentially risky opportunities, irrespective of the outcome.

Yet to survive and flourish, in the most difficult of environments, Tratos has focused
on niche markets and on that all-important innovation. In the 1900s it developed fibre
optical products, in the 2000s it produced cables for mobile applications, such as
reeling cables for port cranes, and specialised in high speed products. In 2010s
Tratos won an innovation award for supplying the Superconductor cables for the
world-stage Energy Fusion project referenced earlier.

Cables are made from raw materials and compounds managed and controlled by
large organisations, so the bargaining power of the suppliers is significant.

Tratos invested in its own compounds to achieve additional control and

competitiveness. It fuelled diversification and dominance in niches by investing
heavily in alternative products.

Tratos’ decision to engage on a differentiation platform included introducing radical

technology to previously uneconomical markets. Due to years of competition on
price, several markets had become innovation wastelands. Companies were losing
money, and the markets were in decline. Tratos turned this to advantage, revitalising
15
the most depressed markets with carbon fibre innovation for overhead conductors,
overtaking existing players.

Based on the previous analysis and my experience of the industry, I can identify two
principal ways to achieve success in the cable manufacturer industry: large
economies of scale or innovation.

Add to this, access to a highly-skilled workforce and real insight into your business
and you have something really powerful to bring change and step up to even greater
innovation.

16
 1. Introduction

This BMP aims to analyse the culture of innovation in Tratos. To achieve this I have
principally used the studies of Rao Jay and Weintraub Joseph, "How Innovative Is
Your Company’s Culture?” (Rao and Weintraub, 2013) (Chapter 5.4.1).

Since the beginning of the EMBA, I was moved by “…understand(ing) how to

manage Tratos in a period of enormous change for the company and the industry in
which it operated following the deregulation of the European telecoms market in
1994.” (Moules, 2014).

Especially, as I expressed during my interview in the FT newspaper of September

28th, 2014 when asked: What have you learnt from your time at Cass? “I thought
that one of my company’s strengths was its ability to adapt and respond quickly to
opportunities or market changes: the existing informal working practice and the ‘just
make it happen culture’ encourages flexibility and an entrepreneurial approach.
“During these years, I made massive changes in several sectors: [including]
production, management, purchasing, IT systems and in particular I tried to change
the firm’s culture. In the process, I found that all my assumptions were wrong. I now
understand the company lacks the structure required to manage risk effectively,
support long-term growth and optimise performance. Changing things will require a
programme of training and development to address real culture change.” (Moules,
2014).

This desire for exploring, understanding and experimenting has been with me since
the beginning of this adventure and I want to use this opportunity to investigate the
Culture of Innovation in Tratos. It is an experiment and it must be considered as such
but at the same time, I have to clarify two main limitations I found in working on this
research.

17
The first (and practical one) was that only 15,000 were allowed for the development
of this subject. This academic requirement meant I had to condense my work and I
sacrificed the fullness of the explanation in some instances for a more natural and
shorter read to highlight the core element of the work i.e. the analysis and the
conclusion of the survey.

Consequently, I have not explored the academic discussion between climate and
culture, although it was part of the background work. To help navigation and keep
words to a minimum, when I refer to ‘climate’ it is interchangeable and relates to one
block of the Rao and Weintraub survey and the second survey I applied, “climate
change perception questionnaire", (Abbey, 1981).

The second was my position in the company. As Tratos Ltd CEO, I couldn’t
personally investigate the company culture. People had to be free to answer
truthfully without fear of consequences. To ensure this, I appointed Jeanette Purcell
Associates, an independent consultancy, to carry out the survey and collect the data.
I also selected the quantitative method to analyse the organisational culture,
including interviews with key personnel and by inviting direct observations.

During the Literature appraisal, I approached the study of Rao and Weintraub (2013)
on “How Innovative is your Company’s Culture”. The authors created a survey to
measure the innovative culture inside a company. I selected the questionnaire as my
primary hypothesis of this work. Their approach is based on the imperative that
organisation culture is the principal driven factor of innovation, over any other factor
(national, environmental, etc.). This was in contrast with Schein’s position (2010) that
organisational culture is also influenced by several other factors including: national
culture and government policy.

18
For that reason, I integrated the Rao and Weintraub survey (Chapter 5.4.1) with 15
statements collected from a “climate change perception questionnaire”, used by
Forehand (1963) and Paulillo (1977), and adopted in the analysis of Abbey (1981)
‘technological innovation in the semiconductor industry’. I used this additional survey
to measure the confidence or, better, the employees’ perception of company
stability, (first integration). I thought that I needed a verification of the Rao Weintraub
statement and "climate change knowledge questionnaire" helped to verify
employees’ understanding of changes (Chapter 5.4.2).

The second addition was 12 statements around the philosophy of innovation based
on the research of Sawhney and colleagues: “The 12 different ways for companies to
innovate” (Sawhney, Wolcott and Arroniz, 2006) (Chapeter 5.4.3).

I included statements, chosen through my knowledge of the industry, to help verify

Tratos employees’ perception of innovation; whether Tratos it is seen as a product
innovator only, or a 360° innovator (Chapter 5.4.3).

Two workshops were organised to gather comment on the survey results (Chapter
5.3). The first with senior management and the second with Tratos Ltd’s board
members. A true debate was needed with the ability to be honest. This work helped
form the strategy for building a true culture of innovation at Tratos (Chapter 6.4).

It was important to encourage acknowledgement of "culture innovation" with senior

members of Tratos and because of the dynamics of this group, the discussion was
more concentrated around the organisation’s structure than the implementation of
culture innovation. However, structure has an important part to play and all
participants agreed on the value of the information resulting from the survey.

19
Tratos' score as an innovative company was good (Chapter 6.2). According to Rao
and Weintraub’s tool, the results classified Tratos as an innovative company, not an
extreme one, but an innovative one nonetheless. The international office scored
higher than our Knowsley and Italy operations. Seeing our innovation-hub factory
with a low score lead me to suspect that external factors could modify perceptions.
This hypothesis is confirmed by the “Work Climate Survey” (Abbey & Dickson, 1983).

In my opinion, the variant in scoring from Italy to other parts of the company may be
a national perception of the wider environment with nationality influencing attitudes.
A further study is needed, but the similar results from members of staff in Italy
(whether from members of the sales team, workshop floor or technical team) tends
to indicate that different climate conditions influenced the results (Chapter 6.3).

We believe the ‘country’ factor influences the organisational culture at Tratos. In this
instance, either the Rao and Weintraub survey has limitations or exceptions or the
sample selected for the Tratos survey was not sufficient. However, the main scope of
the study is "data-supported picture of where the company culture is high and weak
and then focus on specific areas where improvement is most needed and most likely
to pay off". As the authors suggested in their article "a better strategy is to focus on
few things and leverage their success into a broader transformation over time." (Rao
and Weintraub, 2013).

During the workshops we identified strengths and weaknesses and ranked the
results from 1 to 6 (the blocks), from 1 to 18 (the factors), and from 1 to 54 (the
elements).

We rated poorly, according to Rao and Weintraub. According to this survey, the
employees gave the company high marks on enable1, capture2, external success,
learning, enterprise and people. We ranked poorly on the individual components of
success, and also ranked very low for simplicity, and entrepreneurial.

1
Enable and capture has been marked both 3.75
2
Enable and capture has been marked both 3.75
20
Employees ranked the company's leader badly on engaging the rest of the
workforce; the engage factor ranked lowest among the 18 factors, in particular, it
scored very poorly in the Italy and in the UK.

Tratos’ employees, according to “The 12 different ways for companies to innovate”,

(Mohanbir, Wolcott, Arroniz, 2006) ranked the company with no significant distinction
between sites (Chapter 6.2).

I wanted to discuss the results with my senior staff, to engage all of them in
progressing the work together. I wanted to follow the advice of the authors behind
our source survey, who suggest "Show, not sell, persuasion works best in these
situations, along with healthy dollops of encouragement to early adopters". (Rao and
Weintraub, 2013).

The workshops produced several recommendations for change including

championing innovation through better internal and external communication,
improving the working climate – real and perceived - from the Knowsley and Pieve
sites, reducing the company bureaucracy and improving the recruitment process.
They also recommended enforcing and developing strengths such as the shared
drive for success, a sense of enterprise, responsiveness to change and flexibility
(Chapter 6.4.3).

After a healthy discussion of the survey results by the board, we have also decided
to implement the Tratos Academy: a training programme coupled with increased
delegation, coaching, support and feedback systems, and most of all by changing
behaviours (Chapter 7).

A key result has been senior management and Board’s acknowledgement of facts
based on data, rather than personal perception. We know where we stand and the
main factors that can influence the culture of innovation. Work continues and I am
sure this will help us write the second 50 years of Tratos’ success.

21
 2. Innovation

2.1 Defining innovation

“Innovation” has had different meanings: a product-based definition was proposed by

Barnett as the “invention of something new” (Barnett, 1953); a more organisation-
oriented definition was instead proposed by Shepard who “considered an
organisation to have innovated when it learns to do something it did not know how to
do before” (Shepard, 1967).

Carroll saw innovation as a social process of organisational adoption in contrast to a

scientific discovery (Carroll, 1967). Mansfield proposed innovation as “first use ever”
of a new product (Mansfield, 1963); Zaltman et al. defined innovation as “the
propensity to adopt any idea, practice or material artefact perceived to be new by the
adopting unit”. (Abbey, 1981).

More recently, the question of what exactly innovation is, was re-proposed by
Sawhney and colleagues. These authors reported: “although the subject has risen to
the top of the CEO’s agenda, many companies have a mistakenly narrow view of it.
They might see innovation only as synonymous with new product development or
traditional research and development. But such myopia can lead to the systematic
erosion of competitive advantage, resulting in firms within an industry looking more
similar to each other over time”. (Sawhney and Wolcott 2006).

To avoid this, Sawhney and colleagues proposed to anchor the discussion on the
customer outcomes that result from innovation, and they suggested that managers
think holistically in terms of all possible dimensions through which their organisations
can innovate (Chapter 5.4.3). Accordingly, they defined business innovation as “the
creation of substantial new value for customers and the firm, by creatively changing
one or more dimensions of the business system” (Abbey, 1981) (Chapter 5.4.2).
Thus, a modern definition of innovation must consider not only product development
but the impact that any change might generate in value creation. Today, companies
capturing higher created value apply a different concept of innovation to the market.

22
They either introduce a completely new technology that destroys the existing one
(e.g. digital photography on celluloid) or a new strategy for selling the same product
(Ryanair).

To describe the first behaviour, CM Christensen introduced the term “disruptive

innovation for a process by which a product or service takes root initially in simple
applications at the bottom of a market and then relentlessly moves up market,
eventually displacing established competitors” (Christensen, 2003).

When a different strategy changes the rules, introducing a new way of playing the
game (e.g. Ryanair) we are facing strategic innovation. To this end, this specific type
of strategic innovation is “disruptive strategic innovation” – “namely, a way of playing
the game that is both different from, and in conflict with, the traditional way”
(paraphrased) (Charitou and Markides, 2003)

In Schumpeter’s words, “radical innovations shape big changes in the world,

whereas “incremental” innovations fill in the process of change continuously.
Schumpeter proposed a list of various types of innovations: introduction of a new
product or a qualitative change in an existing product; process innovation new to an
industry; the opening of a new market; development of new sources of supply for raw
materials or other inputs; changes in industrial organisation” (paraphrased).
(Schumpeter, 1934)

These definitions also make it clear that innovative activities emerge from the
application of intangible assets that integrate knowledge, skills, and technologies in
the development and commercialisation of products and processes (Intangible
assets are those that do not have a physical or tangible existence, such as goodwill,
brand value, patents). (Organisation for Economic Cooperation and Development
(OECD), 2010).

23
Schumpeter’s ideas have been adopted by The Organisation for Economic
Cooperation and Development (International organisation helping governments
tackle the economic, social and governance challenges of a globalised economy)
and they were included in the Oslo Manual. “The Oslo Manual is the foremost
international source of guidelines for the collection and use of data on innovation
activities in industry”, (OECD, 2010).

In the Oslo Manual the definitions of innovation are:

● “The implementation of products or production and delivery processes with
new or significantly improved characteristics. The third edition of the Oslo
Manual extends the definition to include new organisational methods in
business practices, workplace organisation, or external relations” (OECD,
2005).
● “DOC defines innovation as the design, development, and implementation of
new or altered products, services, processes, organisational structures, and
business models to create value for the customer and financial returns for the
firm practicing innovation (DOC, 2008)” ( Oslo Manual, 2010).

Both definitions recognise the strategic application of knowledge in all innovation

activities and the importance of commercialisation activities in facilitating financial
returns to the innovative firm and social returns to consumers.

However, authors agreed that a successful innovation is one that returns the original
investment in its development plus some additional interest (e.g. increased revenue)
(Mascarenhas, 2013). Innovation produces an economic return and it can come from
any direction. There is both technological and process innovation. “The combined
activities within the innovation process are the route to useful, new, marketable
products and services and/or new production and delivery systems”, (Burgelman,
2009).

The review of literature points out three types of innovation: incremental, radical and
architectural.

24
Incremental innovation involves the adaptation, refinement, and enhancement of
existing products and services and production and delivery systems. The new
incremental product can co-exist with the actual one.

In cabling, for instance, incremental innovation is the aluminium conductor against

the copper power cable. The introduction of aluminium metal, instead of copper,
aimed to reduce the financial cost because both metals are exchanged on the LME.

Cable in copper has a better transmission of power, if it has the same cross section,
than a cable in aluminium; in fact, the equivalent ten sqm in copper is a 16 sqm in
aluminium. However, aluminium is a third cheaper than copper, and in particular
weight is 2.6 Al against 8.9 Cu. Both products are still used; aluminium power cable
did not replace the copper power cable.

Radical innovation involves entirely new product and service categories and
production and delivery systems. Innovation is radical when it is based on a
disruptive technology - a new product that makes the existing one obsolete.

In the cable industry, fibre is replacing copper cables in the telecommunications

market. The fibre optical cable transfers signals at the light speed. The copper cable
transfers signal at the speed of electrical impulses. A copper telecommunication
factory went into bankruptcy because it was unable to change its production process.

Architectural innovation involves reconfiguration of the system of components that

constitute the product. “Manufacturers may well take the opportunity to refine and
improve some parts, but essentially the changes will be minor, leaving the
components to function as they have in the past but within a newly re-designed and
re-configured system.”(Henderson, Clark 1990).

No examples of architectural innovation in the cable industry were found.

25
 2.2 Innovation a competitive advantage

Figure 1: Transitioning from an old technology to a new technology

These different innovations (described above) are also related by an important

dynamic, a technical innovation ‘S-shape’. According to Golder and Tellis, at a
certain point (t) a new technology enters in the market, with lower performance than
the old technology (Figure 1). However, the new technology “begins to improve
rapidly in consumer benefit, and it ascends on its S-curves. At point (b), the product
becomes a radical product innovation”, (Golder and Tellis, 1997) with the strength to
render existing products obsolete. Otherwise, it becomes merely a substitute. At the
core of any innovation, there is an enabling technology, and at the origin of those
technologies are inventions or discoveries.

According to Chandy and Tellis (1998), there are several reasons why innovation,
and in particular radical innovation, is important. Firstly, “radical innovations have the
capacity to destroy the fortunes of firms (the example of B3). Hard-won customers
quickly desert an incumbent firm when a radical innovation provides better
performance per dollar than the incumbent's current products. Costly investments
made over the years suddenly become useless because they cannot be applied to
the new generation of products.

26
Skills that built a firm’s success can quickly become obsolete. Radical product
innovation can be the source of competitive advantage to the innovator.

Some authors argue that radical innovations are increasing in frequency (Foster
1996)”. In the cable industry, I noticed it, with the introduction of new types of
material such as nano polymer – a material that is being talked about by those
involved in traditional manufacturing processes (Chandy and Tellis, 1998).

Several researchers support the positive relationship between innovation and

success. For example, Hall, Jaffe and Trajtenberg (2001) found that the average
number of citations per patent contributed to the explanation of a firm’s market value.

However, “new US consumer product projects fail 95% of the time (Clancy & Stone,
2005), and industrial product launches fail about 40% of the time”, (Stevens &
Burley, 2003), (Belassi, Kondra, Tukel, 2007).

In an attempt to overcome such high levels of project failure, Belassi, Kondra and
Tukel investigated the effects of organisations’ culture on the performance of new
product development (NPD). Using data from 95 US institutions, the study provided
evidence of significant effects of organisations’ culture on NPD projects.

Also, after studying innovation among 759 companies based in 17 major markets,
researchers Tellis, Prabhu and Chandy (2009) found that “corporate culture was a
much more important driver of radical innovation than labour, capital, government or
national culture” (Tellis, Prabhu, Chandy 2009).

From the above assertions, it is clear that innovation is primarily influenced by

organisational culture. Understanding innovation is fundamental for a firm’s survival,
in particular, radical innovation, so it is imperative understand organisational culture.

27
3. Culture
3.1 Defining culture

The idea an of organisation’s culture being recognised as having a value is a

relatively recent phenomenon. Until the mid-1980s, organisations were, for the most
part, only thought of as a rational means by which to coordinate and control a group
of people. Various authors analysed how the behaviour of a company is perceived
by employees – specifically its internal environment and work climate conditions
(Abbey 1981).

In his bibliography Straight From The Gut, Jack Welch, just appointed GE (General
Electric) CEO, in 1981, stated “(...) I did know what I wanted the company to “feel”
like. I wasn’t calling it ‘culture” in those days, but that is what it was”. (Welch, 2003)

Organisational culture was introduced in literature by Hofstede (1997), Deal and

Kennedy (1982), Schein (1984), O'Reilly and Chatman (1996). Hofstede defined it as
the set of shared assumptions that is often unstated. “Culture as mental software,
however, corresponds to a much broader use of the word which is common among
social anthropologists: this is ‘culture two’. In social anthropology, 'culture' is a
catchword for all those patterns of thinking, feeling, and acting (...).More than just
those activities supposed to refine the mind are included in 'culture two', but also the
ordinary and menial things in life: greeting, eating, showing or not showing feelings,
keeping a certain physical distance from others, making love, or maintaining body
hygiene” (Hofstede, 1997).

Deal and Kennedy (1982) defined organisational culture "as the way things get done
around here". They argue that it is culture at individual, team and organisational
levels that creates the context for practice. (Deal and Kennedy, 1982).

28
According to Schein: “Organisational culture is the pattern of basic assumptions that
a given group has invented, discovered, or developed in learning to cope with its
problems of external adaptation and internal integration, and that have worked well
enough to be considered valid, and, therefore, to be taught to new members as the
correct way to perceive, think, and feel in relation to those problems”, (Schein, 1984)

O’Reilly and Chatman (1996) defined organisational culture as “a system of shared

values (that define what is important) and norms that identify appropriate attitudes
and behaviours for corporate members (how to feel and behave)” (for similar
definitions, see (Kotter and Heskett, 1992); (Rousseau, 1990); (Gordon and
DiTomaso, 1992).

More recently, Ravasi and Schultz (2006) wrote, "organisational culture is a set of
shared assumptions that guide what happens in organisations by defining
appropriate behaviour for various situations".

Belassi: “researchers use a range of theoretical approaches and assumptions and

often interpret similar culture phenomena in different ways. Within organisational
culture literature, there appears to be a fundamental disagreement over theoretical
perspectives. (..)The lack of paradigm consensus aside, the study of organisational
culture contributes a great deal to understanding how organisations operate.”
(Belassi, Kondra and Tukel 2007).

During a review of the literature, I was captivated by O'Reilly and Chatman’s idea
that culture is to measure a characteristic of organisations (O’Reilly and Chatman,
1996).

When I found the Rao and Weintraub survey (chapter 3.3), I decided to adopt it. It
was the answer to measuring the level of innovation culture inside of Tratos.

29
 3.2 Why Bother with Culture?

“Culture matters because it is a powerful, tacit, and often unconscious set of forces
that determine both our individual and collective behaviour, ways of perceiving,
thought patterns, and value. Organisational culture in particular matters because
cultural elements determine strategy, goals, and modes of operating.” (Schein, 2009)

Organisations produce cultures that are organised in structure, process, values and
behaviours that characterise and govern them. Culture matters because if it is
ignored, it rules the firm instead of the CEO.

According to Schein: “culture is not based on a superficial model, but built on deeper,
more complex anthropological models. Those models refer to a wide range of
observable events and underlying forces, such as: observed behaviour, behavioural
regularities when people interact, group norms, espoused values, formal philosophy,
rules of the game, climate, embedded skills, habit of thinking, mental models, and/or
linguistic paradigms, shared meaning, root metaphors or integrating symbols, formal
ritual and celebrations. The concept of culture implies structural stability, depth,
breadth and patterning or integration” (Schein, 2010).

In particular "structural stability" means stability in the group. For Schein, the
strength of a culture depends on how long members of a group have been together,
and how stable and homogenous the group has been. With the term depth, the
author explains that culture is the deepest, often unconscious, part of the team and it
is, therefore, less tangible and less visible. On breadth, Schein describes culture as
able to pervade and influence all the aspects of how an organisation deals with its
primary tasks, various environments, and internal operations. Finally, culture implies
that rituals, climate, values and behaviours tie together into a coherent whole, and
this pattern of integration is the essence of what Schein means by culture (Schein,
2010).

30
Cultures can generate inertia - as described by Michael T. Hannan and John
Freeman (1984) - that could be an obstacle to innovation. “(...) For broad classes of
organisations, there are adamant inertial pressures on structure arising from both
internal arrangement (e.g. internal politics) and from the environment (e.g. public
legitimation for group activities)” (Hannan and Freeman, 1984). Unless the company
is regularly orientated to learn and adapt itself to new external conditions, culture can
be an obstacle to change.

3.3 What is the Culture of innovation?

After reviewing literature in the fields of organisational dynamics, leadership,

behavioural science, corporate entrepreneurship and innovation, Rao and Weintraub
found theoretical frameworks and models that described the organisational culture
and a culture of innovation. Specifically, they reported that while looking for
instruments and assessment tools that were reliable, they “found extensive research
and models from academia, consulting firms and enterprises themselves, spanning
more than 30 years” (Rao and Weintraub, 2013).

In particular, the works of Christensen (1997) demonstrated the importance of

resources, processes and values in innovation. Schein’s (2010) work showed the
importance of past success and its impact on values and behaviours. As Rao and
Weintraub (2013) report: “our thinking about the survey’s basic framework was
heavily influenced by Christensen’s and Schein’s work”. In fact in their studies, Rao
and Weintraub considered the observed behavioural regularities when people
interact described by Schein in Organisational Culture and Leadership, (Schein,
2010, chapter. 3.2).

Briefly, the studies of Rao and Weintraub led to the identification of 54 elements and
18 factors that were field-tested for more than two years for statistical validity and
executive acceptance as both a diagnostic and actionable tool. Data was gathered
from 1,026 executives and managers in 15 companies headquartered in the U.S.,
Europe, Latin America and Asia.

31
Rao and Weintraub went on to build a survey framework that they propose as “a new
assessment tool (that) can help pinpoint your company’s innovation strengths and
weaknesses” (Rao and Weintraub 2013).

The survey is composed of six blocks (values, behaviours, climate, resources,

processes, success), 18 factors (values: entrepreneurial, creativity, learning;
behaviours: energise, engage, enable; climate: collaboration, safety, simplicity;
resources: people, systems, projects; processes: ideate, shape, capture; success:
external, enterprise, individual) and 54 elements (chapter 5.4.1).

“Values drive priorities and decisions which are reflected in how a company spends
its time and money” (Rao and Weintraub, 2013). Values, the authors explain are
more measures of what leaders do and where they spend their time than of what
they say. Innovative enterprises depend on being entrepreneurial, promoting
creativity and encouraging continuous learning. In particular, they are action-oriented
and avoid analysis paralysis. Ambiguity is tolerated when pursuing new opportunities
as this encourages greater exploration of possibilities to create new things. Most
importantly, failures are seen as learning opportunities, and people are not afraid to
fail, even when they encounter great adversity.

Behaviours in pursuit of innovation are telling. For leaders it means being ready to
kill off existing products to replace with new and better ones; listening and accepting
confrontation with stakeholders, supporting the vision and energising employees, to
adapt to new situations and to be ready to take decisions and risks when it is
necessary. Leaders persist in the innovative approach during adversity. For
employees, it means remaining flexible, persistent and adaptable. It means
maintaining a high level of capability and devotion; following the firm through what
may be difficult times. If the individual doesn’t like change and challenges, then it
may be better for them to seek new employment. (Rao and Weintraub, 2013).

32
Rao and Weintraub define Climate control as the lifeblood of the workplace culture
(Chapter 1). An innovative firm encourages independent thinking and risk-taking,
rewarding the innovators at any level, with freedom and money, making an
ecosystem of safety and stability, promoting diversity and helping teamwork. Trust,
integrity and openness are background requirements. The most innovative
companies recognise that people engaged in transformation cannot be distracted by
the risk of the decision. Otherwise, they will never engage with new ideas (Rao and
Weintraub, 2013).

Resources include three main factors: people, systems and projects. It means hiring
the best quality talent and remunerating them appropriately. An innovative firm
encourages communication and good relationships with suppliers and customers. At
the same time, it needs to allocate adequate resources in space, money and time
(Rao and Weintraub, 2013).

Processes are the routes innovations follow as they are developed. Ideas can come
from anyone, so the innovation catchment group should be as broad as possible. A
filter can then define the ideas, and prioritise to ensure delivery in a reasonable
timeframe. The realisation or shape of an idea must follow soon after, with the
underline to ‘fail smart’ - innovative firms stop projects quickly based on predefined
failure criteria. They learn and move on (Rao and Weintraub, 2013).

Innovation success can be measured at three different levels: external, enterprise

and personal.

Externally - customers believe the firm is innovative from its actions, or the
innovation adopted may result in a better financial performance in comparison with
competitors. Innovative companies reward people independently by their outcomes,
(remuneration for their participation in a risky opportunity), stretching and building
competencies by their involvement in new initiatives. On a personal satisfaction
point, innovative firms support the involvement of the individual in innovative
initiatives (Rao and Weintraub, 2013).

33
4. Cables Industry

“The story of the gradual evolution of electrical wires and cables from early
experiments in electrostatics telegraph to super tension power, superconductivity
and optical fibre telecommunication cables, is fascinating”. (Paraphrased) (Black,
1983).

It is a journey of radical and incremental innovations. The companies that were

unable to keep up with the pace went bankrupt. The most recent ones were B3
cables in 2012 and AEI in 2013. In some cases an incremental innovation
transformed into radical innovation, in another case, the effects of radical innovation
have not been noted, due the fact that the legislator forced company to share the
innovation with its competitors, to preserve competition on the industry.

4.1 Radical and incremental innovation in the cable industry

Many of the industry’s processes have been around since ancient Egypt however,
the cable industry began with Michael Faraday, discovering the principle of the
dynamo in 1831 (Black, 1983). Even though it was only useful after the discovery of
the voltaic cell by Alessandro Volta (1800) that made a continuous and reproducible
electric current available (as used by Grammes in 1871), it is still noted as the
industry’s birthplace.

Faraday’s concept enabled a satisfactory and economical source of electric power.

In 1844, Morse sent his first telegraph message; Telegraph Construction and
Maintenance Company (Telcon) made the 1865 and 1866 transatlantic cables (as its
forerunner Glass, Elliot & Co). In 1857 and 1858 a telegraph line was laid cross-
Atlantic Ocean, U.S. to Europe, using Gutta percha electrical cables, protected by
rubber and vulcanised bitumen insulation. In 1861, the Pony Express gave way to
the superior reach of the US’ coast-to-coast telegraph service. The
telecommunication revolution started (Black, 1983).

34
In 1876, Alexander Graham Bell patented the telephone (invention) and the
telegraph industry was “disrupted” by the new technology creating a new
telecommunications industry (Chandy and Tellis, 1998).

At the same time, Edison developed Edison’s bulb (invention), adopting the words of
Adner, “The light bulb on its own was a miraculous invention but needed the
development of the electric power network to turn it into a profitable innovation.”
(Adner 2012).

By the end of 1879, Merlo Park was illuminated with Edison’s bulbs. His energy
transmission relied on a wire - and cables were in demand. Two radical innovations
(telephone and bulb) produced two industries: telecommunications and energy
(Market Line Nov. 2014). Entrepreneurs began setting up cable manufacturing
facilities. In 1872, Gian Battista Pirelli founded Pirelli, the leading manufacturer in the
cables industry today.

Callender's (now Prysmian Cables), began manufacturing insulated cables in the

1880s at its Erith site on the Thames. British Insulated Cables’ arrived in 1890 with
the British Insulated Wire Company at Prescot, near Liverpool (Moore, 1999).

Industry growth was linked to developments in each manufacturer’s country and

incremental innovations drove product improvement and diversification. In 1890,
Ferranti (Pirelli) developed 10kV tubular cable and introduced paper insulation
technology.

In 1894, student Marconi began experimenting with radio waves. Incorporating the
earlier scientific work of Henry R. Hertz and Oliver Lodge in electromagnetic
radiation, he developed a basic wireless telegraphy. Though not a scientist, Marconi
recognised the value of wireless technology and convinced investors. In 1897, he
received his first English patent. A radical innovation entered the market and the
cables industry had to adapt. In 1914, Hochstadter’s work enabled distribution
voltage to be increased to 33 kV.

35
In 1926 Emanueli (Pirelli) introduced pressurisation, resulting in fluid-filled paper
cables for a voltage of 66 kV upwards. In the 1930s, PVC insulation was trialled in
Germany and in 1943 the first three-core 132kV pressure went into service (Moore,
1999).

After the dynamism during two world wars, the cable industry matured, with several
mergers and acquisitions. In 1945 British Insulated Callender's Cables (BICC) was
formed by the merger of long established firms - Callender's Cable & Construction
Company Limited and British Insulated Cables. The UK was the worldwide industry
leader.

The post-war reconstruction and the second industrial revolution (the '50s) heralded
a new era and new technologies. PVC for power cables arrived at the end of the
decade and aluminium sheaths were developed, initially for pressure-assisted wires.
Aluminium conductors were gradually adopted for power cables and in the 1960s,
significant distribution economies were obtained with combined neutral and earth
wires. The first 400 kV FF cable was operational by 1969 (Moore, 1999).

In 1966, Tratos was established by Ing. Egidio Capaccini. The name comes from the
amalgamation of Tra (Trafilerie) and Tos (Toscane), which means Tuscany Drawing
Mills. In 2011, Ennio Bragagni Capaccini said: “Every end marks a new beginning”.
For my Grandfather, Egidio Capaccini, that end was the culmination of WWII. His
hometown in Southern Tuscany was almost destroyed (fig.2). With little or no work
available, he travelled to Argentina to find a job. After a year of working a regular job,
Egidio was offered employment in a cables factory. He swiftly rose to become
general manager, and a shareholder, before coming home with dreams of starting a
business of his own.

36
Figure 2: Remnants of the textile industry in Southern Tuscany

In 1966, he established Tratos Cavi Spa. He employed workers from the remnants of
the textile industry that had once flourished in Southern Tuscany. Their experience
proved useful when it came to covering the cables with textile. The business
expanded over the years and Tratos cables quickly gained a reputation for being
exceptionally well-made.

Revolution in Persia and access to new raw materials provided fresh impulse to the
industry and in 1978 thermoset insulation began to be more widely used as an
alternative to paper insulation. Benefits also extended to large commercial
applications up to 15 kV and higher voltage experimental installations. By the 1980s,
the telecommunications market had introduced optical fibre into overhead lines.

37
Tratos became the European telecommunications cables market leader, and in
1987, began production of fibre-optical cables for world markets. The expanded
company became a major supplier of energy, transport and infrastructure, oil and
gas, petrochemical, mining, tunnelling, and fire resistant cables (Moore, 1999).

The discovery of high-temperature superconducting materials was harnessed to

alleviate the effects when cables are involved in fires. The new cables offered
reduced flame propagation, low smoke emission, reduced emission of noxious
fumes and corrosive gases and combinations of these characteristics.

In the 1990s, optical fibres enjoyed widespread use in overhead lines. Polymerics
were extended to EHV and the commercialisation of PPL followed, with practical
demonstrations of superconducting cables. Globalisation drove cable industry
maturation and 1999 saw the end of British market domination. BICC slimmed-down
and sold off businesses (Moore, 1999).

Game-changing technology arrived in 2000 with the introduction of superconductor

cables for the higher power transmission Iter project (radical innovation). In 2005,
Pirelli spun off its cable operations, (now Prysmian). With mergers and acquisition,
Prysmian became the worldwide industry leader, and technologies developed in its
Italian factories went global. In 2008 Tratos’ innovation won the superconductor
order for Fusion for Energy, a unique project reproducing the sun’s fusion reaction.

4.2 Overview of the cable industry

To better contextualise the innovative landscape Tratos occupies (chapter 4.4), I

have reviewed the industry using the Five Forces of Porter (Porter & Kramer, 2011).
To do it, I have used the most recent and available data from MarketLine (November
2014), Uvais Lyman (2015), and ICF (2014).

A critical foreword is that the cable industry has always been regulated due to its
importance for economic growth. The government has controlled competition,
standardising products and applications.
38
Several organisations unify the cables market worldwide. The largest and global
association is ICF (International Cable Makers Federation), that has almost 100
members, including Tratos, from nearly 40 countries. Members are from large
companies with factories or subsidiaries in several countries. The two most
dominant groups, Prysmian and Nexans’ 2014 combined sales figures total €13.2
billion (US$14.2 billion) (Fig.3). They hold the largest geographic “footprints” in the
industry, but many other members have operations in multiple countries worldwide.

The oldest cable association is IEEE evolved from the American Institute of Electrical
Engineers (AIEE), which started in 1884, Sycable of France began in 1917, the Wire
Association International in 1930, and the JCMA of Japan in 1948.

Prysmian has plants in 50 countries and Nexans in 40 (Fig.3).

Figure 3: Billions Euros’ Turnover, cable manufacturers

Source: Prysmian annual report, 2014

39
Figure 4: Global cables market category segmentation: percentage share, by value,
2014(e)

Source: MARKETLINE

According to the MarketLine power cables is the largest segment of the global cables
market, with 70.7% by value and the telecommunication accounts for the remaining
29.3% (Fig. 4). “The global cables market is expected to generate total revenues of
$93,804.9m in 2014, representing a compound annual growth rate (CAGR) of 8.3%
between 2010 and 2014 (fig.6). In comparison, European and Asia-Pacific markets
will grow with CAGRs of 5% and 10.5% respectively, over the same period, to reach
respective values of $21,648.9m and $50,783.6m in 2014.” Moreover, “The global
cables market grew by 9.4% in 2014 (fig. 5) to reach a value of $93,804.9 million.”
(MarketLine, 2014).

40
Figure 5: Global cables market value: $ million, 2010-14(e)

Source: MARKETLINE

Figure 6: Global cables market value forecast: $ million, 2014-19

Source: MARKETLINE

41
According to MarketLine (2014) “In 2019, the global cables market is forecast
to achieve a value of $136,044.5 million, an increase of 45% from the figures
for 2014. The compound annual growth rate of the market in the period 2014–
19 is predicted to be 7.7% (fig.6).” “(..)The global cables market has
experienced strong overall growth in recent years, alleviating rivalry. (..) Asia-
Pacific accounts for 54.1% of the global cables market value. Europe accounts
for a further 23.1% of the global market (fig.7).” (MarketLine, 2014)

Figure 7: Global cables market geography segmentation: percentage share, by value,

2014

Source: MARKETLINE

According to IBIS, the Top 100 producers generated insulated wire and cable
revenues of US$110 billion in 2014 representing 51% of the global market. The
world insulated wire and cable market reached a total of US$215 billion in 2014
(Marketline 2014).

42
Some conflicting advice comes from IBISWorld, which estimates that the: “Other
Wire and Cable Manufacturing industry has entered the decline stage of its life cycle,
since it has begun to lose domestic and global market share. Import penetration is
expected to increase over the next five years, and export growth is forecast to lose
its momentum. Industry value added, which measures the industry’s contribution to
the economy, is expected to rise at a compound annual rate of 1.6% over the 10
years through 2019-20. In particular, the UK economy is expected to grow at a
compound annual rate of 2.2% over the same period”. “This indicates that the
industry will account for a declining share of the overall economy”. (Uvais, 2015).

In the same line according to ISF report 77 issue on October 2015 in the last three
years America's cable market lost 2.4% in 2012, 1% in 2013 and growth in 2014 was
0%. Europe lost 11.5% in 2012, 5.1% in 2013, and 3.3% in 2014; Asia, Africa and
Oceania lost 2.7% in 2012, 2.9% in 2013, and growth 0.1% in 2014; over all the
world cable market lost 4.6% in 2012, 3% in 2013, and 0.6% in 2014. It is a declining
market as per the chart below (fig.8) (ISF 2015).

Figure 8: Change in Wire & Cable Consumption by region:

Source ICF

43
An upturn in construction and investment in power generation and transmission will
be major growth drivers over the next five years, though they are not expected to
propel the industry into a new growth cycle, primarily because overseas operators
are set to gain both domestic and global market share (Uvais, 2015).

4.2.1 Forces driving competition in the global cables market

“Typical players (…) are well established, large (...) companies (…) able to benefit
from scale economies, and (...) compete more intensely on price; increasing rivalry
(fig.9).” (MarketLine, 2014). Buyers and suppliers have significant bargaining power
due their concentration in both cases they face oligopolies or monopolies, or legal
cartels, (such as the copper mines in South America) that fix the premium and the
prices. The attraction for new entrants is that distributors are always looking for price
reductions, however these are difficult to sustain because the cost of investment is
very high for very low returns (MarketLine, 2014).

Figure 9: Forces driving competition in the global cables market, 2014

Source: MARKETLINE

44
Tratos grew by building unique business modules, forging direct stakeholder
relationships (customers, suppliers) and refusing to deal with distributors or agents.
Innovation focused, the company facilitated direct discussions with customers to
establish technical needs. This direct line to customers’ technical people created the
opportunity to produce radical technological solutions alongside. Tratos stopped
selling a cable product, and began selling innovation-led solutions (Uvais, 2015).

Figure 10: Drivers of buyer power in the global cables market, 2014

Source: MARKETLINE

Buyers are large organisations (BT Telecoms, National Grid, Utilities, Enel, Eon, as
per figure 9), with very strong financial muscle, normally in monopoly or in oligopoly
positions and with a tendency to switch, due to price sensitivity and undifferentiated
products (fig.10) (Uvais, 2015).

“Buyers will typically buy cables on price and the capacity to deliver. This protocol
can delay or advance large projects, exposing players to reduced profit margins and
the constraints of increased buyer power. There is little chance of vertical integration
in either direction as buyers and market players operate very different businesses.
(…) A (…) degree of product differentiation can be achieved (…), based on
measurable performance. e.g. if a manufacturer produced fibre optic cables with
stronger signal strength and lower gap losses, they would command more buyer
45
attention. This would slightly weaken buyer power. Furthermore, cables are essential
to each buyer's business, (especially electricity transmission), although
telecommunication companies can use wireless infrastructure as an alternative.
Buyer power in the global cables market is assessed as moderate.” (Paraphrased)
(MarketLine, 2014)

To survive and grow in a difficult environment, Tratos focused in niches and on

innovation. In the 1900s it developed fibre optical products, in the 2000s it produced
cables for mobile applications, such as reeling cables for port cranes, and
specialised in high-speed products. In 2010 Tratos won an innovation award for
supplying the Superconductor cables for the world-stage Energy Fusion project
referenced earlier.

Cables are made from raw materials and compounds managed and controlled by
large organisations, so the bargaining power of the suppliers is significant (fig.11).

Figure 11: Drivers of supplier power in the global cables market, 2014

Source: MARKETLINE

46
Tratos invested in its own compounds (rubber, or Low smoke zero halogen
materials), to achieve additional control and competitiveness. It fuelled diversification
and dominance in niches by investing heavily in alternative products.

The large-scale of typical supplier companies means that they are usually specialists
in several areas – e.g. General Cable Corporation develops and sells to several
markets including energy, industrial and communications; Similarly, Nexans targets
energy and telecommunication infrastructure and various industrial and building
applications. These large players’ substantial geographical reach means they are
less reliant on revenues from one market, reducing rivalry to an extent. However,
“the investment-intensive nature of technological advancement and the need for
large manufacturing facilities, does present high exit barriers, which increases rivalry
(fig.12).” (Marketline, 2014)

Figure 12: Drivers of degree of rivalry in the global cables market, 2014

Source: MARKETLINE

Tratos’ decision to engage on a differentiation platform included introducing radical

technology to previously uneconomical markets. Due to years of competition on
price, several markets had become innovation wastelands. Companies were losing
money, and the markets were in decline. Tratos turned this to its advantage,
revitalising the most depressed markets with carbon fibre innovation for overhead

47
conductors, overtaking existing players.

Figure 13: Factors influencing the likelihood of new entrants in the global cables
market, 2014

Source: MARKETLINE

“Despite recent global economic turbulence, growth (…) has remained strong, (…) to
attract new entrants to the global cables market (fig13)” (Marketline, 2014).

The lure of easy profit is moderated by the difficulties that regulate the industry.
Buyers must approve suppliers as well as their products. Products have to be
approved by independent test laboratories. In the past a company could only operate
once granted a country license describing outputs and quantity and even, in some
cases, how much copper (the industry’s main element) they could import.

Institutes regulate and standardise the markets: IMQ (Italy) and BASEC (UK) but,
once a company had passed the various tests and approvals, it benefited long-term
as those high barriers to entry restricted competitors.

48
Any innovation must be standardised and approved by the relevant authority before
it can go into service. Unsurprisingly, there are few viable substitutes for this market.
The exception is Telecommunications where companies can bridge their cable
infrastructure with wireless links, (cellular networks/satellite-links). (Paraphrased)
(Marketline, 2014)

Figure 14: Factors influencing the threat of substitutes in the global cables market,
2014

Source: MARKETLINE

“(..) Brand loyalty in the global cables market is low. However, buyers are often
heavily reliant on cables for their own business, which evens out the balance of
power (fig.13). The providers of the industry’s raw materials have seen commodity
prices rise following economic recovery and prices to fall again recently (e.g. copper
fell from $8,828.2 per metric tonne in 2011 to $7,332.1 in 2013). There are few raw
material alternatives that boost suppliers’ power slightly. Typically, there are few
alternatives available to the market. Options such as wireless links or solar panels
are costly to implement without government support (e.g. solar power feed-in tariffs).
Strong, recent market growth will attract new entrants to this market.” (Paraphrased)
(ICF, 2014).

49
 4.3 Key Success Factor

I have identified two principal ways to achieve success in the cable manufacturer
industry.

The first one is the traditional way of competing. It is price-driven competition and
requires a guaranteed supply of raw material and significant economies of scale as
the main factors. “Having a guaranteed supply of (…..) materials such as copper and
plastics is necessary for cable manufacturers”. (MarketLine, 2014). “Manufacturers
need to operate their plants on a large scale if they are to offer import-competitive
prices”, (Paraphrased) (MarketLine, 2014).

The second way is to survive through differentiation and is rarer as it needs more
hard work and imagination; talents that are much sought after in the cable industry. It
also requires significant investment in research and technology and highly skilled
workforce.

The cable industry has been characterised by a sequence of radical innovations that
have shaped it. Some firms have been unable to adapt themselves; and have gone
out of business. “Investing in research and development is important in an industry
as technologically advanced as this” (MarketLine 2014). “Having access to highly
skilled employees is important in such a technical and highly skilled industry”
(MarketLine, 2014).

Tratos has followed this second way since 1966, and has interpreted it via
innovation, not only in technology, products, process but also through the brand and
other aspects.

4.4 Tratos Success Factor

Tratos is a family-owned business, strongly orientated toward exporting products

around the world. The firm has four factories, three in Italy, and one in the UK. From
these factories it produces the full range of cabling products from Fibre Optical cable,
to High Voltage (Figure 15).

50
Figure 15: Market Presence V Product Portfolio Range:

Source Prysmian annual report 2014

Tratos supply cables for more than 45 different applications: maritime, oil and gas,
railways, industry, utilities, ports, nuclear power station, submarine, and more. The
company is confined by the capacity of its four manufacturing facilities, with a
consequent impact on the ability to achieve economies of scale. However, Tratos
has access to the highly-skilled workforce, as evidenced by the broad range of
products, and the success of its research and development resource. It is renowned
for its tailor-made solutions. A combination of flexibility and that highly skilled
resource means it can produce to a brief and solve any issue around cable
applications.

51
Over the years, the company has specialised in delivering innovation. As
confirmation of its reputation as an innovative company, in 2008 Tratos studied,
produced and delivered Fusion for Energy superconducting wire for the world ITER
reactor and the Japanese JT60SA. The superconducting Cable-In-Conduit has been
used in the construction of magnets for these projects.

ITER is a unique international project to design and build an experimental fusion

reactor based on the "tokamak" concept. The project demonstrates the feasibility of
energy production by controlled thermonuclear fusion, to reproduce in the earth what
occurs naturally in the sun. The Fusion for Energy Agency (F4E) awarded Tratos
with a contract of €49 million thanks to the company’s long record of success on
delivery prototypes.

Tratos’ unique approach in the cable industry has been to invest a significant amount
of resource and money in innovation. This is one of the main motivators (since the
beginning of my MBA) to investigate the elements that could affect innovation and in
particular find a way to measure it and increase awareness of the Tratos approach.

52
 5. Methodology

5.1 Objective of the study

The purpose of this BMP is to analyse the culture of innovation in Tratos and to
understand Tratos employees’ perception of innovation. Do they see Tratos as a
product innovator only or a 360° innovation company? For that reason, I have used
“The 12 different ways for companies to innovate”, based on the research of
Sawhney and colleagues (Sawhney, Wolcott, Arroniz, 2006).

I built a survey, carried out a pilot survey followed by the main research. I scored and
analysed the responses and drew conclusions. I also discussed the survey results in
two different workshops, which produced further conclusions and recommendations.

5.2 Survey

The survey is attached in Appendix 1, with the letter of introduction for survey
respondents.

During the review of the literature, I realised that Rao and Weintraub’s work was
based on the premise that an organisation’s culture is the principal driving factor of
innovation, (more than nationality, environmental or any other factor). The above
assumption was in contrast with the overriding orientation, from Schein, that
organisational culture is influenced by several external factors included: national
culture, government policy, etc. Because of this I integrated the Rao and Weintraub
survey with 15 statements collected from a “climate change perception
questionnaire” (chapter 5.4.2), used by Forehand (1963) and Paulillo (1977), and
included the analysis of Abbey (1981) ‘technological innovation in the semiconductor
industry’.

I took this additional survey to measure the confidence in and in particular the
perception from employees of company stability, (first integration). I felt I needed a
verification of the Rao and Weintraub statement and the "climate change knowledge

53
questionnaire" helped to ascertain the understanding of employees regarding
changes.
In particular, I felt that the Italian site could be influenced by the effects of the on-
going economic crisis (and I was right). During the execution of this work, I also
found a fascinating tool based on the study of Sawhney and Colleagues (2006): “The
12 different ways for companies to innovate”, called the "Innovation Radar." The tool
helps understand how the company perceived innovation. Because the Rao and
Weintraub survey did not look at an innovation definition, I thought that the
innovation survey could be implemented with the radar tool.

I wanted to understand Tratos employees’ perception of how and where the

company innovates. Therefore, I included it in my approach (second integration). For
statistical and analysis purposes I also included several other questions to help fit
the approach to the shape of the Tratos business: location of work (Pieve Santo
Stefano, Catania, Knowsley, etc), job roles (Management, Sales, Technical,
Operative, Administrative) and years of service (appendix 1).

The survey was conducted from January to March 2016 across the Tratos Group.
I aggregated the survey results from the three primary (our factories) locations
(Pieve/Catania, Knowsley and London). In Italy, because of time pressures, the
study was not extended to the work floor staff (blue collars). For that reason I
subdivided the results into three groups according to the pay scale of employees,
resulting in a majority of white collar colleagues, such as London (called
‘International and grouped with China, Spain, Germany, Australia and Singapore
offices, etc.), Italy (Pieve and Catania), and UK (Knowsley) (Appendix 1).

I also translated the Survey into English and Italian for dual locations.

54
To clarify the aims and purpose of the survey and to anticipate questions the
following information was also provided:
1. The survey is to measure the degree of innovation perceived by Tratos employees
2. There are no 'right or wrong' answers - it is only about perception.
3. The survey is anonymous.
4. The results will be communicated to all when complete
5. The survey must be completed within 30 minutes.

5.2.1 Pilot Survey

Prior to the full survey a pilot questionnaire was distributed to identify issues of time,
accessibility and comprehension of the questions. The sample, a cross section of
male and female management was chosen, representing five different nationalities.
Feedback and results were recorded to improve the execution of the full survey.
No technical problems were highlighted but the survey introduction was amended
slightly to offer a more detailed explanation of how to complete it e.g. to avoid
persistently choosing `middle ground’ answers.

5.2.2 Survey Results

Analysis of the results is summarised in chapter 6.

5.3 Workshop

Results were analysed by executives in two workshops, carried out in London, to

review the findings from the survey and to draw conclusions from the results. The
results from these workshops are summarised (chapter 6.4.1 first workshops,
chapter 6.4.2 second workshop) and have helped to inform this report’s
recommendations. All the attendees received the results a week in advance, without
any comments, with a copy of the article of Rao and Weintraub, to familiarise
themselves with the subject and the methods used to frame the survey which would
be the basis of the discussion.

55
Results were published on the company intranet a few days after completion and
meetings organised seven days after publication.

5.3.1 First workshop

The first workshop was attended by the sales team, technical team and executive
members (Chapter 6.4.1).

This workshop, held on 26 February 2016, involved the Tratos UK management

team (including sales and key administrative staff). A total of nine people attended.

The workshop considered only the results from international and UK (London, China,
Germany, Dubai, Spain, Chesterfield and Knowsley) – the Italian results were not
available at the time.

During the first workshop, I addressed the following questions:

1. Do the results reflect our company? Do they give a true and accurate
representation of the current situation?
2. Based on these results what are the key strengths and weaknesses of Tratos
regarding its ability to be an innovative company?
3. What are the key changes that are required?
4. Do we want to change?
5. What are the priorities?

5.3.2 Second workshop

This workshop, held on 14 March 2016, involved some members of the Tratos UK
Board. Six people attended. The workshop considered the full results and analysis
of the survey (Chapter 6.4.2).
During the first workshop, I addressed the following questions:
1. Do these results give an accurate representation of Tratos and its culture?
2. Based on these results what are the strengths and weaknesses?

56
3. What are the opportunities presented?
4. What are the next steps?

5.4 Explanation of the surveys used as a basis for the Tratos

Questionnaire

The following three models were used as the basis for the Tratos questionnaire. In
some cases the questions shown below were adapted or reworded (see Appendix 1)
to improve relevance to the company and to give greater clarity.

5.4.1 The Building Blocks of Innovation Survey

The Culture of Innovation questionnaire (Appendix 1) has a total of six building

blocks, 18 factors and 54 elements. Survey respondents should rate their
organisation on each of the elements, on a scale of 1 to 5 (Appendix 1).

The overall average scores for elements are further averaged to provide the factor
score, and the factor averages similarly result in the building block average. That
average of the six building blocks is what has been called the group’s “Innovation
Quotient” (Rao and Weintraub 2013)

5.4.2 “Climate change perception questionnaire”

I integrated the Rao and Weintraub survey with 15 statements collected from a
“climate change perception questionnaire”, used by Forehand (1963) and Paolillo
(1977), and adopted in the analysis of Abbey, 1981 ‘Technological innovation in the
semiconductor industry’. I took this additional survey to measure the confidence or,
better, the perception from the employees of company stability, (first integration). I
thought that I needed a verification of the Rao and Weintraub statement and "climate
change knowledge questionnaire" helped to verify the understanding of employees
regarding changes (Abbey, 1981).

57
Statement:
1. (Autonomy): Degree of freedom members have in day-to-day operating
decisions.
2. (Conflict Vs Cooperation) Degree to which members either compete with each
other or work together on the process of getting things done; extent to which
members integrate their own personal goals with those of other members and
the goals of the unit and the organisation.
3. (Supportiveness) Degree to which the organisation is interested in and is
willing to support its members in both job and non-job related matters.
4. (Level of Rewards) Degree to which members are rewarded.
5. (Structure) Degree to which the organisation specifies the members and
procedures used to accomplish tasks.
6. (Performance Reward Dependency) Extent to which the reward system
(salary, promotions, benefits, etc.) Is fair and appropriate.
7. (Motivation to Achieve) Reflects the degree to which the organisation attempts
to excel; the strength of its desire to be number one.
8. (Status Polarisation) Degree to which there are definite physical and
psychological distinctions between hierarchical levels in the department.
9. (Flexibility) Willingness to try new procedures, to experiment with change.
10. (Decision Centralisation) Extent to which the organisation delegates the
responsibility for making decisions either as widely as possible or centralises
it as much as possible.

According to the authors, answers to the above statements should be on a scale of 1

to 3: 1- Not changed. 2- Has changed somewhat but not to the extent it is affecting
department operation. 3- Has changed significantly to the extent of probably having
an effect on the way the department operates and how objectives are accomplished.

However, for the purposes of this survey we framed the questions so that a
consistent response format could be used – i.e. Not at all; To a small extent; To a
moderate extent; To a great extent; To a very great extent.

58
5.4.3 Questionnaire on Tratos perception of innovation.

The second integration, I did was add 12 statements to understand the philosophy of
innovation on Tratos’ employees. The statements are based on the research of
Sawhney and colleagues: “The 12 different ways for companies to innovate” (Fig.16)

Figure 16: Innovation Radar

Source: Sawhney, Wolcott and Arroniz (2006)

The tool, called an "innovation radar (fig. 16), comprises four key dimensions that
serve as business anchors: (1) the offerings a company creates, (2) the customers it
serves, (3) the processes it employs and (4) the points of presence it uses to take its
offerings to market. Between these four anchors, the authors embed eight other
dimensions of the business system that can serve as avenues of pursuit. Thus, the
innovation radar contains a total of 12 key dimensions:” (what) offering, platform,
solution; (who) customers, customers’ experience, value capture; (how) process,
organisation, supply chain; (where) presence, network, brand.

59
I included 12 sentences to verify the perception of Tratos’ employees on innovation,
to understand if they perceived Tratos as only a product innovator or a 360°
innovation company. These statements have been identified through my knowledge
of the industry (Sawhney, Wolcott, Arroniz, 2006).

Statements:
1) Offerings: Tratos develops innovative products and services
2) Platform: Tratos makes different cables using the same equipment
3) Solutions: Tratos sells customised products and services
4) Customers: Customers are always the same
5) Customer experience: Tratos has a friendly interface with customers
6) Value capture: Tratos sells only cables
7) Processes: Tratos has a continued monitoring of process efficiency
8) Organisation: Everybody in the company knows their duty
9) Supply chain: Supplier selection is based on a web-based platform
10) Presence: Tratos continuously opening new offices around the world
11) Networking: Tratos has a system for customers to get offers
12) Brand Tratos’ brand means innovation

Answers to the above statements were on a scale of 1 to 5 (Appendix 1).

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6. Analysis and Results

Charts showing the scores for the main categories of innovation across all three sites
are in Appendix 3. A list of factors scored is in Appendix 4. A list of each element
marked is in Appendix 5.

6.1 Sample

Among 110 people, 99 completed the review.

According to the authors of the Rao and Weintraub study, “the value of the survey
increases as the sample size increases, particularly when respondents come from
different corporate hierarchy and various units of the company”. Rao and Weintraub
(2013)

I considered the example relevant for the analysis, as 100% of the UK staff
responded and 49 of 60 of the Italian factory staff did, from more than five
departments, around seven countries.

The 99 respondents can be broken down by working location. Fourteen belong to

the International Offices (London), 36 from the Knowsley plant (alternatively called
the UK), 49 from the Pieve and Catania plants (Italian Factories). The subdivision by
job function is also relevant, 20 members management and employees from several
different departments 22 from the sales, 17 from technical, 31 from operational, and
9 from administration.

6.1.1 General remarks

The respondents
There is evidence from the results of the survey that many respondents had a
tendency to choose the ‘middle ground’ in their answers (i.e. ticking option number 3
- ‘to a moderate extent’).

The effect of this was a clustering of responses around a ‘neutral’ position which
made it difficult to identify any clear views (i.e. overwhelmingly positive or
overwhelmingly negative) and in identifying any significant variances in opinion
between the questions. I can only speculate about the reasons for this behaviour.
61
It could be that some respondents did not feel they had the knowledge or experience
required to take a view about certain questions. Another reason could be that,
despite the guarantee of anonymity, there were fears about the consequences of
responding negatively. A third reason could be that some respondents were not
sufficiently engaged or interested in the survey and its results. I cannot know the
answer and therefore must take the results at face value.

The relatively low number of respondents in Italian factories is worth noting. This
may be because Italian employees were not sufficiently aware of the reason for the
survey or its importance. I will consider if it is worth running the survey again in Italy
at a later date to encourage more responses from this location.

The results overall

Overall the results are encouraging, showing a positive response and demonstrating
that Tratos has the right environment for innovation (the infrastructure) and the drive
to support innovative practices (Group Innovation Quotient 3.50 against 5). There
are some particularly positive findings discussed below (capturing and enabling
elements ranked 1 out of 18, with the same score of 3.75). However, there are also
areas of concern and some relatively negative outcomes which may be holding the
company back from achieving its full potential (engagement ranked 18 out of 18
elements).

In general, the responses from the factories (Knowsley, Catania and Pieve) were
less positive (Innovation Quotient of UK 3.24, and Italy 3.39) than the responses
from staff reporting to the London office (Innovation Quotient of International office
3.85). And, in general, the responses from operative and administrative staff tended
to be less positive than the responses from sales and managerial staff.
I have looked at the differences in responses both between sites and between job
function and have concluded that the differences between sites are more significant.

62
 6.2 Result Analysis

I have scored the 54 elements according to the Building Block of Innovation Survey.
Then I have averaged that result and aggregated on the 18 equivalent factors
obtaining the Factor Average. Similarly, I have averaged the equivalent factor to the
blocks to arrive at the Building Block Average. Finally, I have averaged the 6 Building
Block Average and obtained the "Innovation Quotient" (Appendix 3 results).

Rao and Weintraub's study creates a scale to measure the innovation culture inside
the company. Up to 1 means not at all, up to 2 to a small extent, up to 3 to a
moderate extent, up to 4 to a great extent and up to 5 to a very great extent.

Employees ranked Tratos as 3.50 (Tratos Innovation Quotient) out of 5. According to

the scale of Rao and Weintraub's study, Tratos has to a "great extent" a culture of
innovation. Different ranks have been obtained by the locations: 3.85 International
(London), 3.24 UK (Knowsley), and 3.39 Italy (Catania and Pieve) (Table 1).

Table 1: Measure of Tratos’ innovative culture at each site

Survey Questions London Knowsley Pieve Average
& Chesterfield (K&C) (all sites)
Innovative Culture 3.85 (77%) 3.24 (65%) 3.39 (68%) 3.50 (70%)
(Questions 1-54)
Work Climate 3.91 (78%) 3.13 (63%) 2.95 (59% 3.33 (67%)
(Questions 55-73)
Means of innovation 3.49 (70%) 3.41 (68%) 3.40 (68%) 3.43 (69%)
(Questions 74-85)

These various results, in my opinion, are down to two primary reasons: the external
and internal environmental.

For external environmental, there are national factors that come into force. For
instance, the people in Italy have not yet recovered from the last great recession
(began in 2008). The climate, in which they are living, also influences their
perception of the organisation. In fact, Italy scored lowest on the “Work Climate
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Survey” (Abbey & Dickson, 1983), (2.95) against an International (3.91) and UK
score (3.13) (Table 1), even though the Italian site is the leading innovative factory of
the Tratos Group.

There are a mix of internal environments, the "working climate" found in the single
offices. London is Tratos’ research and innovation headquarters and this element
brings all the staff continuously into contact with new challenges that move
everyone, forcing better communication and information sharing, a climate that
differs from that in local manufacturing sites. In fact, the "climate block" is ranked at
the 4th position in International (3.74) against the 6th for Italy (3.00) and UK (2.96).

The three elements that contradict the collaboration factor (climate block),
(community (Com.), diversity (Div.) and team working (T.W.) are respectively ranked
higher in International (Com. 3.86, Div. 3.57, T.W. 3.79), than in Italy (Com. 3.12,
Div. 3.04, T.W. 3.20) and UK (Com. 3.09, Div. 3.17, T.W. 3.00). Another reason
could be the proximity to the top decision makers; international staff members are
more involved in innovation than those at manufacturing sites.

Tratos’ employees, according to “The 12 different ways for companies to innovate”,

ranked the company 3.46 with no significant distinction between sites (International
3.48, UK 3.42, Italy 3.48) (Table 1).

If we consider the results under each sub-section of the Rao & Weintraub survey
(Questions 1-54, Appendix 3), we get a clearer picture of where the company is
relatively strong and relatively weak (Strongest highlighted in green, weakest
highlighted in red, Table 2).

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Figure 17: Graph of Survey Results

Tratos employees ranked high Value (3.64) and Success (3.54) at position (ranked
No. 1, and 2 out of 6 blocks), lower Behaviour (3.49) and Climate (3.30), (ranked
respectively 5 and 6 out of 6 blocks), (Table 2), with substantial differences between
the sites. International ranked No. 1 Behaviour (4.05), No. 2 Values (4.03), No. 5
Success (3.73) and No.6 Process (3.67). The UK ranked No.1 Success (3.38),
No.2 Value (3.30), No. 5 Behaviour (3.15) and No. 6 Climate (3.02). Italy ranked
No.1 Value (3.59), No.2 Process (3.52), No. 5 Behaviour (3.28) and No.6 Climate
(3.10).

The positive feedback is that Value is ranked No. 1 or 2 by the Tratos’ employees,
the astonishing part is that Behaviour ranked No. 1 by International and No. 5 by
Italy and UK. Also, Success presents a polarised position ranked in top place by
Italy and UK, and No.5 by International (London), where Italy and UK ranked
Behaviour in 5th place.

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Table 2: Comparison of Tratos’ strengths and weaknesses with regard to an
innovative culture
Question 1-54 (Culture of Innovation) Average Score Overall
VALUES: 3.64
Entrepreneurial
Creativity
Learning
BEHAVIOURS: 3.48
Energise
Engage
Enable
CLIMATE 3.30
Collaboration
Safety
Simplicity
RESOURCES 3.50
People
Systems
Projects
Processes 3.50
Ideate
Shape
Capture
Success 3.54
External
Enterprise
Individual

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These summary scores suggest that Tratos has the means (or the infrastructure) to
support innovation (desire to explore new opportunities ranked No. 1 out of 54
elements). In addition, the company is governed by strong values and these values
relate to key aspects of innovation, e.g. entrepreneurial attitudes (ranked No. 2 out of
54 elements), a spirit of enterprise (ranked No. 6 out of 18 factors), creativity (ranked
No. 8 of 18 factors) and inspirational leadership (ranked No.1 of 18 factors).

On the other hand the summary scores suggest that aspects relating to the working
Climate (ranked No. 6 out of 6 blocks) may be holding the company back:
specifically, there is evidence of a relatively low level of trust and collaboration
(ranked No. 52 out of 54 elements), decision-making (ranked No. 52 out of 54
elements) is not widely devolved and the company relies on rather bureaucratic and
rigid systems and procedures (ranked No. 16 out of 18 factors).

Whilst the overall scores provide a positive picture, these summary figures hide
some relatively high and relatively low scores in certain areas which can only be
identified by a further analysis – these variations merit particular attention. The
overall scores also obscure some of the relevant differences between sites in their
responses. The next section explores the results more fully and considers the
variations so that we can begin to reach some conclusions and identify some
practical next steps.

6.3 Detailed Analysis

Tratos’ employees ranked the company high on enabling (ranked No 1 out of 18

factors), that is the capacity of the leader to influence strategy capable to navigate
the team around organizational obstacles, and his persistence to follow opportunities
even in the face of adversity, with the ability to adapt action when needed.

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Tratos’ staff marked high in capturing (ranked No 2 out of 18 factors), the ability of
the company to launch new products, allocating resource and capabilities necessary
and be flexible to execute the processes. They also ranked high for external success
factor, which they ranked 3 among 18 factors and enterprise success (ranked No 6
out of 18 factors).

However, employees ranked poorly on the individual component (ranked No 15 out

of 18 factors). Participation by employees in the innovation process and their
rewards for involvement in risky opportunities were examined, and the ability of the
company to build people’s competencies by their involvement in new initiatives, was
a factor that ranked no. 54 out 54.

Employees also marked very low simplicity (ranked No 16 out of 18 factors):

minimising rules, policies, bureaucracy and rigidity to simplify the workplace,
accountability, responsibilities and decision-making. They also scored very low
entrepreneurial (ranked No 17 out of 18 factors), the ability to explore the
opportunity, create new things, the capacity to tolerate the ambiguity when pursuing
new opportunities, and the action-oriented company; that is the ability to avoid
analysis paralysis when a new opportunity has been identified by exhibiting a bias
towards action.

Employees ranked the company's leader as poor on engaging the rest of the
workforce; the engaging factor (3.16) ranked lowest among the 18 factors, in
particular, it scored poorly in Italy (2.84) and UK (2.84). Employees did not take the
initiative in the innovation process (ranked No. 48 out of 54 elements), perhaps partly
because the leaders did not coach them (ranked No. 50 out of 54 elements). A large
element of employees felt leaders did not provide feedback and support (ranked No.
48 out of 54 elements) (Appendix 4).

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6.3.1 The highs and lows

First, we look at the highs and lows. The highest scores point to the company’s key
strengths – it is important to appreciate these. The lowest scores highlight areas of
concern for the company, where action needs to be taken to bring about
improvement (Appendix 5).

Tratos’ employees ranked the company highly on ambition – ‘entrepreneurial’ - the

desire to explore opportunities and to create new things (ranked 1 out of 54
elements).

Tratos’ employees gave the company high marks on the success of innovations that
have helped the company develop new capabilities (ranked No. 2 out of 54
elements). They also perceived leaders were able to modify and change the course
of action when needed (ranked No.3 out of 54 elements).

Tratos staff expressed satisfaction in Tratos’ innovation efforts that have led the
company to better financial performance than others in the industry segment (ranked
No.4 out of 54 elements).

They also believed leaders are encouraged to persist in following opportunities even
in the face of adversity (ranked No.5 out of 54 elements), and for that reason the
company is constantly experimenting and expanding its innovation efforts (ranked
No.3 out of 54 elements).

Many employees felt that leaders did not provide support during both successes and
failures (ranked No.48 out of 54 elements), as consequence people at all levels did
not proactively use their initiative to innovate (ranked No.49 out of 54 elements).
Perhaps because leaders did not coach and provide feedback in any innovation
efforts (ranked No.50 out of 54 elements), or because they did not know exactly how
to get started and move initiatives through the organisation (ranked No.51 out of 54
elements). In this situation, people did not take responsibility for their actions and
they did not avoid blaming others (ranked No.52 out of 54 elements).
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Probably there needs to be an improved recruiting and hiring system in place to
support a culture of innovation (ranked No.53 out of 54 elements). Certainly, the
perception of employees is that the company does not reward people for
participating in potentially risky opportunities, irrespective of the outcome (ranked
No.54 out of 54 elements).

It is important to point out that for many staff at Tratos (particularly factory
employees), risk-taking, freedom and autonomy would be completely inappropriate,
given the nature of their work. The relatively low scores in these areas may reflect
this situation and should therefore be considered in context.

6.3.2 The differences

As part of the deeper analysis, we looked at the differences between respondents by

comparing the answers across job functions and across several sites (London,
Knowsley/Chesterfield, Catania, Pieve, China, Germany, Spain and Dubai). The
comparison across job functions produced fairly flat distribution charts for all sections
of the survey. The one exception was a slightly lower score for operatives in the
‘working climate’ section (Q55-73) where the score overall for operatives was 2.87
compared to an average of 3.36 overall. Apart from this important exception it can be
assumed that, whatever their job function in Tratos, people’s perceptions are
generally the same.

This is an important finding, which largely rules out any suggestion that white collar,
and manual workers, perceive the company in differently.

Comparisons between sites revealed more significant differences, suggesting that

people reporting to the London office have a more positive perception overall when
compared to both Italy (Pieve) and UK (Knowsley/Chesterfield, K&C). When
considering these differences it should be born in mind that London accounts for only
14% of the respondents and does not include any operative staff.

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Table 3: Variance between sites in survey results.

The most significant variances between all three sites were found for the following
questions:
Question London K &C Pieve
(International) (UK) (Italy)

Q.61. (Level of Rewards) Tratos employees are 4.54 2.25 2.81

rewarded for good performance
Q.15 (Support) Our leaders provide support to 4.14 2.74 2.86
employees during both successes and failures
Q.65 (Fairness of Reward) Employee rewards at 4.34 2.57 2.60
Tratos are based on a person’s worth, ability and past
performance
Q.68 (Status Polarisation) There is no definite 4.14 2.71 2.60
hierarchy within Tratos. We are all treated equally
whatever our status.
Q.26 (Accountability) People take responsibility for 3.93 2.74 2.49
their own actions and avoid blaming others

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Figure 18: Variance between sites in survey results

The distribution charts provided in Appendix 3 present a clear picture of the

differences between sites for each of the key sections of the survey. From these
charts, we can see that flatter distributions for the categories of Success, Processes
& Infrastructure are balanced by more significant differences in terms of Climate and
Behaviours. Overall, the analysis confirms that perceptions in Pieve, Knowsley and
Chesterfield are less positive than those in London. The difference could be
explained with the ranking of the factors belonging to behaviour (which includes
Energising, Enabling and Engaging).

Tratos’ employees rated engaging factor No 18 out of 18 factors, with a huge

difference between sites (International rated 3.78, UK 2.84 and Italy 2.86). Overall
the elements of engagement (support, initiative and coach), are scored at position
48, support (Int. 4.14, UK 2.74, IT 2.86), 49, initiative (Int. 3.64, UK 2.94, IT 2.86),
and 50, coaching (Int. 3.57, UK 2.83, IT 2.86), among 54 elements. This is how
differently employees in the International Office perceive the company - as very
active in coaching and supporting the personal initiative of the individual. To counter
this, people in the factories see a lack of those attentions.

This is explainable with the different functions within the organisation. International
has a more commercial focus while the factories are more production orientated.

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Several coaching meetings are organised during the year via Tratos Academy to
educate the sales team to promote the latest innovation while the factory teams are
not involved in this educational part.

6.3.3 The Italian culture

Instinctively one might expect that staff working in Pieve would have a more positive
perception of Tratos than their colleagues working in the UK or in the International
offices.

They are closer to the company; more are long serving and have more exposure to
the innovative work-taking place in the factory. However, it is important to bear in
mind that, while this survey is concerned with corporate culture, it does not take any
account of the differences in culture between the countries and economies. It should
be appreciated that Italy today suffers from many deep-seated economic problems.
Confidence in the country’s economy has been falling over the past four years and
the latest indicators show a mixed outlook for Italy’s economic future. This
uncertainty has an impact on employment and employee attitudes, creating job
insecurity and low morale amongst the working population (as described in chapter
6.2). Such factors will almost certainly influence the way in which employees
respond to the survey’s questions.

The results contrast particularly on the Climate block scored at 6th position from the
manufacturing sites and 4th place for International (as described in chapter 6.3.2),
and the Behaviour scored in 5th position from the production sites and 1st place from
International.

Nevertheless, considering all the possible explanations the company should be

concerned about the differences in perception as revealed by this analysis.

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 6.4 Workshops

Workshops took place in London, to review the findings from the survey and to draw
conclusions. The results are summarised below and have helped to inform this
report’s recommendations, however, the work produced was more connected with
organisational structure than with innovation culture implementation.

6.4.1 Culture of Innovation Academy Workshop 26th February 2016

The key outcomes and conclusions from this workshop were:

The results are promising (Innovation Quotient 3.50). Tratos has invested
heavily in staff (People is ranked No. 6 out of 18 factors), product knowledge
and external communication (Learning ranked No. 4 out of 18 factors). Many
staff have a strong sense of belonging and loyalty to the company (trust is
ranked no. 23 out of 54 elements).
Without change, it was felt Tratos cannot be an innovative company
Lack of leadership is considered a problem at Knowsley, which could explain
the relatively negative perceptions coming through in the survey. This
conclusion was not based on any data but just a perception, in fact the
enabling is ranked No.1 out of 18 factors in each site with highest score (Int.
3.86, UK 3.54, IT 3.84), and all the results are above Innovation Quotient of
3.50.
Over-complicated and ‘behind closed doors’ decision-making (ranked No.50
out of 54 elements) can stifle innovation, causing mistrust and tends to be
removed from management level (openness is ranked No 35 out of 54
elements).
The company structure is not clear (simplicity is ranked No.16 out of 18
factors).
Family interference can cause frustration and disrupt positive initiatives.
Questioning decisions and actions that are inconsistent with the company
value, is ranked No 46 out of 54 elements.
Communication is a major weakness - not everyone feels involved or
engaged (ranked No. 46 out of 54 elements).

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 We need consistency around processes, systems and procedures (systems
ranked No 12 out of 18 factors).

General Discussion about the overall results

It was agreed an analysis of responses by job function would be useful (as opposed
to by working location). Responses from those reporting into the International office
were generally more positive, thought partly due to a more positive internal and
external environment. Knowsley’s responses were felt less positive with possibly the
meaning or importance of the survey not having been made clear to those
responding. The definition of ‘innovation’ needs to be clearer. It may not necessarily
mean ‘new’ but rather the processes involved with internal improvement to make
things work more effectively.

A summary follows of the discussion that took place in smaller groups of those
attending the day. Answers to specific questions were sought:

1) Do these results reflect our company? Do they give a true and accurate representation
of the current situation?

The results were felt to be distorted between office and shop floor staff; separating
them would give a clearer indication of opinions in both camps. Clearly, disparity
between Chesterfield and London offices exists; Chesterfield seen as becoming a
less significant part of Tratos (office and staff reduced), with Chesterfield’s future
unclear in its current format. It was felt that some results reflected the company, but
differences of opinion existed between factories and the International office
responses. Product innovation was seen to mostly come from Italy while business
innovation from London.

2) Based on these results what are the key strengths and weaknesses of Tratos in terms of
its ability to be an innovative company?

(1 group commented “For this question perhaps we should divide Italy from UK – two
subcultures”)

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Strengths
The results reflected understanding that Tratos invests heavily in staff; product
knowledge is generally high as is awareness of company culture and direction
(financial success is ranked No.4 and project money is ranked No. 8 out of 54
elements). The company’s vision is clear with senior staff a driving and motivational
force in the company (‘inspire’ is ranked No.16 out of 54 elements). For some staff,
work is more than a job and Tratos is part of their life. Culture, motivation, leadership
and vision were all identified as strengths.

Weaknesses
The company structure is not clear and decisions can be taken away from board
level (or this is the impression) regardless of groundswell of opinion, or what is the
correct decision. Some family decision-making (interference) can stifle innovation.
Some (Knowsley site in particular) may not feel part of the Tratos family.

3) What are the key changes that are required?

Internal communication is important in delivering Tratos as an innovative company.

People have to be involved in what happens, to feel part of it and the opportunity to
share innovative ideas should not be ignored. Back-office staff presently do not feel
involved with attention focused on the London office and Chesterfield.

It was felt that Knowsley needs someone to lead innovation - possibly a general
manager responsible for communicating, building relationships and motivating staff.
Recognising the cultural difference at Knowsley and recruiting more locally rather
than sending an employee from Italy should be considered.

A more structured and coordinated approach to team projects would be welcomed

with more opportunity to work together with common company processes and good
practice being adopted throughout the business. Changes to inter-country
communication - getting to know the Italian culture, knowing who does what
(family/staff tree) and more awareness (not just at family and higher management
level) of company direction should be considered.

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4) Do we want to change?

It was clear that there was a desire to change in order to be innovative and that it
has to be visibly driven by Tratos Culture with the hope that it extends throughout the
company. Without change, it was felt Tratos cannot be an innovative company.

5) What are the priorities?

The priorities are to improve the weaknesses with particular emphasis upon
communication and greater empathy from both sides of the international relationship.
Leadership, specifically at factory location (Knowsley) will be important in ensuring
everyone is clear on the company's vision/ethos. As far as product innovation is
concerned product prototypes and cable samples must feature in Tratos’ strategy.

6.4.2 Culture of Innovation Board workshop Monday 14th March 2016

The key outcomes and conclusions from this workshop were:

The generally positive results should be welcomed. Tratos is associated with
a hunger for success (ranked No. 1 out of 54 elements), good client
relationships (ranked No.19 out of 54 elements), product innovation (prototype
ranked No. 27 out of 54 elements) and dedicated staff (expert is ranked No.
30 out of 54 elements).
Low morale at Knowsley/Chesterfield is a matter of concern, confirmed by the
“Work Climate Survey of Abbey & Dickson”, Abbey (1981); International office
score 3.91, Knowsley 3.13 and Italy 2.95. Knowsley Innovation Quotient is
3.24 against 3.50 for the Tratos Group. However, it should be recognised that
respondents reporting to London tend to be closer to the business because of
their role (sales or management) and this could explain the relatively positive
results for London.
However, we are effectively two cultures – no one unique corporate culture -
this needs to be addressed.
Leadership is an issue and lack of leadership (or inconsistent leadership)
contributes to a poorer working climate.
The nature of a family-owned business has an impact on management.

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 Opportunity now to bring the company together as one organisation with one
common goal.
Opportunity to introduce a professional management structure where the
family – as the Board - takes a non-executive leadership role and the
management of the company is delegated to a senior level operational team.
Opportunity to introduce a series of basic practices that will instantly improve
communications, engagement and motivation across the company.

The importance of the survey in terms of the future of Tratos was clear amongst the
group. The need to present the findings to the company’s owners, emphasising that
the survey has been conducted independently and anonymously, was agreed. The
survey is a major piece of work, providing highly valuable information. It provides the
opportunity for Tratos to act on some very clear and telling results - if it ignores it
then the opportunity to build a truly successful company will be missed.

Some general comments were noted about the survey in particular the low response
from Pieve was seen as disappointing. It was suggested that those who had not
completed the survey could be encouraged to do so in order to provide a fuller
picture going forward. The analysis by job function (which shows a flatter series of
bar charts) highlights that the differences in responses are more related to working
location than to job role.

1) Do these results give an accurate representation of Tratos and its culture?

The group agreed that the results broadly reflect the current situation. In fact, the
generally positive results were a welcome surprise.

There was concern that some respondents may not have expressed their true
feelings (for fear of giving the negative view despite assurances about
anonymity). However, the results must be taken at face value and we should take
heart from the positive outcome.

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It was agreed that there appears to be low morale at Knowsley/Chesterfield with
people working at these sites apparently feeling overlooked or
unappreciated. However, it should be recognised that respondents reporting to
London tend to be closer to the business because of their role (sales or
management) and this could explain the relatively positive results for London.

It was suggested that the relatively negative results from Pieve should be even more
concerning since people there should have a deeper understanding of the company
and are closer to evidence of innovation, new ideas and new product
development. A higher result from Pieve would be expected.

2) What are the strengths emerging from the survey results?

The strengths identified included leadership and drive in the UK with a positive
culture and sense of belonging in the company. There is ‘hunger for success’
(ranked No.1 out of 54 elements), with staff passionate and dedicated to their work.
Basic infrastructure to support innovation (technical, customisation, ideas, close to
customer, expertise) exists with product innovation highlighted and weaknesses with
the business seen to be fixed relatively easily. Client relationships are strong as well
as external communication.

3) What are the weaknesses?

Family ownership with Pieve seen as locally focused has meant Tratos is identified
as two companies effectively with no unique culture. A lack of organisational
structure and leadership with poor internal communications exacerbates the
situation. Limited process monitoring and over-reliance of certain client relationships
were also highlighted.

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4) What are the opportunities presented?

There is an opportunity to bring the company together as one organisation with one
common goal and to introduce a professional management structure. A series of
basic practices will instantly improve communications, engagement and motivation
across the company. Tratos has already implemented The Tratos Academy with a
training programme coupled with delegation, coaching, support and feedback
systems, and most of all, developing behavioural change.

5) What steps should be taken to capture the opportunities?

a. Organisational Structure
Tratos has the potential to achieve more and to win in a difficult and competitive
market. The company’s strengths will provide a strong basis for success in an
uncertain climate. However, some key weaknesses, identified by the survey, are
holding the company back and could threaten its future prospects. At the heart of
these weaknesses is the lack of a cohesive organisational structure with clear lines
of responsibility and a strong management tier.

The introduction of a new, formalised structure is the essential first step towards
addressing the company’s weaknesses and presents an opportunity to move the
Tratos to the next important stage in its evolution.

The following corporate structure will allow the company to move forward and
respond to the opportunities.

The recommended steps are (Fig.19):

Formalise and implement a new Governance Structure for the
company, allowing the owners to lead and govern and a separate
executive team to deliver.
This structure would involve a single Board of Non-Executive Directors
with overall responsibility for the Tratos Group. The Board, comprising
the company’s owners (and possibly others appointed for their special
expertise), would be responsible for overseeing, planning and
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 monitoring the overall direction of the company, including strategic
planning, finances and corporate governance.
The Board would be responsible for the appointment of a professional
Executive Team, responsible for key operational areas (across the
Group) such as Finance, Operations, Marketing, Human Resources,
IT.
The Executive Team would be supported by departments, which
deliver according to clear performance targets (departments could be
country-specific).
A corporate Academy is established to support the recruitment,
development and engagement of all employees, fostering innovative
behaviours and practices across the company.

Figure 19: Organisational Structure

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In order to move to this structure the survey findings should be presented, to and
discussed with, the current ownership, outlining the opportunities and the
consequences for the company of not responding or acting. I believe it may be
helpful for the company to appoint an independent consultant to examine the
findings and make recommendations to the family.

b. Improve Internal Structure

The introduction of the Organisational Structure suggested above is fundamental to
the success of all other actions arising from the survey results. Effective
communication depends on a clear structure, lines of reporting and information flow.

In the meantime some basic steps can be taken to improve internal communication
which will help to alleviate some of the problems around low morale, lack of
engagement and lack of understanding amongst staff (Table 4).

Table 4: Internal communication tools

Internal communication tools Responsibility
Regular Newsletter to all staff Communications department
Monitors displaying information & updates at all sites Communications department
TT magazine to go to all staff Communications department
Regular Feedback on production targets Planning department
Regular Feedback on scrap reduction targets Planning department
Production of a “Who’s Who” in the company Communications department

6.4.3 Workshop conclusion

The overall workshop analyses identified some company's strengths and weakness
to be addressed.
The strengths
The company’s strengths should be enhanced and exploited in any future strategy.
Overall the strengths emerging from the survey include:
Attitudes: Hunger for success, a sense of enterprise, responsiveness to change,
and flexibility (ranked No.1 out of 54 elements).

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Leadership: Tratos’ leaders take steps to respond to opportunities and in some
circumstances encourage and support innovative practices (ranked No.2 out of 54
elements).
Infrastructure (The means to innovate): Tratos has some of the essential
foundations in place to enable innovation, e.g. strong external relationships,
customised products, flexible processes and internal expertise (see chapter 6.2).

The weakness
The negatives should be removed or mitigated to improve the company’s chance of
future success. Overall the negatives emerging from the survey include:
Climate: The differences in the scores between sites and the relatively positive
results from respondents reporting to the international office suggest that there are
real differences in leadership and culture across the Group, which need to be
addressed. The scores suggest that staff in Pieve and Chesterfield/Knowsley are
less engaged and feel less appreciated and rewarded than their colleagues in
international feel. There appears to be less collaboration at Knowsley and Pieve and
a sense of unfairness and status polarisation at these locations (ranked No. 6 out of
6 blocks).
Recruitment: Overall the scores suggest that there is a need to improve the
recruitment, development and engagement of people at Tratos (ranked No. 53 out of
54 elements).
Decision-making: There appears to be a lack of autonomy and delegation across
the Group. The decision is apparently restricted to a few senior people and this can
result in a lack of empowerment and accountability (ranked No. 51 out of 54
elements).
Processes: The results suggest that some product development could be improved,
for instance analysis of market, assessment of risk and project planning. Besides this
process monitoring could also be improved (ranked No 5 out of 6 blocks).

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 6.5 Report recommendations

The survey’s key findings and the conclusions reached in the two workshops have
helped to inform the following recommendations.

Celebrate Success!
The survey confirms that Tratos is perceived as an innovative company with values
and basic infrastructure to support further innovation, leading to growth and future
success. The Company should welcome this positive outcome and take steps to
broadcast the results in its internal and external communications.

Build on the strengths

Tratos has some key strengths (chapter 6.4.3) which should be formally recognised
and acknowledged in all plans. Tratos has what many other companies want but fail
to get – it is therefore important to highlight these strengths, enhance them and
exploit them at every opportunity.

Seize the opportunity to create one great company

Weaknesses (chapter 6.4.3) are holding the company back from greatness. These
weaknesses are opportunities. Now that the company is aware of the areas to be
fixed, there is an opportunity to grow more, improve performance and achieve
significant success as a global organisation. The first step in this process would be to
bring the company together as one with a formal and cohesive organisational
structure and culture.

84
7. Conclusion

Tratos is a traditional family-owned company that is very successful in exporting its

products in 36 countries, (more than 80% of the production is export-dedicated). The
company has a strong executive team, mostly family members, who make all the
decisions and drive implementation.

The survey gave board members, the senior management of Tratos and I the
possibility to identify, classify and rank the major factors that influence innovation
culture and the opportunity to have a healthy discussion on the culture of innovation.
The primary acquisition, I believe, is the acknowledgement of the elements that have
driven culture innovation.

The survey, also, confirmed that the company doesn’t have the bench strength
among its lower management level to understand the new challenges in the industry.
In fact, the Innovation Quotient of International offices is 3.85 while UK site is 3.24,
and Italy is 3.39. Another explanation, for the above result, could be the people at
the top or near the top - the individuals who make the decisions and control activities
- tend to have a much rosier view of the Tratos organisation’s culture (as
International office) than do mid-to-lower-level managers and rank-and-file
employees (the UK and Italy).

I have also identified that the results are influenced by factors other than the
organisational culture. National impact and perception of the domestic situation has
a bearing (Italy score lowest on the “Work Climate Survey of Abbey & Dickson”
(Abbey, 1981), (2.95) against International (3.91) and UK (3.13), even though the
Italian site is the leading innovative factory of the Tratos Group).

The “Work Climate Survey” confirms that either the Rao and Weintraub survey has
limitations or exceptions, or the sample selected for the Tratos survey was not
sufficient.

85
The employees who took the survey gave the company high marks on external
success and enterprise success. However, employees ranked poorly on the
individual component of success. Employees also ranked very poorly ‘simplicity’ and
entrepreneurial. Employees ranked the company's leader badly on engaging the rest
of the workforce; the engaging factor ranked lowest among the 18 factors, in
particular, it scored very poorly in Italy and in the UK, yielding below the average
Innovation Quotient.

Employees did not take the initiative in the innovation process, perhaps partially
because the leaders did not coach them. A large proportion of employees felt
leaders did not provide feedback and support to them. Nor did they think the
company rewarded individual participation in potentially risky opportunities,
irrespective of the outcome.

The workshops, which addressed organisational structure solutions, revealed a path

to enforce the innovation culture at all Tratos levels of line management.

They addressed several other potential issues, for instance that "without change, it
was considered Tratos cannot be an innovative company." Tratos has survived and
flourished to date because of innovation. The work I am doing now will ensure that
the company looks to new ways to innovate. Another issue addressed at the
workshop was the "lack of leadership, considered to be a problem at Knowsley,
which could explain the relatively negative perceptions coming through in the
survey". This conclusion was based not on data but on personal views. In fact,
Tratos’ employees gave the company high marks on enabling and capturing.

On the other issue that emerged from the workshop was the lack of communication
which was confirmed by employees’ perception, I have decided to implement a video
and camera system to share immediately information at each site.

Allocating screens in meeting rooms, canteens and in the common spaces will
facilitate updates on the company’s progress. The Tratos Academy has a training

86
and behavioural change programme coupled with delegating, coaching, support and
feedback systems.

The low rank given to the resource selection systems opened new thinking for me;
probably that the employee perception is right in saying that Tratos recruiting and
hiring systems in place does not support a culture of innovation. After all, they are
the results of the system in place.

87
Appendices

Appendix 1

Tratos Group – Culture of Innovation Survey

The purpose of this survey is to help us understand whether Tratos is perceived
as an innovative company and whether it has the systems, processes and culture
to support an Innovation Strategy.

This survey involves all company employees within the Tratos Group. Your
responses and comments are extremely important to this exercise. The results
will be used to inform a series of transformative activities to improve innovation
and encourage innovative behaviour throughout the company.

There are 87 questions and we estimate that it will take you approximately 30
minutes to complete the survey. So please ensure you have enough time to
make a considered response to each question. There are NO right or wrong
answers – we are simply interested in your perception of the current situation.
You may feel that there is some repetition in the questions. This is deliberate. It
is very important that you answer all questions!

Your answers will be completely anonymous. To ensure your anonymity the

survey is conducted online. Further more Tratos has engaged an independent
consultant to design the survey, receive the results and interpret the findings.

Thank you!

For each statement, please rate Tratos on a scale of 1 to 5. Using the following
scale:
1= Not at all
2 = to a small extent
3 = to a moderate extent
4 = to a great extent
5 = to a very great extent

88
PART 2 : DO WE HAVE AN INNOVATIVE CULTURE AT TRATOS?
Values
Entrepreneurial
1. (Hunger)
We have a burning desire to explore opportunities and to create new things.
2. (Ambiguity)
We have a healthy appetite and tolerance for ambiguity when pursuing new oppo
rtunities.
3. (Action-orientated)
We avoid analysis paralysis when we identify new opportunities by exhibiting a
bias towards action.
Creativity
4. (Imagination)
We encourage new ways of thinking and solutions from diverse perspectives.
5. (Autonomy)
Our workplace provides us the freedom to pursue new opportunities.
6. (Playful)
We take delight in being spontaneous and are not afraid to laugh at ourselves.
Learning
7. (Curiosity) We are good at asking questions in the pursuit of the unknown.
8. (Experiment) We are constantly experimenting in our innovation efforts.
9. (Failure OK)
We are not afraid to fail, and we treat failure as a learning opportunity.

Behaviours
Energize
10. (Inspire)
Our leaders inspire us with a vision for the future and articulation of opportunities
for the organisation
11. (Challenge)
Our leaders frequently challenge us to think and act entrepreneurially.
12. (Model)
Our leaders model the right innovation behaviours for others to follow.
Engage
13. (Coach)
Our leaders devote time to coach and provide feedback in our innovation efforts.
14. (Initiative)
In our organisation, people at all levels proactively take initiative to innovate.
15. (Support)
Our leaders provide support to project team members during both successes and
failures.
Enable
16. (Influence)
Our leaders use appropriate influence strategies to help us navigate around
organisational obstacles.
17. (Adapt)
Our leaders are able to modify and change course of action when needed.
89
 18. (Grit) Our leaders persist in following opportunities even in the face of
adversity.

Climate
Collaboration
19. (Community) We have a community that speaks a common language about
innovation.
20. (Diversity) We appreciate, respect and leverage the differences that exist
within our community.
21. (Teamwork) We work well together in teams to capture opportunities.
Safety
22. (Trust) We are consistent in actually doing the things that we say we value.
23. (Integrity) We question decisions and actions that are inconsistent with our
values.
24. (Openness) We are able to freely voice our opinions, even about
unconventional or controversial ideas.
Simplicity
25. (No bureaucracy) We minimize rules, policies, bureaucracy and rigidity to
simplify our workplace.
26. (Accountability) People take responsibility for their own actions and avoid
blaming others.
27. (Decision-making) Our people know exactly how to get started and move
initiatives through the organisation.

Resources
People
28. (Champions) We have committed leaders who are willing to be champions of
innovation.
29. (Experts) We have access to innovation experts who can support our
projects.
30. (Talent) We have the internal talent to succeed in our innovation projects.
Systems
31. (Selection) We have the right recruiting and hiring systems in place to
support a culture of innovation.
32. (Communication) We have good collaboration tools to support our innovation
efforts.
33. (Ecosystem) We are good at leveraging our relationships with suppliers and
vendors to pursue innovation.
Project
34. (Time) We give people dedicated time to pursue new opportunities.
35. (Money) We have dedicated finances to pursue new opportunities.
36. (Space) We have dedicated physical and/or virtual space to pursue new
opportunities

90
Processes
Ideate
37. (Generate) We systematically generate ideas from a vast and diverse set of
sources.
38. (Filter) We methodically filter and refine ideas to identify the most promising
opportunities.
39. (Prioritise) We select opportunities based on a clearly articulated risk
portfolio.
Shape
40. (Prototype) We move promising opportunities quickly into prototyping.
41. (Iterate) We have effective feedback loops between our organization and the
voice of the customer.
42. (Fail smart) We quickly stop projects based on predefined failure criteria.
Capture
43. (Flexibility) Our processes are tailored to be flexible and context-based rather
than control- and bureaucracy-based.
44. (Launch) We quickly go to market with the most promising opportunities.
45. (Scale) We rapidly allocate resources to scale initiatives that show market
promise.

Success
External
46. (Customers) Our customers think of us as an innovative organization.
47. (Competitors) Our innovation performance is much better than other firms in
our industry.
48. (Financial) Our innovation efforts have led us to better financial performance
than others in our industry.
Enterprise
49. (Purpose) We treat innovation as a long-term strategy rather than a short-
term fix.
50. (Discipline) We have a deliberate, comprehensive and disciplined approach
to innovation.
51. (Capabilities) Our innovation projects have helped our organization develop
new capabilities that we did not have three years ago.
Individual
52. (Satisfaction) I am satisfied with my level of participation in our innovation
initiatives.
53. (Growth) We deliberately stretch and build our people’s competencies by
their participation in new initiatives.
54. (Reward) We reward people for participating in potentially risky opportunities,
irrespective of the outcome.

91
PART TWO: PERCEPTIONS OF INNOVATION

Autonomy
55. Staff at Tratos have freedom in day-to-day operating decisions (such as
when to work and when not to work)
56. Once jobs are defined at Tratos, employees have freedom to work without
close supervision.
Conflict v Cooperation
57. Employees at Tratos work together to get things done
58. There is little competition between employees at Tratos
Supportiveness
59. Tratos is interested in its employees and is willing to support them in job and
non-job related matters
60. Tratos recognises effort and fosters a sense of belonging amongst
employees
Level of Rewards
61. Tratos employees are rewarded for good performance
Structure
62. Tratos gives employees explicit instructions about how jobs are to be
performed
63. Tratos has clear organizational structures and written procedures
Performance Reward Dependency
64. The reward system at Tratos (salary, promotions, benefits etc.) is fair and
appropriate
65. Employee rewards at Tratos are based on a person’s worth, ability and past
performance
Motivation to Achieve
66. Tratos employees take every opportunity to excel and achieve the best they
can for the company
67. Tratos employees are not complacent, even in the face of good profits
Status Polarisation
68. There is no definite hierarchy within Tratos. We are all treated equally
whatever our status.
69. There are no special privileges for senior staff or management at Tratos
Flexibility
70. Tratos employees are willing to experiment and try new ways of working
71. Tratos employees are willing to improve systems or processes.
Decision/Centralisation
72. Tratos delegates the responsibility for decision-making as widely as possible
73. Tratos does not confine decision-making and authority to upper management

92
PART THREE: INNOVATION POTENTIAL

Offerings
74. Tratos develops innovative products and services
Platform
75. Tratos make different cables using the same equipment
Solutions
76. Tratos sells customized products and services
Customers
77. Customers are always the same
Customer experience:
78. Tratos has a friendly interface with customers
Value capture
79. Tratos sells only cables
Processes
80. Tratos continually monitors the efficiency of its processes
Organisation
81. Everybody in the company knows what they must do to perform their job
Supply chain
82. Supplier selection is based on a web-based platform
Presence
83. Tratos continuously opens new offices around the world
Networking
84. Tratos has a system for customers to get offers
Brand
85. The Tratos brand means “innovation”

PART FOUR: ABOUT YOU

86. Where is your working location (which Tratos site or office do you work at or
report to?) (Choose one only)

UK (Knowsley & Chesterfield)

UK (London)
Italy (Pieve)

87. Which of the following best describes your role? (Choose one only)

Management
Sales
Technical
Operative
Administrative

Thank you for taking the time to complete this survey.

93
Appendix 2

Letter to accompany Tratos Culture of Innovation Survey

Dear all,

Maurizio has already told you that we are carrying out a major survey of all Tratos
staff to assess the innovative culture at Tratos. The results will help to inform the
company's plans to improve innovation across the company. The survey is now
ready and we need to test it on a small group - you have been chosen to take part in
that test. I would therefore be grateful if you would complete the survey by clicking
on the button below. It will take you approximately 30 minutes so please allow
enough time!

If there are no problems arising from this test you will not be required to complete the
survey again - your responses will be recorded as final. However, if we find that
improvements or changes are necessary as a result of this test I am afraid we will
have to ask you to repeat the exercise.

When you have completed the survey please let me know if you had any problems
completing the survey or if anything was unclear. All comments should be sent to me
at jeanette@jeanettepurcell.com.

Please complete the test survey by Wednesday 20 January at the latest. If you could
let me know when you have submitted your responses that would be helpful.

Thank you for your participation!

Jeanette Purcell

94
Appendix 3: Analysis Tratos Group culture of innovation Survey

PART ONE: CULTURE OF INNOVATON (Rao & Weintraub) London K&C Pieve AV ALL SITES
Values

1. (Hunger) We have a burning desire to explore opportunities and to create new things. 4,36 3,51 4,16 4,01
2. (Ambiguity) We have a healthy appetite and tolerance for ambiguity when pursuing new opportunities. 3,57 3,37 3,55 3,50
3. (Action-orientated) We avoid analysis paralysis when we identify new opportunities by exhibiting a bias towards action. 3,71 3,20 4,00 3,64
Entrepreneurial 3,88 3,36 3,90 3,71
4. (Imagination) We encourage new ways of thinking and solutions from diverse perspectives. 3,86 3,29 3,18 3,44
5. (Autonomy) Our workplace provides us the freedom to pursue new opportunities. 4,29 3,23 3,22 3,58
6. (Playful) We take delight in being spontaneous and are not afraid to laugh at ourselves. 4,36 3,06 3,37 3,60
Creativity 4,17 3,19 3,26 3,54
7. (Curiosity) We are good at asking questions in the pursuit of the unknown. 3,93 3,31 3,53 3,59
8. (Experiment) We are constantly experimenting in our innovation efforts. 3,93 3,63 3,82 3,79
9. (Failure OK) We are not afraid to fail, and we treat failure as a learning opportunity. 4,29 3,14 3,49 3,64
Learning 4,05 3,36 3,61 3,67
AVERAGE SCORE (VALUES) 4,03 3,30 3,59 3,64
Behaviours

10. (Inspire) Our leaders inspire us with a vision for the future and articulation of opportunities for the organisation. 4,43 3,14 3,35 3,64
11. (Challenge) Our leaders frequently challenge us to think and act entrepreneurially. 4,21 3,09 3,27 3,52
12. (Model) Our leaders exemplify the right innovation behaviors for others to follow. 4,00 3,29 3,33 3,54
Energize 4,21 3,17 3,32 3,57
13. (Coach) Our leaders devote time to coach and provide feedback in our innovation efforts. 3,57 2,83 2,86 3,09
14. (Initiative) In our organisation, people at all levels proactively use their initiative to innovate. 3,64 2,94 2,86 3,15
15. (Support) Our leaders provide support to employees during both successes and failures. 4,14 2,74 2,86 3,25
Engage 3,78 2,84 2,86 3,16
16. (Influence) Our leaders use appropriate influence strategies to help us navigate around organisational obstacles. 4,07 3,14 3,27 3,49
17. (Adapt) Our leaders are able to modify and change course of action when needed. 4,21 3,74 3,80 3,92
18. (Grit) Our leaders persist in following opportunities even in the face of adversity. 4,21 3,46 3,88 3,85
Enable 4,16 3,45 3,65 3,75
AVERAGE SCORE (BEHAVIOURS) 4,05 3,15 3,28 3,49

95
Climate London K&C Pieve AV ALL SITES

19. (Community) We have a community that speaks a common language about innovation. 3,79 3,00 3,20 3,33
20. (Diversity) We appreciate, respect and leverage the differences that exist within our community. 3,57 3,17 3,04 3,26
21. (Teamwork) We work well together in teams to capture opportunities. 3,86 3,09 3,12 3,36
Collaboration 3,74 3,09 3,12 3,32
22. (Trust) We are consistent in actually doing the things that we say we value. 4,00 3,31 3,39 3,57
23. (Integrity) We question decisions and actions that are inconsistent with our values. 3,57 3,06 3,12 3,25
24. (Openness) We are able to freely voice our opinions, even about unconventional or controversial ideas. 3,86 3,17 3,18 3,40
Safety 3,81 3,18 3,23 3,41
25. (No bureaucracy) We minimize rules, policies, bureaucracy and rigidity to simplify our workplace. 4,07 2,63 3,55 3,42
26. (Accountability) People take responsibility for their own actions and avoid blaming others. 3,93 2,74 2,49 3,05
27. (Decision-making) Our people know exactly how to get started and move initiatives through the organisation. 3,43 3,03 2,80 3,09
Simplicity 3,81 2,80 2,95 3,19
AVERAGE SCORE (CLIMATE) 3,79 3,02 3,10 3,30
Resources

28. (Champions) We have committed leaders who are willing to be champions of innovation. 4,29 3,40 3,63 3,77
29. (Experts) We have access to innovation experts who can support our projects. 3,64 3,54 3,27 3,48
30. (Talent) We have the internal talent to succeed in our innovation projects. 3,86 3,37 3,65 3,63
People 3,93 3,44 3,52 3,63
31. (Selection) We have the right recruiting and hiring systems in place to support a culture of innovation. 3,36 2,86 2,84 3,02
32. (Communication) We have good collaboration tools to support our innovation efforts. 3,50 3,17 3,23 3,30
33. (Ecosystem) We are good at leveraging our relationships with suppliers and vendors to pursue innovation. 3,71 3,57 3,73 3,67
Systems 3,52 3,20 3,27 3,33
34. (Time) We give people dedicated time to pursue new opportunities. 4,00 2,91 3,06 3,32
35. (Money) We have dedicated finances to pursue new opportunities. 4,29 3,40 3,69 3,79
36. (Space) We have dedicated physical and/or virtual space to pursue new opportunities 4,00 3,23 3,18 3,47
Project 4,10 3,18 3,31 3,53
AVERAGE SCORE RESOURCES) 3,85 3,27 3,36 3,50

96
Processes London K&C Pieve AV ALL SITES

37. (Generate) We systematically generate ideas from a vast and diverse set of sources. 3,64 3,03 3,22 3,30
38. (Filter) We methodically filter and refine ideas to identify the most promising opportunities. 3,36 3,17 3,24 3,26
39. (Prioritise) We select opportunities based on a clearly articulated risk portfolio. 3,50 3,14 3,39 3,34
Ideate 3,50 3,11 3,28 3,30
40. (Prototype) We move promising opportunities quickly into prototyping. 3,86 3,06 3,61 3,51
41. (Iterate) We have effective feedback loops between our organization and the voice of the customer. 3,57 3,37 3,45 3,46
42. (Fall smart) We quickly stop projects based on predefined failure criteria. 3,50 3,31 3,29 3,37
Shape 3,64 3,25 3,45 3,45
43. (Flexibility) Our processes are tailored to be flexible and context-based rather than control- and bureaucracy-
based. 4,07 3,29 3,67 3,68
44. (Launch) We quickly go to market with the most promising opportunities. 3,71 3,57 4,02 3,77
45. (Scale) We rapidly allocate resources to scale initiatives that show market promise. 3,79 3,77 3,82 3,79
Capture 3,86 3,54 3,84 3,75
AVERAGE SCORE (PROCESSES) 3,67 3,30 3,52 3,50
Success

46. (Customers) Our customers think of us as an innovative organization. 3,29 3,60 3,94 3,61
47. (Competitors) Our innovation performance is much better than other firms in our industry. 3,71 3,60 3,73 3,68
48. (Financial) Our innovation efforts have led us to better financial performance than others in our industry. 4,14 3,69 3,80 3,88
3,71 3,63 3,82 3,72
External
49. (Purpose) We treat innovation as a long-term strategy rather than a short-term fix. 3,71 3,57 3,80 3,69
50. (Discipline) We have a deliberate, comprehensive and disciplined approach to innovation. 3,36 3,34 3,37 3,36
51. (Capabilities) Our innovation projects have helped our organization develop new capabilities that we did not
have three years ago. 4,14 3,69 3,94 3,92
3,74 3,53 3,70 3,66
Enterprise
52. (Satisfaction) I am satisfied with my level of participation in our innovation initiatives. 3,93 3,43 3,31 3,56
53. (Growth) We deliberately stretch and build our people’s competencies by their participation in new initiatives. 3,79 3,00 2,96 3,25
54. (Reward) We reward people for participating in potentially risky opportunities, irrespective of the outcome. 3,50 2,46 2,73 2,90
Individual 3,74 2,96 3,00 3,23
AVERAGE SCORE (SUCCESS) 3,73 3,38 3,51 3,54
OVERALL AVERAGE SCORE (SIX BLOCK) 3,85 3,24 3,39 3,50
97
PART TWO : WORK CLIMATE (Abbey & Dickson) London K&C Pieve AV ALL SITES

Autonomy
55. Staff at Tratos have freedom in day-to-day operational decisions (such as when to work and when not to work) 3,79 2,29 2,75 2,94
56. Once jobs are defined at Tratos, employees have freedom to work without close supervision. 4,29 3,23 3,27 3,60
Conflict v Cooperation
57. Employees at Tratos work together to get things done 4,00 3,11 3,04 3,38
58. Employees at Tratos choose to collaborate rather than compete with each other 4,21 2,74 2,77 3,24
Supportiveness
59. Tratos is willing to support employees in work and non-work related matters 4,14 3,26 3,58 3,66
60. Tratos recognizes effort and fosters a sense of belonging amongst employees 4,43 3,11 3,00 3,51
Level of Rewards
61. Tratos employees are rewarded for good performance 4,14 2,23 2,81 3,06
Structure
62. Tratos gives employees explicit instructions about how jobs are to be performed 3,57 5,54 3,17 4,09
63. Tratos has clear organizational structures and written procedures 3,43 3,63 3,10 3,39
Performance Reward Dependency
64. The reward system at Tratos (salary, promotions, benefits etc.) is fair and appropriate 4,07 2,40 2,85 3,11
65. Employee rewards at Tratos are based on a person’s worth, ability and past performance 4,14 2,57 2,60 3,10
Motivation to Achieve
66. Tratos employees take every opportunity to excel and achieve the best they can for the company 4,21 3,60 2,96 3,59
67. Tratos employees are not complacent, even in the face of good profits 3,86 3,37 2,83 3,35
Status Polarisation
68. There is no definite hierarchy within Tratos. We are all treated equally whatever our status. 4,14 2,71 2,60 3,15
69. There are no special privileges for senior staff or management at Tratos 3,71 2,80 2,81 3,11
Flexibility
70. Tratos employees are willing to experiment and try new ways of working 3,79 3,43 3,33 3,52
71. Tratos employees are willing to improve systems or processes. 3,64 3,36 3,21 3,40
Decision/Centralisation
72. Tratos delegates the responsibility for decision-making as widely as possible 3,36 3,00 2,51 2,96
73. There are many decision-makers at all levels at Tratos 3,29 3,14 2,79 3,07
WORK CLIMATE (Abbey & Dickson) 3,91 3,13 2,95 3,33

98
PART THREE : THE MEANS OF INNOVATION (Sawhney) London K&C Pieve AV ALL SITES
Offerings:
74. Tratos develops innovative products and services 4,21 3,40 3,90 3,84
Platform
75. Tratos make different cables using the same equipment 4,07 3,89 4,17 4,04
Solutions
76. Tratos sells customized products and services 4,43 3,80 4,23 4,15
Customers
77. Customers are always the same 2,43 2,57 3,02 2,67
Customer experience:
78. Tratos has a friendly interface with customers 3,79 3,83 3,23 3,62
Value capture
79. Tratos sells only cables 3,07 3,57 4,04 3,56
Processes
80. Tratos continually monitors the efficiency of its processes 3,14 3,60 3,46 3,40
Organisation
81. Everybody in the company knows what they must do to perform their job 3,50 3,74 3,25 3,50
Supply chain
82. Supplier selection is based on a web-based platform 2,64 2,83 2,48 2,65
Presence
83. Tratos continuously opens new offices around the world 3,50 3,26 2,83 3,20
Networking
84. Tratos has a system for customers to get offers 3,36 3,09 3,42 3,29
Brand
85. The Tratos brand means “innovation” 3,64 3,46 3,81 3,64
THE MEANS OF INNOVATION (Sawhney) 3,48 3,42 3,49 3,46

99
Appendix 4 – Innovation Survey: factors

London K&C Pieve AV ALL SITES

Capture
3,86 3,54 3,84 3,75 1,00
Enable 4,16 3,45 3,65 3,75 2,00
External 3,71 3,63 3,82 3,72 3,00
Learning 4,05 3,36 3,61 3,67 4,00
Enterprise 3,74 3,53 3,70 3,66 5,00
People 3,93 3,44 3,52 3,63 6,00
Creativity 4,17 3,19 3,26 3,54 7,00
Energize 4,21 3,17 3,31 3,54 8,00
Project 4,10 3,18 3,31 3,53 9,00
Shape 3,64 3,25 3,45 3,45 10,00
Safety 3,81 3,18 3,23 3,41 11,00
Systems 3,52 3,20 3,27 3,33 12,00
Collaboration 3,74 3,09 3,12 3,32 13,00
Ideate 3,50 3,11 3,28 3,30 14,00
Individual 3,74 2,96 3,00 3,23 15,00
Simplicity 3,81 2,80 2,95 3,19 16,00
Entrepreneurial 3,88 3,36 3,9 3,17 17,00
Engage 3,78 2,84 2,86 3,16 18,00

CULTURE OF INNOVATON (Rao & Weintraub)

100
 Appendix 5 - Innovation Survey: Elements
London K&C Pieve AV ALL SITES
1. (Values Entrepreneurial Hunger) We have a burning desire to explore opportunities and to create new things. 4,36 3,51 4,16 4,01
51. (Success Enterprise Capabilities) Our innovation projects have helped our organization develop new capabilities that we did not have
three years ago. 4,14 3,69 3,94 3,92
17. (Behaviours Enable Adapt) Our leaders are able to modify and change course of action when needed. 4,21 3,74 3,80 3,92
48. (Success External Financial) Our innovation efforts have led us to better financial performance than others in our industry. 4,14 3,69 3,80 3,88
18. (Behaviours Enable Grit) Our leaders persist in following opportunities even in the face of adversity. 4,21 3,46 3,88 3,85
8. (Values Learning Experiment) We are constantly experimenting in our innovation efforts. 3,93 3,63 3,82 3,79
45. (Process Capture Scale) We rapidly allocate resources to scale initiatives that show market promise. 3,79 3,77 3,82 3,79
35. (Resources Project Money) We have dedicated finances to pursue new opportunities. 4,29 3,40 3,69 3,79
28. (Resources People Champions) We have committed leaders who are willing to be champions of innovation. 4,29 3,40 3,63 3,77
44. (Process Capture Launch) We quickly go to market with the most promising opportunities. 3,71 3,57 4,02 3,77
49. (Success Enterprise Purpose) We treat innovation as a long-term strategy rather than a short-term fix. 3,71 3,57 3,80 3,69
47. (Success External Competitors) Our innovation performance is much better than other firms in our industry. 3,71 3,60 3,73 3,68
43. (Process Capture Flexibility) Our processes are tailored to be flexible and context-based rather than control- and bureaucracy-
based. 4,07 3,29 3,67 3,68
33. (Resources Systems Ecosystem) We are good at leveraging our relationships with suppliers and vendors to pursue innovation. 3,71 3,57 3,73 3,67
9. (Values Learning Failure OK) We are not afraid to fail, and we treat failure as a learning opportunity. 4,29 3,14 3,49 3,64
10. (Behaviours Energize Inspire) Our leaders inspire us with a vision for the future and articulation of opportunities for the organisation. 4,43 3,14 3,35 3,64
3. (Values Entrepreneurial Action-orientated) We avoid analysis paralysis when we identify new opportunities by exhibiting a
bias towards action. 3,71 3,20 4,00 3,64
30. (Resources People Talent) We have the internal talent to succeed in our innovation projects. 3,86 3,37 3,65 3,63
46. (Success External Customers) Our customers think of us as an innovative organization. 3,29 3,60 3,94 3,61
6. (Values Creativity Playful) We take delight in being spontaneous and are not afraid to laugh at ourselves. 4,36 3,06 3,37 3,60
7. (Values Learning Curiosity) We are good at asking questions in the pursuit of the unknown. 3,93 3,31 3,53 3,59
5. (Values Creativity Autonomy) Our workplace provides us the freedom to pursue new opportunities. 4,29 3,23 3,22 3,58
22. (Climate Safety Trust) We are consistent in actually doing the things that we say we value. 4,00 3,31 3,39 3,57
52. (Success Individual Satisfaction) I am satisfied with my level of participation in our innovation initiatives. 3,93 3,43 3,31 3,56
12. (Behaviours Energize Model) Our leaders exemplify the right innovation behaviors for others to follow. 4,00 3,29 3,33 3,54
11. (Behaviours Energize Challenge) Our leaders frequently challenge us to think and act entrepreneurially. 4,21 3,09 3,27 3,52

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40. (Process Shape Prototype) We move promising opportunities quickly into prototyping. 3,86 3,06 3,61 3,51
2. (Values Entrepreneurial Ambiguity) We have a healthy appetite and tolerance for ambiguity when pursuing new opportunities. 3,57 3,37 3,55 3,50
16. (Behaviours Enable Influence) Our leaders use appropriate influence strategies to help us navigate around organisational obstacles. 4,07 3,14 3,27 3,49
29. (Resources People Experts) We have access to innovation experts who can support our projects. 3,64 3,54 3,27 3,48
36. (Resources Project Space) We have dedicated physical and/or virtual space to pursue new opportunities 4,00 3,23 3,18 3,47
41. (Process Shape Iterate) We have effective feedback loops between our organization and the voice of the customer. 3,57 3,37 3,45 3,46
4. (Values Creativity Imagination) We encourage new ways of thinking and solutions from diverse perspectives. 3,86 3,29 3,18 3,44
25. (Climate Simplicity No bureaucracy) We minimize rules, policies, bureaucracy and rigidity to simplify our workplace. 4,07 2,63 3,55 3,42
24. (Climate Safety Openness) We are able to freely voice our opinions, even about unconventional or controversial ideas. 3,86 3,17 3,18 3,40
42. (Process Shape Fall smart) We quickly stop projects based on predefined failure criteria. 3,50 3,31 3,29 3,37
21. (Climate Collaboration Teamwork) We work well together in teams to capture opportunities. 3,86 3,09 3,12 3,36
50. (Success Enterprise Discipline) We have a deliberate, comprehensive and disciplined approach to innovation. 3,36 3,34 3,37 3,36
39. (Process Ideate Prioritise) We select opportunities based on a clearly articulated risk portfolio. 3,50 3,14 3,39 3,34
19. (Climate Collaboration Community) We have a community that speaks a common language about innovation. 3,79 3,00 3,20 3,33
34. (Resources Project Time) We give people dedicated time to pursue new opportunities. 4,00 2,91 3,06 3,32
32. (Resources Systems Communication) We have good collaboration tools to support our innovation efforts. 3,50 3,17 3,23 3,30
37. (Process Ideate Generate) We systematically generate ideas from a vast and diverse set of sources. 3,64 3,03 3,22 3,30
20. (Climate Collaboration Diversity) We appreciate, respect and leverage the differences that exist within our community. 3,57 3,17 3,04 3,26
38. (Process Ideate Filter) We methodically filter and refine ideas to identify the most promising opportunities. 3,36 3,17 3,24 3,26
23. (Climate Safety Integrity) We question decisions and actions that are inconsistent with our values. 3,57 3,06 3,12 3,25
53. (Success Individual Growth) We deliberately stretch and build our people’s competencies by their participation in new initiatives. 3,79 3,00 2,96 3,25
15. (Behaviours Engage Support) Our leaders provide support to employees during both successes and failures. 4,14 2,74 2,86 3,25
14. (Behaviours Engage Initiative) In our organisation, people at all levels proactively use their initiative to innovate. 3,64 2,94 2,86 3,15
13. (Behaviours Engage Coach) Our leaders devote time to coach and provide feedback in our innovation efforts. 3,57 2,83 2,86 3,09
27. (Climate Simplicity Decision-making) Our people know exactly how to get started and move initiatives through the organisation. 3,43 3,03 2,80 3,09
26. (Climate Simplicity Accountability) People take responsibility for their own actions and avoid blaming others. 3,93 2,74 2,49 3,05
31. (Resources Systems Selection) We have the right recruiting and hiring systems in place to support a culture of innovation. 3,36 2,86 2,84 3,02
54. (Success Individual Reward) We reward people for participating in potentially risky opportunities, irrespective of the outcome. 3,50 2,46 2,73 2,90

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