In: Operations Management
Case Study Instructions: Read this case study and answer the
questions that follow: Virgin was founded in 1970 by Richard
Branson and is classified as a holding company for multiple
ventures under the Virgin Group. When it comes to innovation Virgin
is one of the top companies in the world. What began as a mail
order record company has evolved into one of the most diverse
companies in existence. Virgin invests in and builds companies that
revolve around delivering fantastic customer experience and change
the scope of industries. They do everything from space tourism to
air travel, make comic books and video games. The company now holds
over 200 companies and operates in 29 countries. They’ve found that
the most successful ideas they get are the ones that are marketing,
sales, and customer focused, sit under the Virgin brand, have a
well-defined and differentiated customer offer and oftentimes are
delivered in partnership with experts in their field.
Virgin takes the ideas it gets and boils them down into several
categories. Anything that doesn’t quite fit into an existing
company gets sent to corporate development for review. They take
the time to read and respond to every proposal. They do not
disclose how rewards are awarded but there are substantial ones for
good ideas that are implemented. Internally Virgin also sources
business plans and ideas from employees. Once a flight attendant
had an idea. It got presented to the CEO and before long she had a
considerable role in starting up Virgin Brides (which beyond being
a fantastic idea didn’t quite work out in the market place). It’s
incredible that a flight attendant can have an idea that makes it
that far in a company. Notice that Virgin has over 200 companies
under it. If you stop for a second you’ll realize just how massive
that number is. That is a lot of innovation for a company only 40
years old. Financially they do quite well so obviously something
has been working out for them. Not a lot of firms innovate this
much or support this much innovation but that’s kind of the key –
they don’t just source great ideas, they act on them. Sourcing this
many fantastic ideas isn’t easy – it’s a lot of hard work for the
company and they have to devote time and resources to going through
all of them never mind actually taking the time to respond. But it
shows that they care and that they’re serious about this. All great
innovations come from an idea. Some go so far as to say it’s the
most important part of the process (Seth Godin would likely
disagree and say that shipping is the most important). Some
companies looking at Virgin’s requirements might find them
surprisingly strict, others surprisingly loose. No matter how you
view it the only thing that remains true at the end of the day is
that Virgin’s strategy works – and it works well.
Required:
Business excellence is about strategy. From the case study which
strategies has Virgin used to achieve continuous creativity and
innovation.
Answer: It is obvious that business excellence can be achieved through the impeccable implementation of the right strategy. A strategy is about connecting the resources available with the organization to the external business environment and opportunity and brings out business as an outcome of the strategy. An idea can also be a valuable resource available with the organization and the organization must be passionate enough to evaluate and implement the idea.
The strategy of Virgin was to drive continuous creativity and innovation from within the organization. The organizational culture was so supportive that anyone can come up with the idea and if the idea gets selected that employee can work on that idea as a project along with the regular job. They had a complete set up to nurture those ideas either in the current business or being sent to the corporate development team to find the feasibility of the idea and possibility to take up as a stand-alone business project. Ideas that had the potential to offer the differentiated customer experience were given the priority as such ideas had a higher propensity to succeed.
The strategy of the virgin to recognize the ideas from every part of the organization and bringing in a culture where employees were confident enough to share the idea with the organization was key to success. The culture plays a very important role in making any organization creative and innovative in what they do at business.