Forum Speakers’ Thoughts

COMPANY CASE

Trimo: building collaboration for innovation

Trimo has been developing original and complete solutions for steel buildings, roofs, façades, steel constructions, containers and sound and insulation systems for almost fifty years. Starting in Solvenia in 1961, the company greatly expanded its products and services which are now marketed in more than fifty countries and (together with its agents and representatives) is directly present in more than twenty-seven countries. Production facilities are in Solvenia, Russia, Serbia and the United Arab Emirates. International customers include BMW, Mercedes Benz, VW, Renault, EADS, Coca-Cola, Royal Mail and IKEA.

Aiming to be “the leading European supplier of complete solutions for steel buildings”, Trimo targets long term, continuous growth through increasing market coverage and extending its product and service offering. Innovation is fundamental to this strategy. In order to create innovative capacity the company has worked hard to build an environment supportive of the development of its employees and a culture based on cooperation: internally and with suppliers and customers. Trimo was the 2007 EFQM Prize Winner in the category ‘Leadership and Constancy of Purpose’.

New technologies in the design and manufacturing of steel buildings offer Trimo a tremendous opportunity to differentiate itself and forge close relationships with customers. Nevertheless, the building sector can be fundamentally conservative. Miloš Ebner, Chief Innovation Officer at Trimo comments: “When you are making an important investment in a building structure that is expected to last thirty years or more it is not surprising that there is often a reluctance to be an early adopter of new technologies. However, customers are also seeking the ‘optimal solution’ for their buildings that can deliver operational benefits, while being cost effective: finding such a solution requires innovation.”

“Several pressures to innovate within our sector are happening at the same time: increasing requirements toward energy efficiency, continuous pressure on costs and the differentiating potential of adopting new technologies. Making the right design decisions about building design can be a real factor of competitive advantage for our customers.”

Successful innovation requires the customer and other partners to be involved early in the project. The first step is to explore the customer’s needs: their strategy and values, and the relevance of new technology in the design of their buildings.

“Trimo works on the design of the ‘envelope’ of the building: the external structure including the roof and walls. These are very visible elements and provide a clear communication to the outside world of the distinctiveness of the owner’s ideas and vision. New technologies associated with the ‘active envelope’ – one in which the look of the building can change or offer interactivity with passers-by – offer exciting new possibilities for the operation of buildings.”

“One example is the need to reduce ‘light pollution’ from excessive use of building lighting. Through careful design and the application of new sensing and lighting technologies we are able to light a building dynamically, only where and when it is needed – ensuring that security is maintained, but that the level of ‘light pollution’ and its associated costs are minimised.”

“This is just one of over twenty ‘functionalities’ we are developing. Implementation of these possibilities is not just a technological challenge: we have to understand both the business and sociological context of how they would be accepted.”

Within the innovative ecosystem in which Trimo works, the company coordinates its research efforts with a number of partners: from suppliers in particular technologies to research institutions. In fact, 90% of all research projects are conducted in association with outsiders. This research can be fundamental: looking to develop a particular technology or ‘functionality’ before it is demanded by the market, but most often the innovation begins in response to a particular customer’s needs.

“It requires us to build significant trust among our many partners. This is not something that can be done quickly – it is built over several years and multiple projects together. There’s no short cut to experience in working with one another.”

“What helps is to demonstrate our trust in partners through transparency and in the process of listening and responding to their suggestions. We share our ideas and are very open about what we are working on, and seek collaboration in finding solutions.“

“It is important to us to seek solutions from new places by participating in external activities that may have no immediate application to our current research. By sponsoring institutional R&D efforts, competitions and symposia, we have created a network of professional connections that build our image and ultimately bring us new learning and capabilities. Showing such a leadership contribution to the sector is a good way of reinforcing trust.”

Trimo has been a major beneficiary of new technologies in 3D design and rapid prototyping, which have contributed to a more productive and flexible design and testing cycle. Internal teams share development projects and are connected to external partners through collaborative working tools. Miloš Ebner is guarded in his assessment of how much online technologies can contribute to effective team working: “Ten years ago I would have predicted a radical move online for design and development processes. In reality, we see that new technologies do not replace the need to have regular face to face meetings. We see the importance as much as ever of bringing a team together - outsiders and insiders - and finding ways to build the social relationships that are so important to developing confidence. This cannot happen online only.”

“Our commitment to EFQM and its principles has been a structuring element, in particular in ensuring that our interactions with the customer are considered in every process. We are much more aware of how what we do impacts the satisfaction of customers and our goal to be their first choice.”

“Working within the EFQM network has also allowed us to exchange experience with other innovative companies. We took part in a working group on ‘Multi-Project Management’ to share new approaches toward complex, time critical projects. We would very much like to extend these exchanges and look forward to working with more EFQM members in the future.”

COMPANY CASE

The heat of innovation: Strix plans for global growth

Strix develops key technologies for small domestic appliances, such as safety control systems, thermostats and filtration systems (for filter kettles, fridge jugs and chilled water units). Employing around 750 people worldwide, the company markets its products through some of the world’s best known home appliance brands, such as Bosch, Siemens, Philips, Black and Decker and Rowenta in over one hundred countries. The Head Office is in the Isle of Man with sales offices across the United Kingdom, Belgium, Russia, China and Hong Kong. The company’s core product of thermostatic controls for small appliances dominates its market, with over 50% share: global market penetration is such that “one in five people across the world use a Strix safety control on a regular basis, resulting in over one billion uses of its products per day”.

For the past thirty years, Strix has benefited from strong margins and good sales growth, based on its technological leadership and close customer relationships. The company has taken great care of its intellectual property rights: extending and defending patents on its inventions and careful management of licensing agreements around the world. In a recent legal case early in 2010, Strix made history by winning a patent infringement case against two local Chinese companies in a Beijing intermediate court. This decision was applauded by commentators outside China, many of whom share the opinion of the CEO of Strix, Paul Hussey, that the case could mark the beginning of a new era in business relationships with China.

“We protect our intellectual property vigorously and, as a matter of principle, will fight for it around the world. That’s not just about defending our own business: it is also a powerful signal to our customers that we protect the technology they depend on, and have licensed from us, to ensure that their brands remain distinct.”

Innovation is now the centre piece of Strix’ strategy for renewed growth.

“When you have more than 50% share of any market, it is going to be increasingly expensive to gain additional percentage points of share.”

“Back in 2008 my management team and I decided to focus the company’s energy toward growth in new product markets. There was a large and under-utilised potential for innovation within the company: we had many great ideas, engineering competence and access to the development teams at our major customers. Rather than restrict our energy to serving the thermo-electrical control business within one segment – principally electric kettles – we could apply our know-how to other segments which could benefit from similar technologies. Worldwide sales of electric kettles (a growing business itself, particularly in markets like the USA and China) represents about 75 million units a year. By considering how we can serve markets such as steam irons, pressure cookers, hot water dispensers and coffee makers, we increase our potential market to around 550 million units a year”.

The company defined three levels of innovation, each representing a greater level of investment in research and development and associated with higher risk:

1. “Heartland” – technologies and markets close to what the company does today, but where a breakthrough in performance can be achieved either in terms of cost, speed or size.
2. “Adjacencies” – new markets where Strix technology can provide a significant improvement in performance – for instance in steam cookers, or irons.
3. “Disruptive” – where innovations from Strix can lead to radical new ways in which a product is used, opening up new market potential for Strix’ OEM customers.

Instigated only two years ago, the Strix ‘Ideas to Innovation’ (or ‘i2i’) programme is generating an increasing number of new products. Designed to scout both internally and externally for sources of profitable innovation, the i2i programme consists of a series of rigorous stage gates through which ideas must pass before they are approved for investment and further development. In 2008, only ten ideas were passed through the programme. In 2009, 129 ideas entered the i2i pipeline, but only nine of these received funding. At the current rate, 2010 will surpass 2009.

“We partner with our customers on determining attractive new ideas, and to some extent with our suppliers. We also finance some research projects at universities and competitions at business schools. But the majority of these ideas come from our own people.

Of our total non-manufacturing staff of 250 about 75 of these are engaged in development activities, such as R&D and marketing. It’s a big commitment for a company of our size.”

“In our 4 step development process, we do most of the R&D ourselves, before passing to a market test with mock-ups of the proposed new product. In the third stage we test feasibility of manufacturing and commercialisation. Finally we evaluate the most appropriate partners with whom to take it to market. 93% of ideas, based on our 2009 experience, don’t make it all the way through to market.”

Entering the recession in 2008 in a strong and stable position, Strix is now firmly on the path to growth, driven by the potential of the new markets it is addressing:

“I would say that for many businesses one of the biggest risks is complacency. Even in a business like ours, with a distinct core technology, changes in customer needs can happen quite dramatically and potentially threaten the survival of the company. Strix is somewhat exceptional in adopting change before we are forced to do so.

One of our core strengths has always been in capturing value through our development, patenting and licensing processes. Added to this, we are now improving our innovative capacity: stepping up our value creation.”

Editors Note: Paul Hussey is one of the speakers at the EFQM Forum in Bilbao (4th – 6th October). Why not join us in Bilbao and take the opportunity to listen to Paul share his views on innovation within a Panel debate with two other speakers from completely different sectors?