Recaro has implemented a new innovation process that integrates both exploration and exploitation. The process divides the R&D department into three units focused on innovation, platforms, and validation/verification. It also utilizes an innovation shelf to store unused technologies and an idea generation process involving workshops and trade shows. However, effective communication between the units will be important for success as a lack of communication could hinder integration. While the new structure provides benefits like reduced costs and faster development, some technologies may never be used and costs could increase. Recaro should focus on ensuring strong communication between units to fully realize the benefits of the new innovation process.

1. Recaro Aircraft Seating:
Innovating the Innovation System in a Mittelstand Company
Group 3
Sarah Bennani Vladimir Pushmin Anton Telepnev Maria Zatkova
140008670130014419140010985 140022155

2. Recaro’s new process integrates both exploration and exploitation,
although mainly beneficial, it still has some drawbacks for the firm
Open innovation approach
Exploration Exploitation
Direct interaction with current
customers for ideas of
improvement
Use of range of workshops and
trade shows to foster
improvement
Collection of previous
researches in the Innovation
shelf
Innovation shelf stores ready to
implement innovations that can
be used when needed
Lower cost of seat
development
Faster product
development
Fast idea
identification
Ability to address
temporal
complexity
Increased revenue
from sell of unused
technology
Decreased time
pressure on
development team
Some of the technologies stored
in Innovation shelf will never be
used
Increased R&D costs
BenefitsBenefits
Drawbacks

3. Recaro’s suggested restructuring plan is described as structural
ambidexterity, but there could be other ways to do so
Contextual ambidexterity Cyclical ambidexterity Reciprocal ambidexterity
Suggested new process
Organizational structure Innovation principles and philosophy New innovation process
• R&D department is divided into 3 units
• Innovation focuses on exploration of new
ideas
• Platforms focuses on exploitation of
previously created components
• Validation & Verification combines both
activities in testing, risk analysis, etc.
• Innovation management acts as a controller
of internal and external activities
• Innovation focuses on customer needs
• Recaro actively promote its core values in external sources
• Leadership strategy that connects top management,
employees and all departments, which translates into
teamwork, transparency and value creation
• Innovation supermarket helps to use existing knowledge in
new projects and acts as a motivator for employees
• Idea generation and evaluation – ideas go through
filters and applied into technology matrix, which
helps to get a flow of new applicable ideas
• Innovation development - additional filter for idea
applicability and further idea development
• Platform development – creation of an entire
product that suits all customers
• Customer development – product customization
• Simultaneously pursuit of exploration and
exploitation within each organization unit,
where employees make their own
judgement about when to exploit or explore
• Empower employees
• Sequential exploration and exploitation activities
performed by one organisational unit over time.
• Organisation alternates between long periods of
exploitation and short periods of exploration.
• Organisation shifts from one activity to another over
time.
• Exploration and exploitation activities are
performed sequentially across functions and
domains.
• Activities are not synchronised in each domain as
long as an overall balance is maintained.
• Based on constant ongoing resource exchange
and collaborative problem solving.

4. The three stages towards innovation is a plan that Recaro should implement,
however a lack of communication could be a threat to its success
Organizational design = combination of differentiation of functional units and effectiveness of their integration
Support
Division of R&D department into three stages
• The division of functional units is source of
expertise and higher focus on the core
competencies
• More specific target to achieve for each unit
• Timing of efforts, technology roadmap
Idea Generation
• Involves several sources, including diversity of
perspectives, which enforces the validity of the
outcome
• Employees management, external resources, trade
shows, workshops
• All the way through the process development,
customer requirements, wants and needs are
considered and monitored closely (through
workshops)
Innovation Development
• Contributing to the further confirmation of
feasibility
• The coordination and control of COO-
Steering-Committee includes several
departments in decision-making which adds
the consistency to the value of idea
Platform Development
• The final product can be customized based
on the customer demand
• This enables to company to amortize R&D
cost
Impede
• Based on the case, an effective communication is a key driver of
the integration; however there might be a lack of communication
between Innovation and Platform units
• Being involved in the process of generating new ideas does not
equal to oversee the experimental prototypes
Intellectual property rights
• Under the IP laws, the
employer owns all the ideas
generated by its employees
within the company
• This could be an obstacle to
the involvement of employees
in the process development
and motivation
Idea generation
• The idea pool is accessible
only to defined group of
employees, thus the final
decision-making is based on a
narrow perspective
• This questions the reliability of
the ideas assessment
• Innovation is a core element of
the process; hence relying on
this responsibility of defined
group is very risky
Should and should not factors
• Variety and diversity of perspectives
• Focus on time saving and expertise
development
• Innovation as a core
• Employees contribution leads to higher
motivation
• Assuming that the communication is
handled, it is a change, Recaro
should commit to this change
Actions to be taken by Mark Hiller
“The whole is more than the sum of its parts”
Integration and communication between all company’s units are a
key elements in a success of this change implementation