Presentation given by L.J. Lekkerkerk (Hans) at the 2012 STS Roundtable Conference in Canterbury, UK.

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Innovation & Organisation Structure
Development and test of a function model to
study and diagnose structures
L.J. Lekkerkerk (Hans)
Sept. 13, 2012 STS-RT-Working Conference, Canterbury, UK
Stream: Intra-Organizational change

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PhD-Thesis
Doctorate from
Radboud University
Nijmegen
Netherlands
Public Defense, June 5th, 2012
‘neue Kombinationen’
+
‘organizational LEGO’
My Presentation is based on my PhD-thesis I defended last June on my 53rd birthday.
The cover of the book (and so my powerpoint design) was inspired by:
• Schumpeter, Innovation = neue Kombinationen : LEGO is the symbol of infinitely
recombining
• Mintzberg: he refers to organisationa design as ‘playing organizational LEGO’

3. Slide 3
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Contents
• Introducing Hans
• Innovation performance
• Dutch STS-design & innovation?
• A new function model
• Some results of test
With the contents shown here I hope to keep my presentation within 15 minutes for discussion.
Do interupt me if it appears ‘double Dutch’ to you 

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Education & Experience Hans
• 1959 – interest: human ingenuity
• !977-’85 Delft University of Technology,
– BSc Mechanical Engineering - technical
– MSc Organising Production - social
Because of my interest in technology in general I started Mechanical engineering.
However the social side of organisations developing and manufacturing products appeared
even more interesting.
So I am somehow sociotechnical by training ..

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Education & Experience Hans
Pre – university:
• 1985-’96 Fokker Aircraft Composite Structures
– Industrial eng. (process innovations – technical)
– Quality eng. (administrative innovations - social)
– Bankrupt March 1996
• 1996-’97Consultant/trainer
– TQM/Project Mgt
I worked quite a while at Fokker’s Composite Structures Division
Again in projects with technical and social aspects,
Here my idea to study organisation of innovation orginated,
So I’m sociotechnical by experience

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Education & Experience Hans
• 1997-__ Nijmegen School of Management
– Operations Management ~ technical
– Innovation Management ~ technical/social
– Organisation Design = sociotechnical
– 80 MSc-projects & a lot more
• 1997-’12 PhD-Research project = sociotechnical
– Improving innovation succes via structure?
I was happy to be hired by one of the two Universities in the Netherlands where Ulbo de Sitter
had a chair in SocioTechnical Organisation Design
Both my full time teaching and research can be labelled ‘sociotechnical’ again.

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Organisational Structure & Design
• Organisational Structure Design
– Task allocation / division of labour
– Coordination
• Organisation design:
– Organisational structure
– Hard & soft systems
Organisation Structure is about the division of labour and make sure there is coordination.
It is an old problem: In Exodus 18 Jethro advises Mozes to introduce a hierarchical structure.
His method only took span-of-control into account.
Organisation Design may be defined in two ways:
Limited: just the organisational structure
Integral: including the hard and soft systems that ideally fit the structure (instead of fitting the structure
to the existing equipment and ICT.
In the Netherlands two broad design methods were developed both inspired by systems theory or
cybernetics:
1 at Delft University “the Delft school” (where I graduated)
2 at Eindhoven university of Tecnology and later at Radboud University “Modern SocioTechnical- design”

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Innovation performance
• Failure rates: 60 – 95%
• Fokker bankrupt
– too much innovation + Gulf War-crisis
• English Mines 1950’s
– failed process innovations
– (with luckily STS as a ‘spin of’)
Redesigning the structure of an organisation improves the performance of the primary process.
Now the innovation process is poorly performing compared to that:
Sometimes a failed innovation has a positive spin of: STS may be seen that way
how can you redesign an innovation structure?

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Performance ‘by Structure’
Dutch STS-Design
• Developed from early 1980’s (prof. U. de Sitter)
• Jointly optimise Quality of
– Organization (cost, quality, lead time, flexibility,
innovation)
– Work (low absenteeism & turnover)
– Work Relations
• Improves performance of Primary Process

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Performance ‘by Structure’
Dutch STS-Design
• Ashby-based: variety reduction
• Simon-based: modular structure (implicit)
• Interfaces are sources of trouble: eliminate
• Concrete design rules for Primary Process
– ‘Production Structure’
– ‘Operational layer of Control Structure’
• Other ‘control layers’?

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D-STS-model: open system
Production
Structure
Control
Structure
INPUT OUTPUT
This basically is the function model of Dutch sociotechnology
Innovation is defined as function of the control structure
So we have to open this black box: …

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D-STSD-Control Structure (Ashby)
Production Structure
INPUT OUTPUT
Operational Regulation
Regulation by design
Strategic Regulation
Ashby defined three types of regulation:
- Strategic
- Regulation by design
- Operational regulation
Regulation by design is aimed at redesigning the system
Implementing a redesign = innovation …

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Regulation by design = Innovation
De Sitter, 1994, Synergetisch produceren
• Kind of ‘bible’ of Dutch STS-Design
• “Just vague design rules for innovation
structure”
• “challenge for young business scholars”
– On last page 403 …
In 1994 De Sitter publishes the results of his work in a book
Synergetisch produceren; Human Resource Mobilisation in productie. Een inleiding in de
structuurbouw.
Or “Producing synergistically; Human resource mobilisation in production. An introduction to
building structures.
On the last page he admits that he does not yet have concrete design rules voor innovation, so I
took up (t)his challenge.

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Design rules for Innovation Structure?
• Develop from Theory?
– De Sitter did not succeed
• Derive from empirical research?
– Tremendous variety in organisations
– # of organisations = # of different (innovation) structures
– What’s inside ‘Regulation by Design-layer’?
– How to compare & contrast?
– In a holistic integral way?
To develop design rules there appeared two options
Develop from theory, however De Sitter, as I see it, failed in his attempt along this line
Derive from empirical research: som innovators are better than others; what is the difference in their structures
Of course there is an enormous variation in organisations and so in structures.
Systems theory offers a tool to describe the structure of systems in such a way that you can compare & contrast
them.

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Innovation Structure in Models
System theory models as descriptive /
prescriptive tools:
Author: Innovation structure detail:
• De Sitter: 1 layer
• Beer (Viable System Model): 3 functions
• In ‘t Veld: 5 functions
It offers already models that might be usable

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Model (dis)advantages
• De Sitter: 1 layer
– Insufficient detail
• Beer (Viable System Model): 3 functions
– Total 5 functions: ‘necessary & sufficient’
– Claim N&S stands for over 30 years
– Too abstract for practitioners
– Focus on information processing
• In ‘t Veld: 5 functions
– Face validity for practitioners
– Nearly sufficient detail
They were rejected for my study of ‘innovation structures’ because they lacked sufficent detail
on this control layer.
And had some other disadvantages.
So a new model had to be developed …

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So develop a new function model
1. Systematic & integral description of any organizational
structure
2. Detailed innovation structure (for research)
3. Necessary & sufficient functions (viable)
4. Levels of recursion
5. Technical part of system
6. Easily recognised
To: 1 Do comparative casestudies
2 Diagnose structures & redesigns
Six design specifications for a new model serving two purposes
-Diagnose
-Research

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Model Innovation- & Organisation Structure
“the MIOS”
This is how my model looks like in the book …
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Model Innovation- & Organisation Structure
“the MIOS”

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Innovation Structure Functions
Define
mission-C4
Balance-C3
Tune-C2
Remember-C1
Supply-V1
product / serviceInnovate-I1
Search
future
new
options
I4
Search
impro-
ve-
ments
V4
Propose
inno-
vation-
I3
Propose
improve-
ment-
V3
Regulate
supply-V2
Regulate
innovation-I2
“exploitation”“exploration”
8 functions in
Innovation
Structure
Here the blue boxes show that there are 8 functions that belong to the innovation structure.
The Primary Process of an organisation is bottom right: supply and its operational regulation
Define Mission middle: is equal to the strategic regulation layer of the control structure.
To innovate an organisation needs ideas:
-incremental, about existing products, services, markets; ‘red ocean’
-Radical, new products and processes and business models; ‘blue ocean’
Usually there are more opportunities than really promising ideas, so the better ideas are
detailed in a project proposal,
There are more proposals than resources (money, people, knowledge) so a balanced choice has
to be made,
Criteria for these choices come from strategy.
To prevent re-inventing the wheel, an organisation needs a well organised memoryfunction.
This model was presented to an academic specialist and to 4 experienced STS-concsultants.
And approved, the proof of the pudding is in the eating

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Tested in Five Dutch Companies
# name MPS, Main product site empl
1 Eline EtO, Electrotechnical 3 120
2 Amelie EtO, Marine electrotechnical 9 580
3 Ezra MtO, Seed improvement 11 300
4 Leon AtO, Trailers/modules 1 130
5 Rik AtO, Mobile Cranes 1 140
So I was happy to find five organisations willing to partcipate.
For a test, also according to Yin, the sample me be convenient and varied.

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Testquestions
1. Systematic description?
2. Diagnosis?
3. Compare & contrast?
4. Efficiency?
5. User capabilities?
The test had to answer these 5 questions

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1 Systematic description?
• Explain the MIOS to respondents
– On paper before interview
– At start of interview
• To which functions do you contribute?
• Are you related to other?
– You / your department or group
• Discuss all 12 functions

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2 Diagnosis?
• Basic diagnosis per function
– Nobody is doing that
– Informally done by …
– Formally assigned to …
• Detailed diagnosis
– Of Supply-V1 & Reg. Supply-V2: D-STS-theory
– Other functions: innovation mgt literature

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2 Example of diagnosis
Eline
(table 6.2.6)
Not, (in-)
formal
Remarks
Supply-V1 Formal Groups > 20 employees
Reg. Supply-V2 Formal Span of control too large,
mixed with Reg. Innovate-I2
Propose-V3 Informal No format/procedure
Search-V4 Informal Hardly any ideas
At first the description reveals
A function is
-Not done
-Informally done by …
-Formal responsibility and done by …
With additional theory a little more can be said

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3 Compare & contrast?
• 3 Smaller = less formal outside V1 & V2
• 2 EtO different from 2 AtO & 1 MtO
– AtO: 10% of employees ‘product engineering’
– EtO: some innovation in customer projects (so mix
primary process & innovation process)
• Further research: select similar cases
Although the comparisons showed some interesting facts
For future research it would be better to find more homogeneous sets of cases
And for each set design rules for the innovation structure may be derived,

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3 Example of comparison
Because there is no time for the details I just show a table in Dutch.
As you may see, some of the innovation functions are compared here

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4 Efficiency?
• Site visit & introduction
– Website, documents, ‘google’
• Six interviews (test average)
– Depends on # of sites/employees/product groups
• Rich case description
– After some learning: ~2 weeks/case

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5 User capabilities?
1. Basic knowledge of
– System theory must*
– Dutch STS-design must*
– Innovation management helps
2. Experience
– In organizations helps
– Interviewer/researcher must*
* My MSc-students can do it.

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Innovation example – 1 / 4
Search future options-I4:
At Ezra / Amelie
• Sr. Researchers/Engineers
• ‘Scouts’
– Formal / informal
– Stay leading edge in the field
– Develop proposals (I3)
formally assigning senior engineers a scouting role for all relevant fields

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Innovation example – 2 / 4
Propose future options-I3
Ezra & Leon use:
• A Format for projectproposals
– Better exploratory study
– All info to decide is specified
– Decisionmakers well informed
Pretty basic idea to use a checklist,
But it prevents accepting a project propoasl for a system
for flood lighting Jesus statues on top of mountains
without seizing the marketpotential: 1 in Rio? Smome more?

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Innovation example – 3 / 4
Linking operations to design
Rik:
• Production supervisor must approve design
• Formalised way of working
• Use experience improves, manufacturability
(or serviceability)

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Innovation example – 4 / 4
Organisational memory-C1
Rik:
• 23 expertise areas = 23 trio’s
– Sr expert
– Junior expert
– secretary
• Allways two experts

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‘conclusion’
• Model Innovation- & OrganisationStructure
• Works in:
– Practice: diagnosing structure/redesign
– Research: design rules innovation structure
• Perspective: higher innovation performance