Key words business process, global, communities of practice, simulation, telepresence ... In global high-technology industries, small inventive companies are ...
Global business process development in a virtual community of practice*
Riitta Smeds Professor, Information Networks, Department of Computer Science and Engineering, Director, Enterprise Simulation Laboratory SimLab, Helsinki University of Technology, P.O. Box 9560, 02015 HUT, Finland
Jukka Alvesalo Management consultant, Arthur D. Little (Schweiz) AG, Seestrasse 185, CH-8800 Thalwil / Zürich, Switzerland Abstract: The development of global business processes is presented as a negotiation and learning process between the local practices and the global design, applying the theory of ‘communities of practice’. To be able to engage in global process development, the local communities of practice need methods that support their social imagination of global membership. The article presents process simulation as such a ‘locating’ method, and tests it in a truly global setting: in a telepresence simulation between two units of a telecommunications company in two different countries, engaged in the development of their global New Product Introduction process. According to the results, process simulation enabled innovative negotiation between the local practices concerning the global process design, although the telepresence solution caused some limitations. Based on the results, the article suggests methods to manage the emergent global process development further in the case company. Key words business process, global, communities of practice, simulation, telepresence
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Smeds, R. and Alvesalo, J. (2003) Global business process development in a virtual community of practice. Production Planning and Control, Vol 14 No 4, pp. 361-371
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1. Introduction In global high-technology industries, small inventive companies are frequently acquired by larger multinationals, with the aim to rapidly convert their inventions into profit-generating innovations. R&D is becoming a network of globally dispersed ‘knowledge production’. At the same time, manufacturing faces the growing need for more flexible, more cost-effective and speedy delivery of the new products to the market. Shortening the time-to-market of new products, from the globally scattered R&D units through the manufacturing locations to the end customers is the main driver of global business process development. In the development of global business processes, management is faced with the dilemma of local versus global designs, centralization versus decentralization, control versus autonomy. Based on the central principles of the theory of ‘communities of practice’ (Lave and Wenger 1991, Wenger 1998) we suggest that the solution does not lie in either-or, but rather in both-and: in the continuous learning and innovation between the local practices and the global processes. This ‘locating’ approach is needed in global business process development to ensure the continuous renewal of the networked company. The aim of this article is to apply the theory of communities of practice to global business process development, and to test the potential of business process simulation over telepresence as a method to support a ‘locating’ development strategy. The empirical basis of the article is an action research project in a global telecommunications company that developed through process simulation its R&D and manufacturing interface into a new global New Product Introduction process.
2. Theoretical background 2.1. Industrial organizations as constellations of communities of practice
The basic activities of industrial enterprises, marketing, R&D and manufacturing, are typically functionally organized into departments. This has led to the emergence of functional communities of practice (Wenger 1998), organizational ‘silos’ with highly specialized knowledge, terminology
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and sub-culture, sharply detached from each other through departmental borders. The increasing competition in speed, cost, quality and flexibility in fulfilling customer needs has however triggered efforts to interconnect the separated practices into streamlined processes, or even interorganizational networks, and thus to radically improve business performance (e.g. Skinner 1974, Porter 1985, Smeds 1988, Stalk and Hout 1990, Wheelwright and Clark 1992, Smeds 1994, Womack and Jones 1994). With the emergence of business process structures, the previous functional communities of practice have however not disappeared. The functional departments have redefined their identity and meaning in the formation the process-oriented structure, and co-exist and co-develop with this broader organizational constellation (Wenger 1998: 258). A constellation originally means the grouping of several stellar objects that are seen as related into a configuration. Mintzberg (1979: 446-450) applies this concept in explaining organizational structuring (‘work constellations’). In Wenger’s theory, the concept organizational constellation is used to describe the combination of interconnected communities of practice. A constellation of communities of practice is a particular way as seeing them as related, based on the adopted perspective. A given community of practice can be part of any number of constellations; communities of practice define themselves in part by the way they negotiate their place within the various constellations they are involved in (Wenger 1998: 127-128). The restructuring of a functional organization into a new process-oriented constellation, if successfully implemented, is a huge learning possibility for all communities of practice involved, and for the whole organization.
2.2. Communities of practice
Communities of practice emerge, recognized or not, whenever people work together. Communities of practice identify themselves through the ways of organizing their membership internally, and
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through the ways of belonging to the greater organization. Through the engagement of their members, the communities negotiate the meaning and identity in the larger organization, preserve and create knowledge in interaction of personal experience and competence, and act as basic nodes of organizational communication and of organizational learning. Communities of practice are also the home for individual work identities. The members develop their individual identity as knowers in their community, which gives them the personal meaning and interest in the development of their own work and the community. The negotiability of identities is an important principle on the individual as well as community level. According to Wenger (1998: 248), the field of negotiability affects how communities of practice direct their loyalty, their interest, support and allegiance to the larger organization. It affects also how the individuals view their scope of influence, what they try to understand and to improve, what information they try to seek and what they do with the information and resources that are available. Above all, it affects what they care about, because they can have an effect on it. Once something has become negotiable e.g. in a business process re-engineering project, it expands our identities because it enters the realm of what we can do something about. Learning in such changes is a transformation of identity. It is a profound learning experience that cannot easily be undone. Opening or closing, tightening or loosing the field of negotiability of our work identity can have more effect on learning than most other kinds of change programs.
2.3. Design and practice - the dualism of structure
According to Wenger (1998: 233) there is an inherent uncertainty between design and its realization in practice: practice is not a result of design, but rather a response to it. Design is prescribed, whereas practice is emergent and restructures itself in the face of new events. The design acts as a boundary object around which the separate communities of practice can emerge and organize their interconnections. Organizations are dual structures of institutional design and emergent practice, which interact and influence each other, but maintain their own integrity. Their relationship is not one of congruence,
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but of negotiated alignment, which has to be constantly re-negotiated. This negotiation is the source for improvisation, innovation, and organizational learning. The challenge of design is thus not to eliminate the emergent, but to include the emergent in the design and make it an opportunity for continuous learning and re-design. (Wenger 1998) This dualistic relation of design and practice can be found in the theories of organizational structuring (Mintzberg 1979) and in strategy formation (Mintzberg and Mintzberg 1988), and in the co-evolution of these two into new business models (Smeds 1988, 1994, Hannus 1994, Hamel 2000). Henry Mintzberg’s concept of ‘umbrella strategy’ (Mintzberg and Mintzberg 1988) can be said to act as a boundary object around which a company’s strategy emerges in managed selforganization, as a result of strategic action, innovation and learning (Smeds 1994, 1996). Organizational design consists of a repertoire of institutional artefacts, e.g. procedures, rules, processes, systems, policies, contracts, documents, terms, concepts and other forms of explicated practices that connect different communities of practice into a larger structure by crossing their boundaries. These institutionalized artefacts are amenable to design, to management and to measurement. But institutionalization also consumes energy. ‘With a lack of design, there might not be enough material to hold the organization together. And conversely, excessive institutionalization stalls the organization in so far as the practices end up serving the institutional apparatus instead of the other way round’ (Wenger 1998: 243-244). To design and successfully implement a new organizational structure is thus not a trivial task. Basically, it requires designing for learning and innovation, making the organization ready for the emergent. This requires only a minimalist design (Wenger 1998: 233), some minimal and critical amount of artefacts, around which the separate communities of practice can re-organize into a new broader constellation. The minimalist design leaves room for negotiability, where the different communities of practice can in various forms of participation negotiate and create their new identity and meaning in the broader constellation. It is thus as important for a design to create channels of communication among practices as it is to create the artefacts for them to live by (Wenger 1998: 247).
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2.4. Business process development: locating or localizing?
Business process development projects can in principle proceed according to two different approaches: locating or localizing. They both aim to promote the alignment of practices to a new process structure, but in different ways. Locating functional practices into a new process-oriented constellation is a learning-based strategy of process development. A new process design is given, not as a prescription but as a ‘minimalist boundary object’, a skeleton for the emergent structuring through practice. Around this skeleton, the separate functional communities of practice jointly negotiate their new identity and meaning, understand their new role in the process and integrate new responsibilities into their practices. Locating typically creates overlaps in the practices, which means that the formation of the new structure requires communication and negotiation across the local practices. Simultaneously, they negotiate and give meaning to the new process design. The locating approach thus creates relations not between the global design and the local practices, but among the local practices in their constitution of the new global process (Wenger 1998: 260). The opposite localizing approach aims to give globally pre-designed procedural prescriptions to the local practices. This ‘top-down’ approach has been the traditional business process reengineering approach. It privileges the knowledge of those who define the prescriptions and hides the knowledge of those who apply. The aim is to atomize the practices so that each location can make independent decisions. Overlaps are avoided, and the scope of responsibility of the localized activities is narrowed. Localizing achieves procedural alignment, but causes a loss in engagement, communication and negotiation, and thus a loss in learning (Wenger 1998: 262). Many failures in traditional business process re-engineering projects (e.g. Cleland 1996) are consequences of this localizing approach, which ignores the knowledge and necessary engagement of the communities of practice.
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The learning-based locating approach is supported by research on change management (Mumford 1981, Moss-Kanter 1983) and on organizational learning (e.g. Nonaka and Takeuchi 1995, Nonaka and Konno 1998, Leonard and Sensiper 1998). Also Continuous Improvement (Imai 1986, Bessant and Caffyn 1997), Total Quality Management (Oakland 1993) as well as evolutionary business process development (Smeds 1994, 1996, 1997a, b, Smeds et al. 2003) share this basic principle of empowerment for process development. A locating approach is likely to yield a much more efficient process, rather than a reengineering project with localizing procedures (Wenger 1998: 260-261).
2.5. Multimembership and social imagination for organizational innovation
In present complex organizations, employees participate in multiple communities of practice. These communities are further organized into many global constellations, e.g. into divisions, units, departments, processes, programs, and projects. This experience of multimembership at work (as well as in private life) creates a potential for learning and innovation, and contributes also to the formation of individual identities. The reconciliation necessary to maintain the identity when moving from one community of practice to another is a significant individual learning challenge (Wenger 1998: 158-160). However, there are two types of limitations to concrete engagement in multiple communities of practice. First, there are limits to the amount of communities that an individual can simultaneously participate in. And second, membership as practical engagement is always local. Thus, no global knowledge about a constellation can be achieved at the level of practice. A constellation can only be known partially, with respect to the concrete engagement of the members in the included local communities of practice. Even management, which takes responsibility for the organization as a whole, remains local in its own community of managerial practice: management has to surrender the details in order to focus on the broader institutional connections. But imagination can transcend these limitations and bring the global in the local. The members of local communities of practice can imagine the belonging to a new constellation, and contribute
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through their imagined membership to the negotiation and formation of the emergent new structure. The process of imagination requires a social focus, so that the members of the different communities can orient themselves toward the new constellation and each other in the new context. In shared imagination, the members of different communities of practice can together give meaning to a new constellation, and their own role in it. Negotiating the new meaning and identities of the communities of practice in new organizational constellations in imagined multimembership is a powerful way to foster organizational learning and innovation (Wenger 1998: 257-259). What can be developed in this way through imagined membership depends on the available material for imagination. Primary examples of present day innovative constellations for organizational learning are business process and network structures that combine different communities of practice into new customer-oriented, business driven cross-community designs. The challenge for management is to organise and give direction for this imagination: to connect the knowledge that exists in the different communities of practice into a dynamic and systemic imagination and innovation process around strategically wise constellations towards the organization’s vision. When discussing global versus local practices, Wenger (1998) means the organization as a whole, in contrast to the local practices. But in this paper, global business processes literally mean processes that consist of practices distributed around the globe. This adds the dimensions of physical distance and cultural differences to the problem of process development. How can a locating approach for business process development be achieved, with communication, negotiation and co-creation of meaning in imagined membership between geographically, culturally and historically diverse local communities of practice? Wenger’s theory suggests that for global business process development, a strategically directing ‘minimalist’ global process design is needed, and that a field of negotiation, imagination, innovation and learning between the local communities has to be left open. The minimalist design has to provide good communication channels and resources for this negotiation, as well as
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methods to capture into the design the emergent knowledge created through the interaction of the local practices. Process development should be managed around this minimalist design, consciously allowing learning and innovation to emerge both in practices and design (Mintzberg and Mintzberg 1988, Smeds 1988, 1994), and facilitating social imagination of multimembership.
3. The business process simulation method
The aim of business process simulation is to create a joint knowledge sharing and creation space (in Japanese ‘ba’, Nonaka and Konno 1998) that supports the conversion of participants’ tacit experience into explicit knowledge, and its effective sharing, combination and internalisation into new process innovations (Nonaka and Takeuchi 1995). The method has enabled strong learning and development effects in numerous process development projects (e.g. Smeds 1994, 1997a, Ruohomäki 1995, Piispanen et al. 1996, Haho and Smeds 1997, Smeds et al. 2003). Business process simulation is basically a structured, directed and visualized group discussion about the activities, tasks and information flows in a selected business process. A group of up to 50 people discusses in front of a visual process model their practices and interactions in the process, and negotiates their roles and identities in the process design. Real case projects are systematically ‘talked through’ in a process-oriented way, to enlighten the reality in the process and to bring into negotiation the tacit experiential knowledge of the participants. The visual process model acts as a virtual design (boundary object, Wenger 1998), around which the new practices and memberships can be imagined and brainstormed. The simulation room itself is furnished to support the visibility and audibility and to stimulate the discussion. The composition of the simulation team is critical for the validity of the simulation. It should represent all the local communities of practice that interact in the process to be developed. In the simulation, the tacit as well as explicit knowledge of the local communities of practice is brought together, represented by their experienced members, for the imaginative discussion and negotiation about the work and role of their communities of practice in the larger process. Guided by the visual process models and a facilitator, the participants share their experiences about the
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concrete cases and exchange first-hand information about the conformity of the cases with the process. This leads the whole group into a creative discussion about the lessons learnt from the cases onto the process, from practice to design. Ideally, all people involved in the case projects should participate in the simulation as active players, since they are the carriers of concrete experience. In addition, managers of the affected functions, process development people, and people from other case projects should attend the simulation as active observers, who also participate in the discussion. The facilitator ensures a smooth flow of the discussion. His/her task is not to impose any thoughts on the audience, but to guide the group through the process by encouraging interaction and by asking appropriate questions. Therefore, it is preferable that the facilitator knows the process and the case projects well enough, but is a neutral outsider and has no vested interests in the process to be developed. During the discussion-based simulation of the selected cases, a mutual understanding about the roles and activities of the interacting local practices in the larger process starts to build up. The different vocabularies of the practices begin to give way to shared concepts, and development ideas are created concerning innovations in the local practices as parts of the broader process, as well as the process design as a whole (Smeds et al. 2001, 2003). - Some of these ideas can be immediately implemented to practice, some require more investment and effort. The latter should be strategically prioritized and organized into separate process development projects (e.g. Smeds 2001, Smeds et al. 2003). Applying the theory of communities of practice, we can say, that the process simulation method supports a locating approach to business process development. It visualises the broader constellation of local practices, i.e. the new business process design, and ‘locates’ the practices into this new design, allowing the participants as a group to imagine and re-negotiate the roles, responsibilities and identities of the local practices in this new process, and also to negotiate the new process design itself. Thus, the process simulation method enables the members of the local communities of practice •
to ‘see’ the new process design that crosses the boundaries of the local practices
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to imagine and negotiate together the new identities of the local practices in this process, and
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to shape together this global process design.
Thus we can say, that the process simulation method creates a ‘virtual community of practice’ for process development. In the process development case presented next, the method was applied to support the dialogue of two geographically dispersed units in their learning and shaping of a new global business process. The simulation was realised in a demanding telepresence mode (Smeds et al. 2000, Smeds and Alvesalo 2001, forthcoming)
4. The case company and its global New Product Introduction process
The case company is an international telecommunications company founded in 1975 in USA. The company’s core products consist of telecommunication networks and related software and services. During the 1990s, the company grew rapidly through several acquisitions in Europe and Middle-East Asia (EMEA). One of these acquisitions was a small high-tech unit in Denmark, acquired in 1999. Currently, the company employs approximately 6000 people worldwide. This globalisation has meant huge organizational and process re-engineering challenges, especially in cross-site product development and product transfer from one manufacturing unit to another. The parent unit in the USA has designed global processes to be implemented in the local units, however, with limited results. Development initiatives stemming from the local units in Europe have not been successful either. The global New Product Introduction (NPI) process development project has its roots in the company’s Finnish unit. In the development simulations of the R&D process during the spring of 1999 (Smeds et al. 2003), Operations Management found that the complex and unclear interface between R&D and Production caused many time lags that delayed the launch of new products to the market. As a result, the NPI project was initiated, with the aim to design the interfaces between R&D and Operations into a clear process, not only in Finland but on the global level.
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The objective was to plan and implement a new global NPI organization and process with standardized interfaces to the local level processes. In this way, the detailed local processes could be defined according to local requirements, and the more general global processes would ensure sufficient compatibility between the locations. The NPI process should create clear links to the newly implemented global R&D process, and simultaneously fit well to all European factories as well as to the US parent. Because of the multi site nature of the company’s R&D projects, the NPI project was from the beginning conceived as an EMEA-wide effort. Instead of their previous local process development approach, the Finnish unit employed in the beginning of year 2000 an external, neutral consultant from the UK. Taking the Finnish NPI process as a starting point, the consultant succeeded well in his alignment work in Europe: every unit was happy that their suggestions had been accepted into the global NPI design. To support the global NPI process design, the company also developed a web-based NPI knowledge tool. It contained documents, templates, and best practices for the global NPI organization. The global process design was ready to be validated and launched in September 2000. Since the NPI process was to be applied across sites, its validation would also have to be cross-site: a business process simulation was to be arranged between the company’s Finnish site and the newly acquired Danish site through telepresence. Further aims were to train the personnel in the new process, to support its swift implementation, and to collect new ideas for its further development.
5. Telepresence simulation for ‘locating’ process development 5.1. The process model and the simulated cases
The consultant had developed the global to-be process model in collaboration with representatives from all participating EMEA-units. This model was used as a basis for the visual process model to be used in the simulation. The selection of the illuminative simulation cases for the new process was difficult. It is obvious, that the new NPI process still had not been applied in new product introduction. In addition, since
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the Danish unit had not yet brought any R&D project into volume production, the Danish NPI experience differed markedly from the Finnish unit. After careful analysis, three Finnish R&D projects were chosen that had been introduced into production according to the Finnish NPI process. They were fitted now into the different phases of the new global NPI process, to simulate and evaluate the new process. In addition, one on-going Danish-Finnish NPI project was selected, to discuss the real problems in cross-site NPI. The main facilitator interviewed the project managers and key employees of the case projects both in Finland and Denmark, and prepared thereafter the simulation manuscript.
5.2. The participants and the simulation environment
The total amount of simulation participants in the Finland - Denmark cross-site NPI simulation were about 75 people, from which 65 were active simulation participants: players and observers from the personnel of the two units, and company representatives from the units in USA and Ireland. From the active participants, 40 were gathered in SimLab at Helsinki University of Technology, Finland, and 25 in the company auditorium in Denmark. The rest of the participants were external consultants and academic support staff, located mainly in SimLab. The players represented the four different case projects. The observers were chosen to cover the relevant functional linkages to the NPI process, so that they could comment on the specific issues related to different parts of the process. This meant a broad representation of several functional people at least from R&D, Operations and Marketing. SimLab researchers built the telepresence solution to both auditoriums from standard equipment and software. The auditoriums had three PC-computers running NetMeeting software, which allowed to share identical visual screen images over the Internet in real time. Video projectors projected the shared process models and other documents on the auditorium walls. The PictureTel videoconferencing device was enhanced through an additional multi microphone and multi loudspeaker audio system. (c.f. Smeds and Alvesalo 2001, forthcoming).
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The second author of this paper acted as the main facilitator of the simulation in SimLab in Finland. This was the ‘near end’ of the telepresence simulation, in control of the simulation as a whole. The first author co-facilitated the simulation at the ‘far end’ in Denmark. 5.3. The simulation The simulation was run during one full working day. The morning session consisted of an introduction to the methodology, and thereafter a talk-through and discussion of the different phases of the global NPI process in the light of the three Finnish case projects. After lunch, the NPI process was discussed from the perspective of cross-site cooperation, using the Danish R&D project where the product at the moment was being introduced to production in Finland. In the afternoon, some more detailed issues were dealt with especially from the point of view of DanishFinnish NPI (product changes, prototype orders, and running a pilot batch). During the simulation day, participants in both ends wrote down their process improvement ideas or perceived problems on stickers, which they then attached to identical paper-based process maps on the wall. At the closing of the simulation day, these ideas were orally and visually presented and shared in the whole virtual simulation team. The telepresence connection did not run without problems. The videoconference communication experienced some cut-offs because of bottlenecks in the Internet connection. However, the discussion could be restored and further breakdowns of the Internet could be avoided. (c.f. Smeds and Alvesalo, forthcoming)
6. Evaluation of the telepresence process simulation 6.1. Research data and methods
The telepresence simulation of the global NPI process was evaluated with multiple methods. A structured questionnaire measured immediate participant feedback on technical realization, opinions about learning and motivational effects, and expected organizational impacts of the simulation. The 36 answers of the active participants, 14 from Denmark and 22 from Finland (return rate 55 %) were statistically analysed. We also collected the process improvement ideas of
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the participants and classified them according to their content. During the whole simulation day we made qualitative observations, which were backed up by a video recorded in Finland. Approximately six months after the telepresence simulation, we conducted follow-up interviews among the simulation participants in Finland. Eleven individual interviews and one groupinterview of six people were qualitatively analysed to evaluate the impacts of the telepresence simulation and of the NPI project at large. Unfortunately, we were not able to conduct interviews in Denmark. The technical functionality, social interaction and organizational learning aspects of the telepresence simulation have been analysed in depth in another article (Smeds and Alvesalo, forthcoming). In this analysis, we interpret the results applying the framework of ‘locating’ process development.
6.2 Results Seeing the global process constellation According to the participants in both locations, the visual process map helped them to follow the simulation and to understand the NPI process and its more detailed sub-levels, as well as the dependencies between the different parts in the process. Thus, although the questionnaires reveal shortcomings in overall visibility and audibility during the telepresence simulation, the global NPI process map and other simulation information about the process really acted as a boundary object, a virtual design of the new global constellation, around which the negotiation of the local practices during the simulation day could unfold.
Imagining and negotiating memberships and identities in the global process The participants were quite satisfied with the composition of the huge simulation team where also top managers were present, and they felt able to participate freely in the discussion. However, the interaction over the telepresence connection was perceived as rather weak. In addition to the technological limitations, the people in Finland and Denmark did not know each other, and the
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work roles of the participants on both sides were not known either, as was reported in a follow-up interview in Finland. Evaluated as a whole, telepresence, now used for the first time, did not create a feeling of ‘being in the same room’. The Danish opinion was significantly more negative than the Finnish near-end. Locally, however, the informal discussions during simulation breaks created a trustful climate and built direct communication channels between participants. Although the interaction across sites was not very active, the interviewees in Finland told that simulation had increased common NPI process understanding and clarified process terminology, interfaces, milestones, and the division of tasks. The implementation of new work procedures had become easier. Also communication and trust between the sites had increased. The questionnaires confirm good estimates about immediate learning and motivational effects and strong development needs perceived on both sites, with slightly higher averages in Finland. The participants also felt that the ideas generated in the simulation can be used in developing the NPI process further, and that they can concretely utilize the learning from the simulation in their daily work. They believed, although not quite as strongly in Finland as in Denmark, that the ideas can help in shortening the duration of the NPI process. In these questions, we compared the answers of R&D personnel (N = 13) with the answers of the representatives of Operations and NPI (N = 20), irrespective of their physical location. The results show that the initiators of the NPI project, the Operations and NPI representatives across sites, believe significantly more strongly that they can utilize in their work the lessons from the simulation, and that the ideas can shorten NPI process duration. They seem already to have a more coherent ‘NPI-identity’, whereas R&D is still more cautious in NPI process development. We can say that the imagination and negotiation of the new NPI process identity over telepresence is a huge learning and human interaction challenge, in Finland as well as in Denmark. The participants’ positive estimates about the learning and motivational effects, and the development needs that they foresee, indicate that this challenge was successfully faced, although the telepresence solution dampened effective human interaction between the two locations.
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Shaping the local practices and the global process design During the simulation, the participants came up with altogether 79 process improvement ideas concerning the NPI process, 43 in Finland and 36 in Denmark. The ideas were later analysed and categorised according to their contents by the company’s NPI process developers. The ideas overlapped, one idea could be classified into several content categories (Table 1). The six most important content categories, and the conclusions drawn by the company, are briefly explained in the text below. For each category, also a theoretical interpretation is given.
[Insert table 1 about here]
Process flow and definitions is the category that the majority of the ideas (28) touched. In Finland, this category was second most common as main content of an idea, in Denmark the fourth. The ideas concerned e.g. new dependencies between tasks, and extending responsibilities across several functions. Two fundamental problems in the global process design were also discovered. The first was related to the mismatch of the front-end of the NPI process with other business processes. The second concerned the last phase where the hand-over of responsibilities from NPI to manufacturing should occur. According to the company, these problems require further organizational and process development action on global level. •
These ideas show that the process simulation started local negotiation that shapes also the global design.
Responsibilities in the NPI process were mentioned in altogether 23 ideas. As main idea content, this category came third in order of frequency in both countries. The huge amount of ideas indicates to the company, that the NPI process might not yet be detailed enough. Some complicated tasks might need additional more detailed sub-level processes. •
The simulation helped to imagine the new memberships, roles and responsibilities of the local practices in the global NPI process, and to start the negotiation to define them.
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Materials management, mentioned in 21 ideas, was the most frequently mentioned main idea content both in Denmark and in Finland. It is the crucial link between R&D and manufacturing. According to the company, the ideas clearly indicate, that NPI materials management should be developed locally as sub-processes for the global NPI process. Thereafter the local processes should be integrated with the global process tool. •
The simulation started the negotiation and definition of local materials management in relation to the global NPI process, and showed the need for an artefact that supports communication between the local and the global processes.
Terminology and definitions appear in 13 ideas. Terminology has clearly been different on the two sites even though the ways of working are often similar. Terminology is perceived in the company as a significant problem that needs clarification, as the new global NPI process attempts to harmonize the different local processes of different EMEA sites. •
The simulation supported the local practices in the creation of a shared language and concepts, and in the definition of new meanings of the local practices in the global process.
The pilot process was touched upon in 12 ideas. It introduces the first batch of a new product to the production line. The definitions, responsibilities and roles within the pilot process seemed to be unclear. Based on these results, the company concluded that a development project is needed that creates one or several local sub-processes for the different piloting sites. These sub-level processes should thereafter be linked to the global level NPI process as sub-levels. •
The simulation started the negotiation of new roles and responsibilities in the pilot process, a sub-process of the global NPI. This negotiation revealed a need for several different local pilot processes, as well as for a design that connects them to the new global NPI process.
Design for Manufacturing, Assembly and Testability were issues touched upon in 10 ideas. They were second most common as main idea content in Denmark, fifth in Finland. These issues were not clear to the different functions: the responsibilities of R&D designers, NPI leaders and manufacturing support personnel were unclear. According to the company, a personnel training effort is clearly needed.
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•
The simulation showed overlaps and inconsistencies between the local R&D, NPI and Manufacturing functions. It helped the members of these functions to imagine their new memberships in the new global process, and to start the negotiation of new local roles and responsibilities.
7. Conclusion Based on the results, we can say that the process simulation over telepresence helped the participants from different functions and different sites to locate their practices through social imagination into the new global NPI process design. In this imagined new constellation, defined through the new process model as a visually shared boundary object, and simulated through the facilitated discussion of real cases, they could imagine and negotiate their new work roles and responsibilities. Thereby they discovered overlaps, gaps and inconsistencies, and found many important development ideas on multiple levels - in the global process, in the local sub-processes and in their own local practices - and at their interfaces. Thus we can say that the process simulation over telepresence as a whole furthered a locating process development approach, although the telepresence restricted human interaction across the distance. Important process learning and development ideas were generated, and a field of negotiability was opened. In addition, the simulation experience has also created the belief that these ideas can be used in the further development of the NPI process, as well as in daily work. A motivation and need for change has been awakened in the two units, to which management should answer in the future.
8. Future challenge: Maintaining the dialogue for continuous learning and innovation
In the spring of 2001, half a year after the launch of the NPI process, both the R&D and NPI processes were updated and officially accepted by the company as global process designs. However, the local NPI practices did not fully fit the global design. The US unit’s NPI web pages did not include the new process description. The different local organizations told officially that they apply the NPI process, but their check-lists and reports still followed the old design.
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In the words of the EMEA Operations manager of the company, successful inter-site new product introduction requires in principle a globally identical NPI process. But, at the same time, it is quite possible that after implementation, the local practices start to grow apart. And after a while, the company would not any more be able to identify the global process in the local practices, not to speak about trusting that at the defined process milestones the agreed actions would have been taken care of. This drifting apart supports Wenger’s theory of duality between design and practice. It is impossible to solve process alignment with a frozen global ‘super design’. Instead, what can be achieved, through locating process development projects, is a constant communication and learning between the local practices in their constitution of the global design (Wenger 1998). As a matter of fact, the company has planned to introduce several mechanisms to support constant negotiation for global process learning. A kind of ‘quality assurance’ system is planned for the NPI process. The NPI leaders world wide are planned to meet regularly to share their experiences and lessons learned from the local NPI practices, and to bring the recurring problems as inputs to the continuous development of the global NPI process. A global decision making body is then needed, to decide upon the changes in the NPI process and to manage the new process releases. These two teams form a hierarchical structure to support and direct the dialogue between the local NPI practices and the global NPI process - never reaching the ‘final’ NPI process design, but constantly learning and developing in interaction with the local practices. Applying the theory of communities of practice (Lave and Wenger 1991, Wenger 1998), the representational interaction of the NPI leaders and a decision making structure are however not enough for global process development. Communication and negotiation channels for direct interaction between the local practices are also needed. This requires a conscious management of global process innovation, including new resources and tools to support the dialogue between the local practices, as well as between local and global. The NPI process web-site supports the sharing of explicit process information between peers in the different local units. But the emergence of global processes requires also sharing of tacit knowledge
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of the local practices. Cross-site simulations that combine the local NPI practices into a global NPI process in joint imagination, even over telepresence when real presence cannot be achieved, could be periodically repeated. This could sustain the fruitful dialogue between the local communities of practice and global process design for continuous learning and innovation.
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SMEDS, R., 1997a, Organizational learning and innovation through tailored simulation games: two process re-engineering case studies. Knowledge and Process Management, The Journal of Corporate Transformation, 4, (1), 22 - 33. SMEDS, R., 1997b, Radical change through incremental innovations: generic principles and cultural differences in evolution management. International Journal of Technology Management, 14, (1), 146 - 162. SMEDS, R., TAKALA, T., HAHO, P., GRÖHN, M., JALKANEN, J., NIEMINEN, M., and HAUTALA, I., 2000, Possibilities of multimedia in business process modeling and simulation. In V. Landeghem, R. Smeds, and J. Riis (eds.) Games in Operations Management (New York: Kluwer Academic Publishers), pp. 15 - 24. SMEDS, R., 2001, Implementing business process innovations: an agenda for research and action. International Journal of Technology Management, 22, (1-3), 1 - 12. SMEDS, R., and ALVESALO, J., 2001, Applying telepresence in business process simulation. Case: reengineering cross-site new product introduction. In J. Cano and M. Saenz (eds.) Proceedings of the Sixth International Workshop of the Special Interest Group on Games in Production Management, pp. 197 - 220. SMEDS, R., HAHO, P., and FORSSÉN, M., 2001, Implementing knowledge into action in rganizations. Simulation games for successful process innovation. In E. Pantzar, R. Savolainen, and P. Tynjälä (ed.) In Search for a Human-Centered Information Society. Reports of the Information Research Programme of the Academy of Finland (Finland: Tampere University Press), pp. 171 - 194. SMEDS, R., HAHO, P., and ALVESALO, J., 2003, Bottom-up or top-down? Evolutionary change management in NPD processes. International Journal of Technology Management (in print). SMEDS, R. and ALVESALO, J., forthcoming, Telepresence in cross-site business process simulation. Lessons learnt in technology, social interaction and organizational learning. Accepted for publication in Production Planning and Control. STALK, H., and HOUT, T.M., 1990, Competing Against Time, How Time-Based Competitions is Reshaping Global Markets (New York: Free Press).
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WENGER, E., 1998, Communities of Practice. Learning, Meaning, and Identity (CambridgeCambridge University Press). WHEELWRIGHT, S. C., and CLARK, K. B., 1992, Revolutionizing Product Development, Quantum Leaps in Speed, Efficiency and Quality (New York-The Free Press). WOMACK, J., and JONES, D., 1994, From Lean production to lean enterprise. Harvard Business Review, 72, (2), 93 - 103.
Acknowledgements This paper is based on broad research collaboration of our SimLab project at Helsinki University of Technology. The technological solution of the telepresence simulation was constructed and run by the SimLab researchers Olli Seppälä, Mikko Wirgentius and Antti Latva-Koivisto. Päivi Haho acted as the process simulation expert and co-interviewer of the follow-up in Finland. The second author conducted the case study as an action research project in the company, while the first author is responsible for the theoretical framework and interpretations of the results. The research was financially supported by the following organizations, which is gratefully acknowledged: Technology Development Centre Tekes, Academy of Finland EVOLVE project, ABB Industry Oy, Orion Corporation Orion Pharma, Tellabs Oy, Hewlett-Packard Oy and Silicon Graphics Oy.
Biographical notes: Riitta Smeds holds a M.Sc. (Tech.), a Lic.Sc. (Tech.), and a D.Sc.(Tech.) in Industrial Management from Helsinki University of Technology. She is professor of Information Networks at Helsinki University of Technology, Department of Computer Science and Engineering, and Director of Enterprise Simulation Laboratory SimLab. Riitta Smeds is also Docent in the field of Management of Technology at the Swedish School of Economics and Business Administration, Helsinki. She is board member of CINet, member of IFIP Working Group 5.7 on Integrated Production Management, and chair of the IFIP WG 5.7 Special Interest Group on Interactive Experimental
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Learning in Industrial Management. She belongs to the editorial boards of ‘Knowledge and Process Management, The Journal of Corporate Transformation’, of ‘International Journal of Entrepreneurship and Innovation Management’ and ‘Production Planning and Control’. Her main research areas are management of enterprise evolution, management of technology and innovation, business process development, organizational learning, and enterprise simulation methods. Jukka Alvesalo, M.Sc.(Tech), M.Sc. (Econ.) was involved in the action research and acted as simulation facilitator in the business process development case presented in this article, as part of his Master’s Thesis at Helsinki University of Technology. He is currently working as a management consultant in the area of technology and innovation management at Arthur D. Little’s Zürich office. His main research interests and expertise reside in the fields of Technology and Innovation Management, Knowledge Management and Business Process Reengineering.
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Idea content category
Number of ideas that touched the content category Fin + Den
As main content of idea, in order of frequency (1. = most frequent) Fin Den
Process flow and related definitions
28
2.
4.
Responsibilities
23
3.
3.
Materials management
21
1.
1.
Terminology and related definitions
13
Pilot process
12
4.
5.
DFX issues
10
5.
2.
Operations management issues
7
Processes not aligned
6
Multi-site issues
6
Human resources allocation
4
Testing
4
Prototyping
4
Supporting organizations
3
Time-to-market
2
Making compromises between objectives
2
Forecasting
2
Reuse
1
Undefined
3
43
36
Total number of ideas that touched the
151
content categories (with overlaps) Total amount of ideas
79
Table 1. The distribution of NPI process ideas according to their contents and frequency
