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Case Study

Untangling spaghetti: How innovation changed at Oticon (A)

By Paul Strebel, Anja Maier and Søren Stranne

14 pages

May 2014

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Reference: IMD-7-1527

The bottom-up “Spaghetti Organization” for pioneering innovation at Oticon was successful growing the top line for almost two decades, but gradually became too fragmented and costly as the company increased in size. The failure of a high cost revolutionary new product launch, together with the appointment of a new president triggered a redesign of the innovation process towards technological innovation in competence domains producing modules that could be assembled into new products designed by brand specific product teams. However, the new innovation process led to frustration and confusion.

Learning Objective

Managing change in the approach to innovation. Designing an innovation process adapted to the evolution of technology and organizational size, especially the tension between bottom-up creativity and developing an integrated product portfolio that exploits changing market needs. Understanding the importance of aligning organization and culture to support change (application of the Galbraith Star Model).

Keywords

Change Management, Process, Company, Development

Settings

World/global, Denmark
Oticon, Healthcare, Medical Devices
1991-2014

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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