Technology and Innovation Management: Teleflex Canada Case Study

Types of innovation that are carried out at Teleflex Canada

Teleflex Canada mostly practices three types of innovation. These are:

1. Incremental Product Innovation

Incremental Product Innovation is the most common product innovation. In this form of innovation, improvements are made in the components to refine and improve the existing design of the product. Only minor changes are considered incremental.

Example from the case study: Under ‘SeaStar Development’ on page 4, forth paragraph says that Teleflex Canada always kept innovating and that their competitors copied their designs. But by the time the competitor launched their product, Teleflex Canada used to launch an even better product to the market, increasing the performance of the product incrementally.

2. Architectural Product Innovation

The components and associated design of the product remain unchanged in the case of Architectural Product Innovation. Only the configuration of the system is changed as new linkages are instituted. Some new components are used which have the same function as the previous component. Most architectural innovations change the overall design of the system and the way the components interact.

Example from the case study: Under ‘Innovation, Technology, and Product Development’ on page 3, a Teleflex Canada Executive says that they don’t use technology that is not proven. They take pride in calling themselves ‘product developers’. They take the existing technology and tweak it to make it better and usually they don’t invent anything radically new.

3. Process Innovation

Teleflex Canada also uses Process Innovation. Process innovation can be described as the innovations in the way an organization performs its business. The biggest example of process innovation in Teleflex Canada is where the Energy Product Development (on page 5, paragraph one) is being discussed. The company never builds a product before taking orders for it. They start with selling concepts along with their credibility in the market. Another example is the military cook stove called MBU. The development of ProHeat, the truck and bus heater provided Teleflex the expertise required for combustion technology and this led to the development of MBU. So Teleflex also looks at platform products where possible in order to lower their costs and utilize the already available expertise.

Reasons for success in launching new products

There are several reasons for successful launches of Teleflex products. These are detailed below:

1. One of the major reasons for the successful product launches of Teleflex Canada is that they don’t just start building a product and say that the customers will come. They first try to sell their ideas and concepts to their consumers and when the consumer places the order then they start producing. This reduces their risk.
2. Another reason is the risk taking appetite of the company. For example, when the SeaStar product was being developed, the CEO was prepared to take certain amounts of risks. The project required substantial amounts of investment and he went ahead. This is also shows the sound decision making skills from the management.
3. Understanding the needs of their consumers. Teleflex Canada understands the needs of their consumers and puts in extra effort to make a product which is low maintenance. Their product sells because the end consumer wants it. This can be illustrated by the example of ProHeat, on page 7, under Pull-Through Strategy. An executive explains that the reason why OEMs put ProHeat in their trucks is because the end-consumer demands it.
4. As described under SeaStar Development on page 4, another reason for the successful launches of their products is that they continuously keep innovating. By the time their competitor launches a similar product, 6 months have passed and Teleflex Canada launches a new, improved product thus, remaining ahead of the competition. And since their products utilize economies of scale model, their products are cheaper than the competitor’s product.
5. The company promotes using the best and latest tools for production and development.
6. The company has a culture of admiration for innovative engineering talent. This is one of the reasons why the employees of Teleflex Canada are strongly motivated to excel in their field (Page 2, paragraph 2).
7. The company held interesting meetings between divisional and general managers. The meetings helped the managers to know where to go and who to call and the employees used to find an excuse to visit Teleflex offices.
8. Teleflex does not believe in re-inventing the wheel. This means that when a technology is available to be used, they do not waste precious time in developing that technology from scratch. This saves them considerable amount of time. Take for example their acquisition of a product line of Cummins Engine (Page 4, last paragraph). Teleflex knew that the Cummins product was not any good but still bought it because the product got them into the market and they thought that Teleflex could serve better with the new products. Similarly when they wanted to enter the US market, they bought a company in Ontario.

Threats to continued innovation and growth

The major threats to the continued innovation and growth at Teleflex Canada are:

1. Vertical Integration

Previously, whenever Teleflex Canada needed parts which were not built according to their specifications, they started developing the products themselves. Teleflex Canada didn’t need to develop these parts and they wasted a lot of their time and money on it.

Solution: Buy technology instead of developing it where possible and viable. The company has also divided their process under core and non-core processes. Now that this is done, the company can focus on the core processes and think about outsourcing the non-core processes to cheaper locations like China and India. This might result in substantial savings for the company.

2. Relationship with Teleflex Incorporated

It’s a generally accepted fact that the more a company centralises, the less innovative it will become. Given the fact that Teleflex Canada has been so successful in the past, corporate has been trying to centralize all the Teleflex subsidiaries into one so that Teleflex Canada’s innovative approach can be applied to the other subsidiaries as well. But then, the centralizing Teleflex Canada will mean losing innovation and defeating the whole purpose of the move.

Solution: Centres of Excellence are created in divisional units to maintain autonomy. A certain amount of centralization is important and a mix of centralization and a degree of autonomy will make sure that Teleflex Canada continues to innovate and grow.

3. Managing size

Teleflex Canada has grown at a very fast pace and getting too big can serve as a hindrance for the company. The company starts focussing on cutting costs rather than promoting innovation and entrepreneurialism. This may negate the company’s competitive advantage over its competitors. And in all this, the customer might be forgotten and the reaction time of the company will reduce.

Solution: It is of crux that the consumer gets quick and efficient service. The company should focus on assigning the best qualified people to the customer’s problem. And, solve the problems of the customers quickly and efficiently. Another important thing is that whenever a division becomes too big to handle, it must be sub-divided so as to maintain its reaction time and innovativeness.

4. Future of new product development

The case study explains that the biggest problem with new product development is that the existing products get replaced by the new technologies about which the company does not have the required expertise.

Solution: The solution for this problem is to help your customers sell their products to the end-consumers. Another thing that Teleflex Canada could do is to invest in forecasting. They need to know well in advance about any major changes that the industry may go through and will need time to prepare which forecasting can provide.

Can Teleflex Canada’s approach be implemented in other divisions or organizations?

I believe that Teleflex Canada’s approach to innovation can be implemented to other divisions or organizations. Their approach is too good to have and not implement in the other divisions. I can only imagine how much benefit it can bring to the company if implemented in all divisions and subsidiaries.

The company may function in a similar way by having a healthy mix of centralization and autonomy. This mix can not only enable the company to use the model created by Teleflex Canada in other divisions and subsidiaries, but can also help counter the negatives of growing too big too soon.

Although the company will need to take care of some things while incorporating the innovation approach of Teleflex Canada to the other divisions, the end result is too good to ignore. Some of the things to take care of are:

1. Be sure to maintain the culture of innovation from Teleflex Canada. The freedoms that the Teleflex Canada employees enjoyed played an important role in their thought process.
2. The support of the management is also a vital component in inheriting the Teleflex Canada’s approach. The management needs to keep promoting innovation like it does in Teleflex Canada and keep pushing to use latest and best tools available.
3. The combined company’s culture needs to be altered to support the new culture of Teleflex Canada. Without doing this, the combined entity may not be able to synergize.

If a division or group becomes too big, it must be sub-divided into sub-divisions so as to maintain the innovativeness and entrepreneurialism of the employees.