Electrolux Cleans Up

1. Chief Executive Hans Straberg had no choice but to do something radical he begin shutting down plants in Western Europe and the United States and shifting work to the lower cost locales in Asia and Eastern Europe. He is breaking down barriers between departments and forcing his engineers, designers and marketers to work together to come up with new products. To speed the transition, he recruited executives from companies with strong track records in innovation, including Proctor and Gamble and Pepsi Cola (Ivancevich). Instead of using focus group or surveys, they reconstructed their mode of thinking to be Groupthink, here where ideas could flourish and be bright and innovative (Ivancevich). I believe he changed things up because they just were not working the old way. The different departments had no idea of what the consumer was wanting or needed.
2. The advantage of working together gives the different department an earlier chance to see if the product will be successful. When you have the designers and the people on hand that is going to manufacture the product working as a team. You began to know the missing pieces to the puzzle. The new way saves time and money by avoiding the technical glitches that crop up as a new design moves from the drafting table to the factory floor (Ivancevich). If something needs to be adjusted it can be done before it leaves the floor. As a prototype you can see all the small errors and make accommodation for them. With the input from the staff being readily available for criticism and praise has proven to work out great for everyone. To support the innovation drive, Straberg has bumped up spending on R&D from .8% to 1.2% and aiming for 2% eventually. He is looking for products that consumers will pay a premium for with drop dead gorgeous looks and clever features that ordinary people can understand without having to pore through a thick users’ manual (Ivancevich).
3. Electrolux isn’t the only appliance maker on an innovation