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Research information

Innovation awards: a case study

Vincent Cousin, Corporate R&D Vice-president of GTM Group, discusses the development of an awardprogramme and management tool within a large, diverse, decentralized architectural and engineeringconstruction company. This award programme successfully encourages a wide range of employees tosuggest and implement innovation, captures the innovation and knowledge gained from project basedwork, disseminates the work within the large decentralized company for further exploitation, changes theculture and values of company and provides employees with a larger sense of participation andstakeholding.

Keywords: innovation, management tools, incentives, dissemination, employee participation, GTM Group

Introduction

One may question whether it is possible for abuilding and engineering construction companysuch as GTM Group (see Table 1) to boast of aninnovation policy when it works in such afragmented industrial environment. Yet GTMGroup’s record shows this is an entirely feasibleambition, as attested by its innovation awardscheme. The scheme is successful because it is�rmly rooted in a culture of innovation to keeppace with the most unexpected problems that ourclients manage to tax us with.

Past experience of GTM

GTM has abundant convincing examples thatinnovation cases are commercially relevant andcan boost pro�ts. If we look at the Group’sbusiness volume and trading results over the last10 years, it is found that:

· franchise business is the biggest contributor,

· road construction comes in second place,thanks to highly specialized products bindersand asphalts like Mobilplast, Etanplast, etc.,and

· third comes civil engineering construction inFrance, despite the downturn in the last twoyears.

At the root of the franchise business are two

major design-build-operate products, car parksand motorways. In these areas, GTM was themain instigator of a new legal, technical andcommercial framework. What was then the stillunnamed practice of concurrent engineering anddesign-and-build1 led to more economical projectswith shorter completion times �nely tailored toclients’ needs.

Progress in road construction arose out of a longterm R&D policy involving the formulation byEntreprise Jean Lefebvre of many successful newproducts offering unequalled performance, be-yond and in anticipation of what was demandedby clients and speci�cation writers. It is uni-versally recognized that French road builders areworld leaders in their own �eld, that the creationof Co�route (the sole French private BOTcompany for motorways franchise) was undoubt-edly an enormous contribution to this situation.

The success of the civil engineering branch is dueto its enthusiasm for constantly seeking oppor-tunities to improve methods, processes and’know-how’ which allowed it to weather variouscrises.

Lastly, one must not overlook the many one-offinnovations, each of which secured the Group’spro�ts for a few years:

· Environmentally -friendly alternatives, some-times well beyond current expectations, suchas the undergrounding of the A14 urban

0961–3218 # 1998 E & FN Spon

302 Bu i l d i n g Re s e a r c h & In f o r m a t i o n (1998) 26(4), 302–310

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motorway in the western suburb of Paris.

· Joint ownership, �rst used at mountainresorts.

· Formule 1 motel chain developed with theAccor corporation.

The Innovation Awards scheme

Room for improvement

It is well-known that the building and engineer-ing construction industry works on a small pro�tmargin and GTM is no exception, even if it doesdo better than its rivals in the long term. Theexamples given above show that innovations existalready and can contribute to increasing pro�t-ability. So innovation must be developed. Thatbeing said, policies like in other industriesinvolving centralization of decisions, large depart-ment of R&D, constitution of integrated teams ofresearchers etc. cannot be implemented. Thedif�culties speci�c to the AEC sector in develop-ing a policy of innovation should not be over-looked. Brie�y, one could summarize them intothe following:

Manufactured products are engineered structuresin which the following features are usuallyimportant:

· Durability. Buildings, bridges and the like arebuilt to last,

· Safety. Any �aw may lead to unacceptabledisaster.

· Impact on lifestyle. Any structure has consid-erable impact on the environment and livingconditions.

· One-off projects. One off site-speci�c develop-ments are the norm.

Timespan for designing and building a product ismeasured in years. It is not unusual for three to�ve years or even more to elapse from the �rstconceptual planning to start of construction!

None of the building and construction industry’sproducts are minor, standard items, and allinvolve signi�cant capital investment.

Together, the factors outlined above have led toan extreme degree of fragmentation of the market.2

Clients are almost never the ultimate users of thebuildings, structures or amenities ­ the public,tenant, owner are represented in the design,construction and acceptance process by some-body ­ the employer ­ whose job is to formulateactual needs and who is the formal client.

In such an environment, excessive centralizationor too much top down control, would failbecause it will not enable R&D personnel tohave their ears to the market.

Awards scheme

To the contrary and considering this entrenchedhabit of encouraging new ideas, at least in partsof the Group, it is not surprising that GTM shouldstart a regular award scheme for innovation.

Goals

The scheme has three goals, stimulate, report,disseminate. The innovation agenda within theGroup aims at fostering corporate intelligence.

· Encouragement , because innovation is impor-tant for staying ahead in a �ercely competi-tive sector without endlessly seeking im-provements in productivity. Innovation must

Table 1. GTM Group

GTM Group SA is a diversi�ed corporation operating in building and engineering construction in the very widest sense. It is amajor economic player (43 billion French francs turnover. 25% in road construction, 45% in building and civil, 20% in services toindustry and offshore, 10% in concessions) which focuses on innovation as the driving force behind growth and pro� tability.

Although having to work in a very much parcelled environment, demand driven, innovation is kept in the forefront of thecorporation’s concerns through the innovation award scheme described below. These regularly organized Innovation Awards arebuilt into a comprehensive management tool whose success is warranted because innovation is a true cultural value of thecompany. Quite naturally, such an innovation strategy is more successful when the industrial context accepts that calls for bidsare ’open’ that is to say that they do not � x means but only performances of functions to be rendered by the construction:alternatives in the bidding process must be the rule, not the exception! Examples of bene� ts to the company, measurable or not,are given and discussed.

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address the operational issues that arise inall disciplines in all the Group’s markets.Employees are encouraged to innovate on adaily basis.

· Reporting, because the fragmented markets inwhich we operate are substantially demand-led, which argues for a high degree ofoperational decentralization. Incidentally, thismakes it dif�cult to �nd out about andrecognize all innovations since most devolvefrom local or even personal initiatives. Theaward scheme is an ef�cient way of identify-ing, acknowledging and circulating informa-tion about innovations.

· Dissemination is important because, whileinnovation is laudable in itself, it is betterto capitalize whenever possible on existingideas than re-invent what has already beendone before. Once innovations are univer-sally known within the Group, individualscan re-apply them, with more or less sub-stantial modi�cations, to solve problems intheir own spheres of operations. This isimportant because we all work on construc-tion sites, and often use the same basictechniques.

Award procedure

Every two years, the holding company invitesemployees of the Group’s subsidiaries and part-ner companies to put forward ideas. The schemeis run jointly by the R&D and Communicationmanagements .

The scheme is open to all employees of theGroup. Applications are usually submitted byteams of managers, engineers, technicians orworkmen. Outsiders are also eligible if they havehelped GTM employees develop the innovation.

Applications are free in their format and lan-guage used, except in that they should include aone page synthesis. This synthesis appears to beextremely important as it is the sole documentwhich can be distributed to all jury membersduring the jury working session. However, andin order not to deter workers or technicians ofparticipating; hand written proposals, or withoutsummary, have always been accepted and someone in the jury or within one of the R&Ddepartments designated to complement the pro-posal.

All types of innovation or of innovative worksare acceptable for as long as they are not overtwo-years old measured since the innovation metits market or alternatively was mature enough sothat a ’prototype’ could be built or ’ launched’.

Applications are judged by a panel of 17 persons,some of whom come from outside GTM. Theyare selected for their relevant technical andoperational background in the various disci-plines. All major subsidiaries (building construc-tion, offshore, road construction, engineering,foundations, civil engineering, concessions, ser-vices to industry, electrical works etc.) arerepresented, as well as all individual skills andfunctions (account, �nance, control, commercial,technique, methods, design, data processing etc.).The jury is largely modi�ed for every newscheme.

The jury receive written assessments from threeto four people:

(a) ­ one technical advice (or two, dependingon the complexity of the subject) in orderto better assess the innovative content, andthe technique involved, one of which isgiven by one jury member (called therapporteur),

(b) ­ one hierarchical advice from the mana-ging director of the department or sub-sidiary to whom the team leader belongs,in order to assess the impact and estimatehow much the subsidiary relies on theproposed innovation,

(c) ­ one advice from the R&D responsible forsaid department or subsidiary, so that onecan estimate the possibilities of dissemina-tion and capitalization, as well as theindividual merit.

The criteria used in appreciating the proposals arethe following:

· Extent of the innovation or adaptation (arevolution, a rupture, or a normal activity, atransfer with adaptation or a simple copy)

· Personal merit (a bottom up approach, apersonal initiative, or a top down approach,an innovation ’on duty’)

· Impact on costs (but relative to the size ofthe operational or functional unit to whichthe team belongs)

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· Other impacts (mainly image, marketing orrelationship)

· Conduct of process (management of theinnovation process, industrial protection).

All these written assessments are used by therapporteur, the chairman of the jury and by theR&D vice-president to eliminate the less interest-ing proposals so that the jury session canconcentrate itself into reviewing the most inter-esting ones. The jury session lasts one full andlong day. All members listen to explanationsgiven by the rapporteur on each of the retainedproposals and give a note for each of them. Thenotes are collected and averaged so that it ispossible to decide on which of the proposalsdeserve a prize. A second round is then organizedwhereby the jury votes which of the decidedprizes should be promoted to the level of GrandPrix or of Special Category according to theoverall quality of the proposals.

Awards carry individual prizes from the holdingcompany of up to more than one month’s salary.The total allocation was one million Frenchfrancs in 1997, i.e. less than 1% of the totalR&D efforts of the company.

Dissemination

The awards are widely reported in Group andcompany newsletters, and the R&D departmentsof individual companies circulate further detailsof innovations in their own particular spheres ofinterest. This process does not only enhance theinnovation spirit, it also enables all responsiblepeople, project managers and engineers, R&Dspecialists , to know of all innovations, to under-stand the processes of innovation and the contentof them, to transpose them into their owncontexts, to copy wherever possible, or to adaptthem according to circumstances.

The corporate R&D management prints 5000copies of a book containing a users’ guide andsuccinct details of all noteworthy applications(not only award winners). Editing such a volumerequires extensive work of identifying which ofthe proposals deserve publishing, summarizingsaid proposals into a comprehensive one pageonly description. A somewhat standard presenta-tion has been used: the context where theinnovation has taken ground is explained, thecontent of the innovation is brie�y clari�ed, oftenwith pictures or schematics, and �nally the

impacts and interests exhibited by the innovationare listed. The level of information and detail issuch as to enable the readers to understand whatit is about, but not to copy it (except of coursefor simple cases). Names and co-ordinates of theteam are given in the description so that contactsmay be taken for further transfer or reuse. Thisbook is widely distributed throughout the Group,and also is used externally as promotionalmaterial for the Group’s image and marketing.The subjects are assembled by various topicswhich are then introduced by employees fromthe group who are leaders in their technical �eldand who can therein present what �nally con-stitute the latest thinking of the Group. Thestrategy in innovation is thus explained andcommunicated widely to all staff and personnelin a process of direct communication from thecorporate levels to the smallest operational level.

Examples and results

Examples

Two examples only are presented hereby: one,Smart Leg, to illustrate the process of capitalizationand of technological transfer, and a second one,Evaluation of tenants satisfaction during rehabilita-tion, to illustrate the marketing aspect of thebuilding industry and its dif�culties.

Smart leg

ETPM is the company of the group active in theoffshore industry: sealines laying and offshorestructures construction and lifting. It owns layand lift barges but its lifting capacity is limited toabout 2000 tons. The market has evolved in therecent years into decks prefabricated in units ofup to 5000 to 10 000 tons i.e. beyond the liftingcapacity of ETPMs barges. It was a strategicnecessity for ETPM to �nd a solution and stay inbusiness. Acquiring a new derrick barge wouldhave meant a huge investment dif�cult to recover.It was therefore decided to develop a new methodfor lifting and placing into position large loads inthe prevailing environmental conditions of theGulf of Guinea: long swells.

The construction methods of�ce of ETPM in-vented two systems called Smart Leg and SmartFin, since then patented, whereby a pontoon,loaded with the deck, comes inside the legs ofthe jacket and transfer the deck load to the jacket

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thanks to a set of controlled check valves whichare closed when the speed of the deck and of thepontoon, due to the action of the swells (eithervertically in case of Smart Leg, or horizontally incase of Smart Fin) becomes null. Pontoon anddeck are then disconnected: the deck remains ontop of the jacket and the pontoon is pulled outfrom within the jacket legs (see Fig. 1).

Designed originally in 1994, the system was�nally implemented in May 1997 in Africa forMOBIL Ekpe �eld development with full successand to the complete satisfaction of the client whodeclared: ’this successful installation will nowbecome an industry benchmark’. Smart Leg wasawarded an Innovation award by the Norwe-gians in 1995, and was also one of the three’Grand prix’ of GTM Group innovation scheme.The long time from conception to market was theresult of both a signi�cant innovation, and of thenecessary modi�cations of the jacket structure tolet the pontoon come within the jacket legs.

During the process of the 95 innovation schemethis innovation became known, and could bestudied by other experts in the group. At thesame time, other teams were working insideDUMEZ-GTM, the bridge construction companyof the group, for the Confederation bridgelinking Prince Edward Island and mainland inCanada. These teams had to solve the problem oflifting 250 m long concrete spans weighing7000 tons with a �oating gantry crane. The mainpoint was to transfer the load evenly withdif�cult sea conditions. Although there was largelifting equipment available it was found ofbene�t to use also the same idea of Smart Legto control the energy transfer. In 1995, another

version of Smart Leg, adapted to smaller loadsand to working as a damping apparatus for acrane, was quickly developed. It was put intooperation during summer 1995 and by the end of1996 it had successfully managed to place intoposition over 40 spans of 7000 tonnes to completethe 13 km link (see Fig. 2).

An innovation by necessity decided by themanagement for strategical reasons in a particu-lar segment of the group’s market (the offshoreindustry), has therefore become, in a short time,an innovation by ’good luck’ and ’opportunity’ ina completely different segment of the group’smarket (bridge construction) thanks to an inno-vation award scheme which is in fact a trueprocess of knowledge management.

Evaluation of tenants’ satisfaction duringrehabilitation

Rehabilitation of dwellings is one of the fewactivities in the building industry which is under-going development at a time when new buildingconstruction is in recession. The technologicalaspect of this activity is not as important as thefact that contractor personnel are in permanentcontact with the tenants living in the �ats duringrehabilitation. The contractor is in direct contactwith the �nal client, much more then with his’formal’ client, the employer or the owner of thedwellings.

An R&D programme has therefore been under-taken to assess the satisfaction of tenants duringthese works with the participation of sociologistsfrom public R&D institutions. The departmentsof the group performing rehabilitation worksnow have in hand a powerful tool to assess

Fig. 1 Reduced scale model of Smart Leg.Fig. 2 Heavy lift � oating crane installing completespan. Smart Leg devices are on top of the pile.

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clients’ satisfaction and to show to new ownersand market prospects that we have the know-ledge and will to care for the satisfaction of theinhabitants. This ’marketing’ approach is espe-cially interesting in the building industry wherethe ’�nal’ client (the people to live or use thebuilding) is not present until the building ishanded over, and his demands not often prop-erly represented by the Employer. To caricaturethings, one could say that the building industryis an industry where the marketing function doesnot exist. Indeed, we experience dif�culties indeveloping the use of the R&D results, as the’Employer’ may sometimes feel short-circuited inthe management of the liaison contractor-�nalclient.

Results

The �rst time the scheme was implemented in1994­ 5, there were 121 applications. The numberof proposals received was beyond expectations.Categories used for classi�cation during this �rstevent were made according to the individualdisciplines: one for design, one for site oper-ations and methods, one for administration. Thenumber of proposals received, the fact that amajor civil engineering site submitted just under10 proposals led the jury to innovate:

(a) ­ set aside the proposals originating fromthis large site and introduce a special prize­ Large Site Grand Prix ­ for all candi-dates of this site. It would otherwise havelimited the access of Grand Prix for less’spectacular’ proposals,

(b) ­ declare three Prix as Grand Prix

(c) ­ introduce thematic prices to highlightimportant themes like safety or conspic-uous, out of fashion, peculiar proposals.

Indeed, it was felt important not to be too elitistso that workers and technicians are also promotedand continue to participate.

Out of the 121 proposals 98 were consideredworthy of immediate circulation for applicationwithin the Group. It is instructive to classifythem according to type3 rather than on technicalcriteria only. Tables 2 and 3 show the break-down. Table 3 gives the data for 215 ideas out ofthe second Awards and published in 1997.

In the second session, 265 proposals were

received. A large increase in proposals wasexpected of course but not to that extent. Butthe ’internal benchmarking effect’ had played avery important role and the various subsidiarieshad had the opportunity to rate themselves asregards being innovative or not by variousstatistics that had been circulated such as numberof proposals per 1000 staff, number of prizesreceived, amounts of �nancial awards received,number of citations in the Group’s magazine etc.Even the best runners had done better, as theywere afraid others could overtake them.

Table 3 classi�es the 215 ideas which have beenpublished in the book of 1997. During theprocess of the 1995 ideas dissemination and bookpreparation, it became rather obvious that thescheme was a large success of motivation and ofidenti�cation of all staff of the group irrespectiveof origin, subsidiary and individual skill. It couldalso be seen that marketing, product or servicesvoluntary offers onto the market were possiblestrategies not only in road construction (seeabove Past experience of GTM.). It could alsobe experienced that, although contexts of activ-ities are at �rst stake different, they are not infact, at least not to the point that ideas cannot bereused and adapted. The Innovation AwardScheme appeared therefore as a powerful man-agement tool at the disposal of the corporatelevel to promote certain types of innovation, toencourage further copying or transfer of ideas, toestablish a common language on innovation, tocapitalize not just on innovations, but also onstrategy of innovation.

For all these reasons, the second call forproposals established a new categorization: a�rst differentiation was made according to thetype of innovation, a second according to thecharacter of innovation or of adaptation. Hencefour categories were introduced: innovation ofproducts or services; adaptation of products orservices; innovation of methods; adaptation ofmethods.

Two noteworthy trends emerge in the innovationprocess. First, there is a growing involvementwith rami�cations in all the Group’s businesssectors, even if some differences persist. Therewere 121 proposals for the award in 1995 and265 in 1997.

Secondly, three-quarters of the applications con-

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cern methods, which still leaves one-quarter forproducts. There is a move to capitalize on whatexists or is known, since one-quarter of theapplications concern adaptations of already fa-miliar earlier innovations from outside or withinthe Group.

This transferability aspect is particularly impor-tant. The Group’s stock of innovations is thecapital on which its long term pro�tability isbuilt. When looking at the development of newideas over a number of years, one �nds manyexamples of cross-fertilization. This is especiallytrue in the subsidiaries which have organizedthemselves with enough �exibility to exploit thiscapital. One innovation leads to another, either intechniques or service rendered. The interactionsbetween different ideas or techniques in theinnovation process is fertile ground on which to

build. In this way, the apparently chaotic growthof this stock of innovations becomes meaningful.

From another point of view, innovation is thebasic universal element constitutive of theGroup’s identi�cation. This is true internallyand clearly innovation is a shared and commonvalue for all segments of the Group. It isbecoming also true externally, and this is new.All staff with responsibilities towards theGroup’s environment (clients, politicians, munici-palities, central administration, R&D institutions,partners etc.) are demanding that the innovationbook be used as material for promoting thecompany and its know-how, for image buildingand for commercial development. In view of thisevolution, the 97 book has received a refurbishedlook, with a more aggressive title ’To conquernew markets!’ .

Table 2. Breakdown of 98 ideas reported in 1995 by business branch(a) Products and services

Maturity Emerging technique Standard technique Total

Degree ofinnovation

Radically new productor service

Improved productor service

Radically new productor service

Scope of innovation Reproducible Unique Reproducible

Buildings 4 5 9Foundations 1 1Roads 2 2Industrial 1 1 2Electricity 2 2Offshore 1 1EngineeringFranchise 1 1TOTAL 3 7 8 18

(b) Methods

Maturity Emerging technique Standard technique Total

Degree of innovation Radically new method Improved method Radically new method

Scope of innovation Transferable Local Transferable Transferable

Buildings 15 46 1 62Foundations 1 1Roads 1 1Industrial 3 3Electricity 2 2 4Offshore 1 3 1 5Engineering 3 1 4Franchise 1 1TOTAL 1 20 57 3 81

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Conclusion

The most obvious incentive towards successfulinnovation is a vigorous and healthy corporateculture.4 Management must nurture this cultureso that it lives and grows. Stale habits must befought with new ideas. It is by remainingreceptive to change that modern managementjusti�es its leadership. Management must alsocapitalize on and exploit innovations. In thisenvironment, innovators can seize opportunities,experiment and persevere until their ideas ma-ture.

Despite the unfavourable economic climate andgeneral organization of the sector, new productsare the surest means of achieving expansion andconsumption growth. This needs somewhat dif-

ferent circumstances from what is commonlyfound in the construction industry, for instanceit needs clients and partners ready to ask ’open’questions (for example, performance-based con-tracts or simpli�ed legal relationships as inclient­ supplier type contracts that encourage apartnership approach), and contractors ready toanswer them because they master both thedesign and construction tasks. It is in this waythat a building and engineering constructioncompany can set up a true strategy of offeringslike any other industrial business. In our experi-ence, it is only in such circumstances thatinnovation is possible and leads to businesssuccess that bene�ts the whole economy. GTMis an enterprise that believes in the virtues ofinnovation, the outcome of a healthy corporateculture combined with a relevant R&D agenda.

Table 3. Breakdown of 215 ideas reported in 1997 by business branch(a) Products and services

Maturity Emerging technique Standard technique Total

Degree of innovation Radically new productor service

Improved productor service

Radically new productor service

Scope of innovation Reproducible Unique Reproducible Reproducible

Buildings 1 4 16 1 22Foundations 1 2 3Roads 1 1 8 3 13Industrial 4 2 6Electricity 1 1 2Offshore 1 1Engineering 4 5 9Franchise 3 3TOTAL 2 13 33 11 59

(b) Methods

Maturity Standard technique Total

Degree of innovation Improved method Radically new method

Scope of innovation Local Transferable Local Transferable

Buildings 33 81 1 1 116Foundations 2 8 1 11Roads 5 5Industrial 1 9 10Electricity 3 3 6Offshore 1 1Engineering 2 2 4Franchise 3 3TOTAL 41 112 1 2 156

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These are the conditions for ensuring the growthof capability and pro�tability against the back-ground of change in the way this business sectoris organized.

Endnotes

1 See excellent work by GREMAP under Chris-tophe Midler, Project Organisation: Re�ec-tions on Concurrent Engineering (in French)published in Le Moniteur, 15 November 1996.

2 For a detailed analysis of this aspect of thebuilding industry, see Ef�ciency and Inef�-ciency in the Organisation of the BuildingIndustry (in French) by Eric Brousseau andAlain Rallet in Revue d’Economie Industrielle,No. 74, 4th quarter, 1996, reprinted asGrowth: Economic Performance of CompanyNetworks; Case of the Building Industry, inRepeÁ res Prospectifs de la Mission Prospective de

la DAEI, No. 38, October 1996.

3 A distinction is made between (i) innova-tions that are ’visible’ to the client, i.e. thosethat alter the product built or delivered orthe service rendered, which are product orservice innovations, and (ii) innovations thatare ’invisible’ to the client, which do notalter the product, i.e. those concerningconstruction plant and equipment, methodsdirectly or indirectly involved in construct-ing the product, and organization, collec-tively known as methods. Innovation mayconcern emerging or new practices. In bothcases, it may stimulate profound changes inthe market, service rendered and/or meth-ods. Since the civil engineering marketusually involves ’one-off’ structures, a dis-tinction has also been made between innova-tions that are strictly ’local’ , e.g. analternative project design, and those thatare ’transferable’ to other locations.

4 See articles by B. Baudelet in Les Echos, 10­11 January, 16 April and 16 September 1996.

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