MGMT 5663 Module 4 Innovation Analysis Example

A Change in the Mix That Changes the Plant: Classifying a Low-Carbon Concrete Innovation and What a Precast Producer Must Rebuild to Absorb It

Student Name

American College of Education

MGMT5663: Innovation and Strategic Management

Module 4 Assignment

Instructor Name

May 22, 2028

The Innovation

Module 3 recommended that the composite precast firm Tallis specialize in engineered culverts and bridge sections and defer a full low-carbon mix redesign until its requirements were understood. This paper examines that redesign. Tallis's engineered products currently use a mix whose cementitious content is almost entirely portland cement. The proposal would replace about 40 percent of that cement with slag cement, a byproduct of iron production, cutting the embodied carbon of the concrete by roughly a third and reducing Tallis's purchases from the cement suppliers whose power Module 1 identified.

Seen from the batch plant, the change is small: one silo, a revised mix proportion and a new line on the supply contract. Seen from the rest of the business, it is not. Slag mixes gain strength more slowly in the first hours after casting, particularly in cold weather, and the whole of Tallis's production system is built around a section reaching stripping strength by the next morning. The ingredient is the smallest part of this innovation; the schedule, the approvals and the sales conversation are the larger part.

What Kind of Innovation This Is

Henderson and Clark (1990) classified innovations by two dimensions: whether they change the core design concepts of a product's components and whether they change the linkages between components. Incremental innovation changes neither; modular innovation changes a core concept but leaves the linkages alone; architectural innovation reconfigures the linkages while leaving the components largely intact; and radical innovation changes both. Their central argument was that established firms often fail at architectural innovation not because it is technically difficult but because their knowledge of how components fit together is built into their communication channels, routines and filters, and so the change is not recognized for what it is.

Their evidence came from the photolithographic alignment equipment used to make semiconductors, where each new generation of equipment was led by a different firm even though the underlying optics changed little. The incumbents understood each component well; what they missed was how a change in one altered what the others had to do. A precast producer is a far simpler system, but the mechanism is the same, and the knowledge most at risk is the kind nobody writes down.

The low-carbon mix at first appears modular, a new core concept in one component. The reinforcing steel, forms, cranes and products stay the same. But the change in early strength alters the links between the mix and the casting cycle, between the casting cycle and winter capacity, between the mix and the approvals on which the design library depends, and between the product and the buyer who values it. The components are largely unchanged; the relationships among them are what move. That makes it architectural, and it is exactly the kind of change Henderson and Clark warned an experienced firm would underestimate.

Competence Enhancing or Competence Destroying?

Tushman and Anderson (1986) distinguished innovations that build on a firm's existing know-how from those that make it obsolete, and found that competence-destroying changes tended to be introduced by new entrants while competence-enhancing ones were usually introduced by incumbents. The mix redesign is mixed on this score. It enhances the competence of Tallis's engineers, who already design for load, durability and fill height and would add mix performance to the same calculations. It partly destroys the production scheduling knowledge held by the plant superintendents, whose sense of when a section can be stripped rests on decades of portland cement behavior. The firm should expect enthusiasm from engineering and resistance from production, and it should read the resistance as a sign of real knowledge at risk rather than as reluctance to change.

What Tallis Must Change

Four changes follow from the linkages the innovation disturbs. The first is curing. To keep a daily casting cycle with a slower mix, Tallis would need heated curing enclosures over its engineered casting beds, about $1.1 million across both plants, and maturity sensors cast into sections so that stripping is decided by measured strength rather than by the clock. The added energy would cost roughly as much as the mix saves on material in winter and less the rest of the year.

The second change concerns approvals, and it is the most important. Because most of the 1,400 approved designs name the concrete they were reviewed with, reapproving them one at a time would take years. Tallis should instead ask the state transportation department and its two largest county customers to approve the new mix at the materials level, on test results, so that existing designs can use it without individual review. The third is quality control: the laboratory would need to test more cylinders at early ages and track strength gain by season until the data support the schedule. The fourth is sales. Low-carbon concrete is valued by a different person than the county engineer who values fast installation, often an owner's sustainability or capital planning office, and Tallis's engineers would need to learn to present environmental product declarations as well as shop drawings.

Why the Current Customers Will Not Pull This Forward

Christensen and Bower (1996) found that established firms tend to allocate resources to what their current customers ask for, and so underinvest in changes those customers do not yet demand. Tallis's county engineers do not ask for low-carbon concrete; they ask for speed and reliability, and the mix redesign threatens speed in winter. Left to the normal budgeting process, which rewards projects with a customer attached, the redesign would lose to a fourth crane crew every time. The firm should therefore give the pilot its own small budget and a cross-functional team from engineering, production, quality control and sales, reporting to the owner rather than competing inside the plant budget.

What Could Go Wrong

Before the pilot starts, three risks need watching. The first is winter. If heated enclosures cannot hold the daily cycle in January, engineered output could fall by a fifth in the months when Tallis already carries idle beds, and the specialization strategy from Module 3 depends on that capacity. The second is supply. Slag cement in this region arrives by rail from a small number of sources, and a supply interruption would force a return to the old mix, which the materials-level approval must therefore allow without new paperwork. The third is credibility. A section that cracks or fails a strength test during the pilot would be remembered by county reviewers far longer than a year of good results, so the pilot should begin on products where a rejected section can be recast within days rather than on a crossing whose road is closed until the section arrives.

A Staged Pilot

The pilot should run for twelve months on three product families that carry the least approval risk: three-sided bridge sections for one county, utility vaults for one utility and a single culvert size range at the Iowa plant. It should report monthly on early strength, stripping delays, energy use, rejected sections and the time taken to win the materials-level approval. If the approval is granted and stripping delays stay below one day in ten, the mix should extend to all engineered products in the following season. If the approval stalls, Tallis should keep the new mix on the products that do not depend on the library and wait, because protecting the design library matters more than moving first.

References

Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17(3), 197-218. https://doi.org/10.1002/(sici)1097-0266(199603)17:3<197::aid-smj804>3.0.co;2-u

Henderson, R. M., & Clark, K. B. (1990). Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35(1), 9-30. https://doi.org/10.2307/2393549

Tushman, M. L., & Anderson, P. (1986). Technological discontinuities and organizational environments. Administrative Science Quarterly, 31(3), 439-465. https://doi.org/10.2307/2392832