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Solution Manual for Managing

Innovation: Integrating Technological


Market and Organizational Change, 6th
Edition, Joe Tidd John Bessant
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about creating products that are “new,” but it is not enough; in business an innovation needs to
create a value for the customer to avoid being just an invention – whether simple or difficult it
may be. To understand the issue of creating a value for the customer we look at Kodak starting-up
and see the way Kodak cared for different customers who valued the value of their innovation…

…Back to the beginning of the 20th century, Kodak was the ‘Google’ of its day, creating an entirely
new set of businesses that achieved stellar growth: photography for the masses, motion picture,
and even the first X-ray film receiver. Kodak was a vertically integrated company and produced
lots internally. Kodak was a world into itself: cows (for gelatin); forests (for chemicals); savings &
*
Source: Peter Drucker (1954) “The Practice of Management “, New York: Harper & Brothers.

2
loan (for employees); fire department (for safety); and even its own definition of ‘time’ (for
convenience). A few examples shown below are to illustrate how far the vertical integration inside
Kodak went. These examples of Old Kodak are essential to explain many of the challenges that
New Kodak faced later on. These examples are also to oppose a widely-spread misled view that
Kodak simply “resisted the rise of digital technology”, which was not really the case although one
might read it elsewhere. Now you will get to know why we started with Yogi Berra’s saying,
“You’ve got to be very careful if you don’t know where you’re going, because you might not get
there.”

Eastman Gelatin
At the end of 1881, customers complained about fogged and darkened plates. The gelatin supplier
had changed its source. The original cows grazed on sulfur-rich mustard. The later cows were
lacking sulfur in their diet. So in a typically vertically
integrated company, Kodak had to bring own herds of
cattle to make sure the animals eat the right grass
and thus ensure the consistency of photography. At
the end of December 2011, Eastman Kodak Company
announced that it has agreed to sell its Eastman
Gelatine Corporation business to Rousselot, part of
the Eindhoven, Netherlands-based Vion Food Group.
The decision was consistent with Kodak’s previously
announced intention to sell non-core assets to
sharpen the Company’s focus on its digital growth
Photo: Kodak of 19th century
initiatives thus accelerate Kodak’s transformation to a
digital company. Within Kodak, Eastman Gelatin has
been successfully managing the transition of the photographic market by increasingly expanding
its sales into non-photographic categories, such as the pharmaceutical, edible protein and
food/confectionary categories. Rousselot is positioned to help Eastman Gelatine continue the
recent growth in its sales outside the photographic industry towards growing pharmaceutical
markets.

Tennessee Eastman Corporation (now Eastman Chemical)


World War I disrupted the German supply of photographic paper, optical glass, gelatin, and many
chemicals, including methanol, acetic acid and acetone. At the end of the war in 1918, Eastman
Kodak founder, George Eastman, was determined to have an independent supply of chemicals for
the photographic processes. Thus, Kodak bought the facilities to make its own supply including
Appalachian forests which provided raw materials to make methanol and acetone and to have an
independent supply of chemicals for the photographic processes. From its beginning more than 90
years ago, Eastman has grown to be a leader in the global chemical industry.

Eastman Savings & Loan


3
Eastman wanted to provide the employees with an institution that served essential financial
needs, especially for mortgages. On February 1, 1996, Eastman Savings and Loan changed its
charter and became ESL Federal Credit Union. Today, ESL offers members much more than just
mortgages and is one of the largest and strongest credit unions in the country. It is the largest,
locally owned financial institution in the Greater Rochester area and the largest credit union in
New York State. ESL is in the top 1% of national credit unions ranked by assets. Since 1920 when
George Eastman founded it, ESL Federal Credit Union turned into a full-service financial institution
with $4.3 billion in assets. ESL employs more than 640 people locally and about 310,000 members
world-wide. The company was twice recognized as one of the Best Small and Medium Workplaces
in America by the Great Place to Work® Institute and presented by Entrepreneur®. Access to the
credit union includes 19 branch locations and more than 40 ATM locations, a Contact Center, and
Internet, online and mobile banking channels†.

…and even the Fire Department


Eastman Kodak Company's Kodak Park plant includes 121 major manufacturing buildings, nearly
30 miles of roads, 22 miles of fence line, two power plants, its own sewer system, water treatment
facility and even the fire department. Since 1897, the Kodak Fire Department has maintained a 24
hour presence at Eastman Business Park and responds to all sorts of emergency calls such as fires,
chemical spills, odors, elevator rescues and emergency medical service‡.

Cotsworth Calendar
The International Fixed calendar is a solar calendar that provides for a year of 13 months of 28
days each, with one or two days a year belonging to no month or week [(13 x 28) = 364]. It is
therefore a perennial calendar, with every date fixed always on the same weekday. Though it was
never officially adopted in any country, it was the official calendar of the Eastman Kodak Company
from 1928 to 1989 because it fitted beautifully with the manufacturing schedule. The 13-month
calendar (also known as the Cotsworth plan, the Eastman plan, or the Equal Month calendar) was
in use at Kodak until 1989 for pay and reimbursement schedules.

Kodak Technological Advancements

In 1912 George Eastman hired Dr. C.E. Kenneth Mees, a British scientist to organize and head a
research laboratory in Rochester, one of the first industrial research centers in the U.S. It was the
time when Kodak Research was founded. Kodak became one of the pioneers of industrial research
with General Electric and AT&T. To provide just a few examples of Kodak contemporary technical
innovation we name: electrophotography (1975), digital camera (1976), OLED* 1987, inkjet printer
2007, APEX 2008, stream technology 2009.


http://en.wikipedia.org/wiki/ESL_Federal_Credit_Union accessed February 2013.

*
An OLED (organic light-emitting diode) is a light-emitting diode (LED) OLEDs are used to create digital displays in devices such as
television screens, computer monitors, portable systems such as mobile phones, handheld games consoles and personal digital
assistants (PDA). Efficient OLEDs using small molecules were first developed by Dr. by Ching W. Tang and Steven Van Slyke in 1987
at Eastman Kodak. The term OLED traditionally refers specifically to this type of device, though the term SM-OLED is also in use.
Accessed from http://en.wikipedia.org/wiki/OLED (January 2013).
4
Electrophotography 1975 OLED 1987
Digital camera 1976

Stream Technology 2009


Inkjet printer 2007
APEX 2008

It all started….in 1878 when George Eastman for the first time demonstrated to the world the
great convenience of gelatin dry plates over the cumbersome and messy wet plate photography
prevalent in his day. Dry plates could be exposed and developed at the photographer's
convenience; while wet plates had to be coated, exposed at once, and developed while still wet.
Already in 1879 Eastman invented an emulsion-coating machine which enabled him to mass-
produce photographic dry plates. A year later, Eastman began the first commercial production of
dry plates in a rented loft of a building in Rochester, New
York. In January 1881, Eastman and Henry A. Strong (a family
friend and buggy-whip manufacturer) formed a partnership
known as the Eastman Dry Plate Company. In September,
Eastman quit his job as a bank clerk to devote his full time to
the business, including the problem of the yet-to-come gelatin
problem that we have started with.

Cohesion of the new Kodak with the new

Since 1890s most of the Kodak technologies were about fine


coating onto materials raising an IP portfolio of 12.000
patents in imaging. Kodak is making one patent for one
million US dollars spend in R&D and today IP portfolio makes
the living for the company. In memories, many people have
the vision of the red and yellow colors and the idea of an old filming company. In 2006 Kodak lost
the yellow box in the brand logo, simplifying the image and also moving towards a rounded type
5
font of "a" to give the name a more contemporary look§. The Kodak of today is a new milestone
marking a new chapter in Company’s history transforming from b2c to a b2b digital manufacture
involved into printing and commercial imaging. Thanks to wide IP portfolio, Kodak of today
exploits competitive advantage at the intersection of materials science and digital imaging science,
utilizing its history in deposition technologies to transform large markets. If someone might still
think of Kodak as the b2c application, caring an image of an old filming brand that prints photos,
having a “problem” – it is no longer the case. The company has shifted from 1878 technology of
putting 14 macroscopic layers of chemistry with great accuracy deposited to a paper in the dark to
a new 2000s technology which is based on dropping the image on the paper. Kodak technology
has moved from the coating film to a newly invented technology of billions drops applied in one
second to the paper using air deflection. With the new patented technology Kodak can print a
bible within 4.2 seconds like no one else. As ever Kodak is the ‘Google’ of the time. Back to 19th
century Kodak was revolutionizing the photography now Kodak is discontinuing printing.

The interface, or innovation from the unexpected

Our story has started with a collision of the old Kodak with the new one. In particular, we wanted
you to imagine how coating film might require depositing
microscopic layers of chemistry with great accuracy onto an
acetate film at high speed, 14 times, in the dark. As part of this
innovation journey, Kodak invented a unique technology and
patented a nozzle array technique that uses air deflection to
deposit just the molecules
needed onto the film at a rate
of a few billion drops per
second. So, the technology
worked really well…and not
only as an invention.
Thus one day, typically for an innovation being a result of
serendipity, in a classic skunk works project, a small engineering
team worked out that if the array could be modulated, it could
print patterns of uniform drops at a speed 10 x faster than any
other existing technology in the world. This exactly how the Stream
Inkjet writing system was born. To explain more of technicalities, in the
Film Coating System, a steady stream of fluid is formed under pressure
from an array of uniform jetting nozzles. Individual streams are
stimulated by thermal energy to break each stream into individual
droplets. The droplets are directed to the media with great accuracy or
to a recirculation catcher as determined by the input data stream.
Modulating the stream, Kodak created a Novel print head which:
• Offsets class productivity, reliability, cost, and quality;
• Supports a range of papers and substrates;
• produces up to 3,000 ft per minute;
• makes 5.1 Billion ink drops per second;

§
http://www.kodak.com/ek/US/en/Our_Company/History_of_Kodak/Evolution_of_our_brand_logo.htm Accessed
February 2013
6
• introduces a technology so fast that it can print as many pages as in a standard Bible in 4.2
seconds.
In the words of Henry Freedman, Technology Watch Editor and a third-generation printer, the
pigments in Kodak Inks “range from 10 to 60 nm mean particle size, meaning that the pigments
are much smaller than the wavelength of visible light, greatly reducing scatter, resulting in
brighter, cleaner colors”. Technology Watch has published more than 400 scientific and technical
articles about printing, publishing and the information industry over more than 35 years. It has
become one of the leading technical sources on the future of technologies in printing and
publishing… they “found Kodak’s color gamut is superior to offset”**.

Just for a bit of curiosity, we look back at the history of the first printed bible. We believe it is
important to mention the history of the Gutenberg Bible and pause Kodak story-telling by
referring to Johann Gutenberg who in 1454 or 1455 discontinued books either ‘copied by hand’ or
‘printed from engraved wooden blocks’—processes that could take months or years to complete.
Johann Gutenberg invented a mechanical way of making books, a printing press that made it
possible to produce many copies of a work in a relatively short amount of time. The process soon
spread throughout Germany and from there to Italy, France, and the rest of Europe. By the end of
the fifteenth century, hundreds of book titles were being produced each year on wooden hand
presses like Gutenberg's††. “The printer first cut a block of hard wood the size of the page that he
was going to print. Then he cut out every word of the written page upon the smooth face of his
block. The letters were inked, paper was laid upon them and pressed down.
With blocks the printer could make copies of a book a great deal faster than a
man could write them by hand. But the making of the blocks took a long time,
and each block would print only one page”‡‡. Like in the Gutenberg time, the
stream technology is a true game changer. It enables high speed printing at
offset printing quality but with a new and unique advantage – every page can
be different. Let’s say you’re producing high volume direct mail
solicitations. By adding a Stream Print head, one will be able to
produce more creative mail pieces with lower cost of operation
compared to any other variable data option at the offset level.
“Stream Technology will bring some exciting changes to the
industry and this technology demonstration will be an impressive
display of its offset class capabilities,” says Ronen Cohen, Vice
President of Marketing, Kodak Inkjet Printing Solutions. “Stream
Technology provides a number of flexible features to meet the
needs of commercial printers for applications like direct mail, catalogs, and free standing inserts.
Stream Technology is one of the foundations that will solidify Kodak’s leadership in inkjet
innovations. The feedback from the demonstrations in Dayton has been fantastic” §§.

More of the technological innovation

The technology works like a dripping tap in a crosswind! Drops created by tension fall from the
nozzle and are deflected by airflow. If the drop is one that is needed for printing, the frequency is
adjusted to make the drop larger, which are less affected by the airflow and fall onto the page. The

**
Source: http://graphics.kodak.com/us/en/about_gcg/news/2012/121009b.htm accessed March 2013.
††
Source: http://www.hrc.utexas.edu/exhibitions/permanent/gutenbergbible/history/#top accessed March 2013.
‡‡
Source: http://www.gutenberg-bible.com/history.html accessed March 2013.
§§
Source: http://www.wideformatonline.com/index.php/home/841-kodak-moves-to-introduce-high-speed-inkjet-to-
commercial-printers accessed March 2013.
7
smaller, non-printing drops with less mass are deflected into a recirculation unit for reuse. In a
technical nut-shell:
• Drops created by fluid surface tension much like water dripping out of a faucet;
• Controlled pressure and high-frequency vibration create uniform size and spaced drops;
• Airflow used to select drops;
• Non-print drops are blown to a “catcher,” and recirculated in the ink system;
• Print drops travel in an undeflected path to the media.

Now, let’s see how the invention is becoming innovation, or how the technology adds value to the
customer, addressing met, or in our case unmet needs.

Creating the value…or invention developing into innovation…


To begin with, let’s understand what are the needs of the commercial printing? They can be: cost,
quality, speed and substrate choice. In other words, the traditional vectors of a need for an offset
printing technology are simply a high speed, offering
high quality, with the ability to print on a range of
substrates, at low cost. Stream is the first digital printing
technology to map to all four vectors in a competitive
manner to traditional offset printing – but offers that
fifth benefit of enabling every page to be unique. This
industry is faced with a challenge as certain printing
applications are in decline (e.g., newspapers). The core
activity, offset printing, is highly competitive and
requires fairly long runs to cover the fixed set-up cost.
Stream enables shorter runs to still be produced
effectively. The next question to answer is how did Kodak commercialise its new technological
solution? Having in a puzzle, on one hand, continues inkjet printing, on the other, discontinuous
stream printhead, with in between unmet and unknown media and inks.

To come up with a product, Kodak had to pull together 3 disciplines: (i) Stream printhead; (ii) the
paper transport and ink recirculating systems from Versamark, a company purchased in 2003; and
(iii) inks & media draw on Kodak’s long history in chemicals and imaging (the micromilling process
used to produce the pigmented inks came out of Kodak’s work on film dyes and emulsions). Kodak
innovated in ink design, too: creating very small (nanoscale) pigment particles with a uniform
particle size. This is achieved using a micromilling process that was developed back in the film days,
linked to the creation of small particle silver halide crystals. Ink in the system needs to be as mobile
as possible and once it hits the page it needs to become as permanent as possible, thus, for the
technological point of view it is important formulating the inks so that they will provide the best
performance.
In doing so, the following results are achieved. Printing has equal or better quality with less ink
with lower cost of operation. The equipment has less wear and tear on inkjet nozzle. The end
product has less scattering of light, more color and vibrancy. Offset quality has enhanced optical
density and blackness. For coated glossy papers the permanence of the final results are in fast
water and light. For a user, the new approach is easy to integrate on-line with analog printing
presses in hybrid environments.

8
What’s now, or unmet customers’ needs

We started our story with the statement that “innovation is about creating products that are “new,”
but it is not enough; in business an innovation needs to create a value for the customer to avoid
being just an invention – whether simple or difficult it may be”. So, let’s now consider the
application of a new technology where it can be used. One of the potential applications might be
in printing newspapers.

The printed newspaper has been around for well over a century and it hasn’t really changed that
much during that time. The production technology has changed beyond recognition but the
product and the business model hasn’t. It’s a mass-market product – one size fits all with very little
segmentation apart from demography and geography. But just because it has survived for well
over a century doesn’t mean it will survive another one. With the rise of digital technology and the
time of multichannel communications, the customer requirements are changing. Today, an
average customer, browses through 60% of the paper and reads 10% of what serves his/her
interests. Each customer does his or her segmentation and targeting but what a Newspaper might
meet those needs and reinvent it? Let’s put aside for the moment the reality of manufacturing,
logistics, or costs and re-invent the newspaper to meet the needs of the individual Consumer.
A newspaper can be divided into 3 major sections:

Section 1. Belongs to the editor and includes News, Opinion, World, Business, Sport;

Section 2. Belongs to both worlds – editors and customers – and covers Art & Entertainment,
Homes, motoring, special likes & dislikes to the customers’ profile

Section 3. Belongs to the customer entirely and comprise additional pages from a list of options
such as specific sports, Business, Investing, Fashion, World, local News.

The question is how do you create a Newspaper like this? With a Prosper press of course! Using a
printing press where every copy can be different, but enables every customer get his or her own
unique Newspaper, without causing the Publisher to compromise on speed, cost or quality!
However, this has a fundamental impact on what a Newspaper Publisher provides as value and
change to become content aggregators rather than a printers!

Kodak sees the solution is Prosper printing, or offset presses. Prosper will allow segmentation and
targeting as every page can be different but still printed at offset speed, quality and cost. One can
even print in an order to fill each delivery van with exactly the mix they need by Shop on their
route. Newspapers will get extremely inflexible manufacturing systems enabling to do
segmentation or targeting and on op of that deliver speed and quality at today’s cost. Additionally,
one can think of the logistic benefits, too, via printing a variety of different Titles, on one press,
with every copy different, produced in an order that fits with the van route. Each shops can get a
unique mix of papers to be bundled together straight off the production line.

This technology is nascent and a handful of installation emerging in Europe of similar technology;
although, the power to innovate is still there.

9
Lessons leant

Real innovation creates value, solves a problem for a customer, and finds a way to reinvent the
business. One needs to keep listening to the customers’ likes and dislikes and think laterally about
what you have that you can re-use in a different form? How the technology can be applied in
novel ways to meet a need to provide unique value possibly in a very different market application.
Innovation disrupts the status quo sometimes dismissed by incumbent players or completely
missed by the market leaders.

Kodak Commercial Segment implies (b2b)

° Digital and Functional Printing (Digital Printers &


Presses; Digital Imaging Systems Packaging)
° Graphics and Entertainment & Commercial Film
(Digital Plates & Output Devices; Unified Workflow
Solutions; Entertainment Imaging; Commercial Film)
° Enterprise Services & Solutions (Document Imaging;
Services For Business)

Kodak Commercial Segment implies (b2c)

° Inkjet Systems
° Retail System Solutions
° Professional and Consumer Film, Paper and Output Systems

Our solutions portfolio reflects Kodak’s growth from its beginnings in analog products to a
diversified set of digital solutions today.
Although we continue to have market-leading film capture and entertainment products; Kodak’s
digital product lines accounted for approximately 75% of total company revenue in 2010.

10
LifeSpring Hospitals.

As with the Aravind example the origins of this innovation lie in concern for a specific
group of users who are marginalized from access to a key medical service –
maternity and perinatal care – on the basis of cost. The problem of maternal
mortality is significant; India has the highest rate of pregnancy-related deaths in the
world, with around 117,000 per year. (the Maternal Mortality Rate – the number of
such deaths per 100,000 live births – is 540 whereas the US figure is 17). There is a
high correlation with perinatal treatment; of the estimated 26million births each
year only 43% are supported by skilled staff.

Established in 2005 Lifespring targets customers from a key tier in the Indian
population, not the very bottom but low down the pyramid. Their customers are
typically women whose husbands work in the informal sector, who have no health
coverage and who are urban slum dwellers or in low income housing. The mission is
to provide core maternal healthcare (antenatal and postnatal, normal and caesarian
deliveries, and family planning services) at an affordable price . LifeSpring also
provides pediatric care (including immunizations), diagnostic and pharmacy services,
and health care education to the communities in which its hospitals are located.

Lifespring was set up as a joint venture between Hindustan Latex (a major


manufacturer of contraceptives) and the Acumen Fund (a US-based social capital
investor) and has treated more than 200,000 patients and delivered nearly 12,000
healthy babies since its inception in 2005. The model involves creating small - 20-25
bed – hospitals; the first broke even within 20 months and enabled the expansion of
a chain of similar facilities via what has become a standard operating model. It
maintains a tight focus, specializing in obstetrics, gynecology and pediatrics for
women within a 10km operating radius of their hospitals. Importantly, the facility is
designed for high throughput of ‘standard’ cases; women with complications are
identified early and referred to other clinics. Lifespring has become the largest chain
of maternity hospitals in South India, treating more than 70,000 patients and
delivering more than 7000 healthy babies each year; it now operates 12 hospitals in
the Hyderabad area.

The hospitals are positioned as a low-cost alternative to private clinics; there are
some government facilities which offer lower cost (subsidized) treatment but these
are oversubscribed and access is often difficult. Typically the charges for normal and
Caesarian deliveries are 12% of private clinics; normal births cost around 1.5K rupees
as against 8 to 10K and Caesarian figures are 6K as against 20-30K (Monitor_Group
2008).

Achieving these significant reductions has again involved a process of innovation


against a clear focused target vision. Once more the basic principles of high volume
standardized ‘production’ are central to this and there are clear similarities to the
Aravind model. In particular, LifeSpring's model is characterized by four ‘pillars’
which provide a focus around which a rage of innovations are grouped:
Service specialization
High throughput
High asset utilization
No frills service

(Significantly these are essentially the core principles of the low cost airline business
model which has had such a disruptive effect in short-haul aviation).

Service specialization involves a high level of standardization around a tightly


focused service offering. This allows for rapid replication and spread of the model –
a ‘drag and drop’ approach. Importantly complications are screened out early and
such patients are cross-referred to other specialized clinics. Operating protocols and
procedures are standardized which allows for the rapid training of low-skilled staff
and the replication of the model quickly into other situations. Standardized kits are
used for a wide range of surgical and other procedures and the range of medications
is kept low to reduce cost and increase purchasing leverage. Importantly a lower
skill-grade of nurse - ANM as opposed to GNM1 – is recruited; these nurses are
trained internally in a narrow field and achieve a high level of competence. This
helps retention whilst also reducing labour costs.

High throughput involves operating at a much higher volume (outpatient and


deliveries) than traditional players, enabling LifeSpring to spread its fixed costs over
a larger number of customers. In their hospitals they complete 100-120 deliveries
per month compared to 30-40 in similarly sized hospitals). Making this model work
depends on maintaining a consistent flow of patients. This is achieved by focusing
on areas of high population density but also working with those communities to
ensure widespread awareness. This is important in a sector with low literacy where
word of mouth is the key communication channel and where trusted
recommendation is of significance. Lifespring operate through a ‘sales force’
working in the community and make use of education ‘camps’ and offer vouchers
and baby packs to generate repeat business.

The ‘no frills’ element involves systematic focus on driving down costs through
elimination of unnecessary and non-value-adding activity – essentially the principles
of ‘lean thinking’ (Womack and Jones 1996). Medicines used are drawn from a
narrow range and inventories are kept low through a –just-in-time policy; pharmacy
services are outsourced to reduce costs and also cut the risk of pilferage. The
hospitals do not run their own ambulances and wards are general rather than
specialized. Capital expenditure is reduced through renting space in old hospital
premises and by working with a standard and limited set of equipment.

High asset utilization is achieved through deploying a cluster model; by setting up


multiple small hospitals within a single city many key resources – ambulances, back-
up facilities, etc – can be shared. Of particular significance (since the main cost in

1
General Nursing and Midwifery and Auxiliary Nursing and Midwifery certification by the Indian
Nursing Council
prenatal care is in doctor’s salaries) is the use of fixed salaries for doctors.
For more information see:

http://www.lifespring.in/
Operations Management

INNOVATION AS A WAY OF LIFE


This case was A Case Study of the Marshall Group
written by John
Bessant, Introduction
Professor of
Innovation Some things don't change. In 1909 people still enjoyed a
Management night out clubbing -and they still faced the less inviting
and Hannah prospect of trying to get home afterwards. The vagaries
Noke, Research of the English weather and the lack of public transport
Fellow, Cranfield didn’t help much either.
School of
Management, But some things do change – and it
Cranfield was whilst working at the University
University, Pitt Club that David Marshall
Cranfield, spotted an opportunity amongst the
Bedford MK43 late-night revellers trying to find
0AL, their way home. The streets of
England. Cambridge were beginning to get used to the idea of the
motor car as an alternative to the various horse-drawn
options or good old Shanks’s pony as a means of
transportation. Why not offer a chauffeur driven car
service? He obtained a couple of cars and drivers and the
Marshall company was formed with its first steps into the
new world of motor transportation.
© Copyright
Cranfield School The business quickly grew as a service operation and
of Management, although it was difficult during the period of the First
May 2005 World War, the company was able to develop a new line
All rights of business servicing ambulances and other military
reserved. vehicles – in the process extending their experience and
skills in support and maintenance. By the end of the war
David saw another emerging
opportunity as people embraced
the motor car as a form of personal
transportation. With the mass
production revolution pioneered by
Henry Ford in the USA the motor
car was becoming a mainstream
product. A number of entrepreneurs began establishing
car manufacturing in the UK and Marshall saw the
opportunity for working in what he felt would became a
growth sector. In 1920 he took on the dealership for the
Cambridge area for the new Austin company, bringing to
this operation the experience and knowledge gained in
Innovation as a Way of Life OM/HN/SG/05/05

running and maintaining his fleet of chauffeur driven cars.

The next step involved what was becoming a familiar


pattern – spotting opportunities in unmet needs. Whilst the
motor car brought many benefits, Marshall saw that for
some people – specifically those who enjoyed horse-riding,
feeling the wind in their hair and fresh air on their faces – it
had some drawbacks. Because the cabin was enclosed they
were insulated from this open air experience – so why not give them the option
to take the top off the car? However, when he approached Austin with the idea,
they insisted they only made ‘standard’ cars. So rather than give up he
purchased standard Austin cars and - using the skills and equipment in his
workshops where they already knew the Austin car inside out - converted them,
making the first Austin sports car.

Innovation by connecting

Understanding and often anticipating user needs and connecting them with a
technological capability – is a well-established characteristic of successful
innovators and one which runs through the history of the Marshall group of
companies. It has grown from its origins in the automotive sector to become a
major player in a variety of manufacturing and service fields – but this is not
simply a conglomerate. There is a clear and strong underlying link between its
businesses and significant use of knowledge acquired in one area to help enter
and open up new ones. Today it is one of the UK’s most successful privately
owned businesses with a turnover of around £650m and with over 4000
employees. Still headquartered in Cambridge, the Marshall Group has interests
in the retail motor industry, transport refrigeration, aviation and specialist
vehicle engineering.

For more background information on the company see


appendix 1 and the associated websites.

Like father, like son

Riding the wave of public interest in motor cars helped Marshall to grow as a
business – and by staying close to their principles of working with customers
they were able to expand the car retailing business, especially in the after-sales
service and maintenance area. But the recipe for their continuing success is as
much about diversity as careful stewardship of an established market position.

Arthur Marshall, David’s son had graduated from University in 1926 with a
strong interest in flying. Just as his father had seen opportunities in the newly
emerging field of motor cars, Arthur felt that his hobby might also presage a
growing new area of opportunity. The Wright Brothers had flown their aeroplane
in 1903, planes had been used extensively in World War One and by the late

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1920s flying was beginning to attract the interests of a growing number of


people. Being an adventurous young man Arthur decided he would like to learn
to fly and having done so purchased his first aeroplane in 1929.

Not long afterwards an opportunity arose from


his new hobby. One Monday Sir Alan Cobham,
famous for his flying circus, saw Arthur’s little
aeroplane on a field outside the family home.
Over lunch with Cobham a plan was hatched
that saw the land becoming Cambridge’s first
airport, with the condition that its first use was
to be for Cobham’s flying circus. Through this
Arthur found another opportunity and
developed a business out of teaching people to fly in his spare time on the De
Havilland Gypsy Moth. The flying training business prospered as local people
wanted to learn to fly.

Running an airport and flying school is not a simple matter and it quickly drew
the company into a new learning phase as it mastered the skills and
technologies which go with flying aeroplanes – for example providing hangars for
people to store their planes in and maintenance crew to look after them. And
borrowing lessons learned in car retailing there was a fruitful line in providing
finance to help people to purchase planes.

As with the car business aviation proved


another successful growth area for the
company. But in the 1930s it also became
clear that some key forces were shaping its
development in important new directions. The
aeroplanes that Marshall stored were getting
bigger and were heavy as they were being
made of metal instead of wood so they would
have to move. In 1937 Marshall moved to a
new and larger site and established
Cambridge’s second airport.

With the onset of WWII there became little need to provide services for the
flying enthusiast so instead Marshall concentrated on providing services to the
RAF. The company strengthened its flying training skills by the establishment in
1938 of an ab initio flying instructor training scheme which enabled young men
without previous flying experience to learn to fly and become flying instructors
within a 14 week period. This scheme, which was an immediate success, was
universally adopted by the Royal Air Force in 1941 and continues to this day.
Through its flying school Marshall taught 20,000 British pilots to fly, one sixth of
the total number trained.

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During this time the British Government were under increased pressure, as there
was very limited capacity in the RAF or the manufacturing companies to make
vital repairs and maintenance to the planes. Consequently Lord Nuffield set up
the Civilian Repair Organization, a body which looked for companies that could
do maintenance, repair and modification work on aircraft. Marshall fitted neatly
into this area and during the wartime period worked on over 5000 aircraft.

Central to the ability to work in this way was an accumulation of learning about
operating aircraft – just as motor cars – as a total service operation. Skilled
technicians capable of working on airframes and engines, investment in facilities
and equipment to deal with a wide range of often-open ended challenges and
close feedback from uses (such as the thousands of pilots who they trained)
helped build on understanding of the particular needs of this demanding market-
and the capability to deliver solutions configured to meet those needs. Much of
the activity inside a Marshall hangar would involve improvisation and innovation
around a particular repair or modification each one of which presented its own
challenges and required its own particular blend of knowledge, skill and
equipment, With 5000 opportunities for carrying out such learning it was not
surprising that by the and of the war the company had a deep understanding
and capability in the aircraft support industry.

A different tune, a different dance

Whilst the wartime period had helped Marshall develop deep competencies, the
end of the war brought with it a crisis. The military business declined rapidly and
the company was too highly geared up to volume work to return to the relatively
low demand of the leisure flying business. The result was 3,000 people working
for Marshall with very little to do. At this point what Arthur Marshall described as
‘another stroke of luck’ came their way. Near to their Cambridge base was
Bourne airfield on which the British Government were storing over 3,000
vehicles which had been loaned out to industry in support of the war. The
government wanted some of them back but wanted them serviced. Others
required scrapping but could be used for spare parts and the rest were ‘nearly
goers’ - not good enough for government use but still with potential. Arthur saw
the potential in this rusting collection and, using contacts he had made during
their wartime work, secured the contract to carry out the repair/recovery work.
Whilst there was a good business in repairing or scrapping for spares, the real
opportunity came with converting the ‘nearly goers’ into specialist vehicles for
delivery and related work for companies like Chivers Jams and Whitbread
Breweries.

It is worth reflecting for a moment on this idea of a ‘stroke of


luck’. Certainly an opportunity existed but it takes vision to see
the possibilities, especially beyond the obvious. And vision is not
enough if there is no capability to deliver on it – it was the years
of experience and competence-building around repair and

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modification of cars and aircraft which enabled Marshall to establish their


Specialist Vehicle division. Some luck, perhaps – but as Pasteur notably put it,
‘chance favours the prepared mind’.

Still flying high

Although the immediate post-war period saw a decline in aviation, it picked up


again as a market, both in the military sense (with the Cold War putting
emphasis on aircraft and missile technology) and in the rapidly growing civilian
airline business. With its wartime experience Marshall was in a strong position
to play a role as a sub-contractor to the growing number of aircraft
manufacturing firms in the UK. It carried out work on a wide range of military
and civilian aircraft.

But it didn’t achieve this position by accident or by resting on laurels won


through their extensive wartime work. Continued investment in skills and
technology and an increasing commitment to building a design capability lay at
the heart of this growth. By working across a broad spectrum of aircraft and
markets they were essentially following a ‘lead user’ approach, constantly being
stretched to acquire and deploy the latest technical capabilities. And by
continuing to invest in manufacturing they could make spare parts and offer
extensive support to the maintenance operation. The other key ingredient was
investment in a design capability –“it’s our in-house design and aircraft design
that really does set us above all the other jobbing shop and aircraft maintenance
companies”. They have invested heavily in aircraft design (they are the second
largest in the UK after BAe Systems) and this gives then a hard to imitated
competitive edge. As Terry Holloway put it, “aircraft design work gives us a skill
level above screwing nuts… It provides graduate engineers with design work that
is part of the motivation process because they want to stay with the company
because of the work that we are doing”.

In 1960, the Company began its strong links with the North
American aircraft industry when it became the first
Gulfstream Service Centre outside the USA. These US links
were strengthened in 1966 when Marshall began a
relationship with Lockheed Martin in introducing the C-130K
Hercules aircraft to Royal Air Force.

Since then, they have provided continuous support on the Hercules conducting
over 300 major modifications that have included wing
rebuilding and fuselage stretching. Their agility and
innovation skills were clearly demonstrated in the
installation of air to air refuelling equipment at the time
of the Falklands War in 1982 – they were able to
complete the entire project including designing, in just
19 days.

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More recently, Marshall have helped introduce the new C-130J variant to Royal
Air Force service and is also managing the Contractor Run Interim Logistics
Support Organisation, on behalf of Lockheed Martin in Swindon, supporting the
C-130J fleet at nearby RAF Lyneham.

In 1982, the company further strengthened its relationship with Lockheed Martin
when nine civilian TriStar aircraft were converted to Strategic Tanker Freighter
Aircraft for the Royal Air Force. Marshall is a Sister Design Authority to Lockheed
Martin for both the C-130 Hercules and the Lockheed TriStar. and to Boeing for
the RAF fleet of E3 Airborne Early Warning AWACS aircraft which it has been
responsible for servicing since 1995.

Driving innovation

Their progress in aviation did not overshadow the motor retailing business which
had been the basis of the company since the 1920s. In 1955 Michael Marshall
as a third generation family member joined the motor business and began
expanding it. His early contribution was to take it from the original Jesus Lane
garage site through a major expansion programme. Today the business
represents 16 manufacturers and is engaged in a wide range of leasing,
financing and other related activities as well as retailing and servicing vehicles.
Innovation has been just as evident in this field – the company were the first to
install CRM (customer relationship management) software in the UK and
pioneered the concept of the multi-franchise car supermarket. Their parts and
distribution systems are highly developed and integrated to provide scale
economies across different franchises. Above all they have stayed close to their
customer base, developing a strong reputation for service and customer loyalty.

A question of balance

Marshall's has used its diverse nature to its advantage and it has been able to
balance out the peaks and troughs of business through spreading the risk it
takes through different revenue streams. We have already seen this in their
ability to switch into different but related areas of technology and market. But it
also operates as a principle within business areas, for example, in the motor
retailing part of the organisation where they have 16 different franchises.
Similarly, part of the rationale behind deciding to maintain a manufacturing
operation is that it provides the business with large amounts of cash in arrears
but high costs upfront, whereas the advantage of the motor retailing business is
that they do not have to pay the manufacturer till much later.

But the ability to operate in business areas with different cycles and cash flow
patterns only works if there is integration at a deeper level, around the area of
technological and market knowledge. Their consistent investment in building
mechanisms to get and stay close to user needs (even in the highly demanding
field of aerospace) and in learning-by-doing around key technological areas has

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paid off in giving them the flexibility to make such cross-business synergies
actually work.

Innovation philosophy

It would be hard to argue with the premise that Marshall are an innovative
company – in products and services offered, in processes deployed, in markets
and positioning and in their underlying business models. They are well known as
early adopters and often pioneers of new fields – a tradition which clearly goes
back to the early days of the business.

Yet although they are consistently at the forefront in terms of innovation they
don’t see themselves as driven by the pursuit of innovation. Rather this is an
output, a consequence of having positioned themselves to be able to identify and
exploit interesting new opportunities. As Terry Holloway puts it,

“Innovation itself is not something that drives our business, what I see
driving our business is the opportunity to make profit which sustains
growth, growth provides long term which provides long term employment,
sustains our workforce and enables us to increase skills if you have a high
skills base you can be more flexible you can become more innovative”

Being family owned has enabled Marshall’s to have a long-term strategic outlook
on its future rather than be driven by short-term gain. This has often seen the
company invest in projects that did not always offer a return such as a rocket
that Marshall developed with NASA. Whilst this project did not make money, it
enhanced their reputation in the field and lead to further opportunities. Other
projects in the same vein have included work on the fuel cell that was eventually
used in all U.S space aircraft, the design of Concorde’s dropped nose and
auxiliary fuel tanks on the Boeing ER range. The value from these projects is not
viewed purely in monetary terms but the fact it offers Marshall’s engineering
varied and interesting leading edge projects and builds their reputation.

It has also helped them follow through and grow with emerging opportunities.
For example, in the aerospace field “we saw the advantage of putting our design
office equipment right alongside our maintenance people in the hangars so they
could interact and work together. We recognised that aircraft maintenance was a
complete service package, and by being able to offer post design support we
now manage people’s fleets of aircraft “

But their approach to innovation is not simply picking up on opportunities – they


are adept at getting close to users and working with them to develop new
directions – essentially employing their version of what Eric von Hippel calls the
‘user active’ approach to innovation. A good example comes from the Specialist
Vehicle division where through a contract with the British Army developing Land
Rover ambulances another project arose. When talking to the doctors about the
ambulances, they also started complaining about how terrible the tents were

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that they used as operating theatres. Through this conversation Marshall’s were
able to link their existing competences of making mobile units such as bakeries
to being able to create an expandable mobile theatre. The resulting mobile
theatre is ISO container size in transit but expands to three times the size. It
has been designed as a modular unit to transport, yet with surgical facilities that
looked exactly the same as an NHS operating theatre from inside but in
miniature. These were highly successful in the Gulf War and sold to other
governments.

But the same doctors highlighted the shortage of NHS operating theatres, which
take years to build new hospitals. From this came the idea of designing modular
full size operating theatres that were built by Marshall in 25/26 weeks, fully
equipped and tested. Then they were broken down and transported over a
weekend and installed on a pre-prepared site. From specialist vehicle to
providing the health sector with increased capacity that is cheaper and easier to
install shows the Marshall innovation philosophy in action.

The importance of human capital

Underlying the Marshall Group’s success is a strong commitment to its


employees, one indicator of which is the number of long service awards achieved
in the company. Three awards have been awarded for 60 years of service, 23 for
50 years, 194 for 40 years and 545 for 30 years of service! This is not simply the
result of paternalistic employment practices but rather recognition of the high
dependence the business has on its workforce. Being able to offer highly
customised solutions to emerging market needs requires a combination of
technical expertise, creativity and flexibility which is delivered through motivated
and well–trained people. The commitment which the company has to training
goes well beyond simply upgrading skills to include significant opportunities for
personal and career development – but it is also based on sound business logic
around securing a long-term return on this investment. “We have an ethos in the
business of giving people the greatest skills possible as well as initial training
and continuous professional development and you can’t afford to do this if you
don’t keep your people for a very long time because if not they become a drain
on your overheads which means that you are not competitive”.

A good example of this philosophy has been their approach to apprenticeships.


Whilst this form of training lapsed during the second half of the 20th century
some companies recognised that without investment in developing the
combination of technical knowledge and its practice future growth prospects
would be damaged. The aerospace sector is a good example which explains why
Marshall continued to invest in this activity; 23% of the Modern apprentices for
the Aerospace Industry in the UK in 2004 were trained by Marshall Aerospace
confirming its commitment to ‘good’ people in its businesses.

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Innovation as a dynamic capability

Any organization can get lucky once – someone comes up with a new idea,
someone spots a great unexploited opportunity, the firm finds itself in the right
place at the right time, or some other combination of circumstances leads to
some success with something new. Using innovation to enable long-term
survival and growth is much more difficult – it depends on building the capability
to repeat the trick. Research on innovation consistently supports the view that
successful firms learn how to do this – not always an easy process and with
problems as well as successes - but a process which builds capability and also
makes it harder for others to simply copy them. The trouble with innovation, of
course, is that it is unpredictable – the challenges of new markets, technologies,
the business and political environment and a host of other elements don’t stay
conveniently static. So effective innovation management involves learning and
continuing to learn – building what is often called dynamic capability.

Marshall offers a good example of this process – on the surface it appears to


have had a number of ‘lucky’ breaks – being in the right place and equipped with
the capabilities to exploit new opportunities as they emerge. But if we look
closer we can see that their ability to take advantage of new circumstances
depends enormously on investments and commitments they have made in the
past and capabilities which they have built up. They faced a number of crises –
for example, the downturn in demand following the end of the Second World War
could have finished the company but instead they were able to diversify into
specialist vehicle building and conversion. But they could only do this because of
a long-standing commitment to developing the technology and skills base
around vehicle repair and maintenance – something which went right back to the
earliest days of the chauffeur cars business. Similarly their ability to play a key
role in aerospace is not simply the fact that they have a long history of being
linked to aviation but because they have invested consistently in building the
knowledge and skill base (as shown in their commitment, for example, to design
capabilities) to move forward with that industry.

Innovation tends to move in two modes – long periods of ‘doing what we do, but
better’ punctuated by occasional radical shifts into completely new territory.
Marshall demonstrate an ability to deal with the former through systematic
incremental innovation and in particular working closely with users. But they are
also able to deal with ‘discontinuous’ innovation and move into radically different
areas of activity. This is not a matter of size or asset base but rather the ability
to combine a deep knowledge base with emerging opportunities in the
technological and business environment. Their private status may help create
the conditions for taking riskier bets than a publicly quoted firm might be
comfortable with – but their internal decision-making is still firmly grounded in
responsible business development. It is rather a case that they are able to
preserve some of the agility, which they had when first starting out as a small
business – being able to spot an opportunity early on and then do something
about it. Increasingly the ‘doing something about it’ requires deeper knowledge

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resources (in skills, technologies, market understanding, etc) but these have
been systematically and proactively developed over many years – as their
investment in human capital demonstrates.

In many ways their innovation success is not down to a formal innovation plan
or even a specific innovation structure such as we might find in the
pharmaceutical industry. Instead it is embedded in the culture of the company –
‘the way we do things around here’. Their success comes from learning and
building this culture up over the long-term and might be captured in the phrase
attributed to Gary Player, the famous golfer. He used to explain his consistent
success by saying ‘its’ funny – the more I practice, the luckier I get!

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Appendix 1: Background information on the Marshall group of


companies

Founded in 1909 with little capital as a chauffeur drive company in Cambridge, Marshall
moved into the retail motor business in 1911, obtained the Austin Distributorship for
Cambridgeshire in 1920 and entered the aviation business in 1929. With all its growth
funded by ploughed-back profits, the Marshall Group, which is still a privately owned
family Company and chaired by the third generation of the Marshall family, now has a
turnover approaching £650M per annum. The Group currently has an employment of
approximately 4,000 working in the fields of Aerospace engineering; design and
manufacture of specialist vehicle applications, military mobility shelters and hospital
surgical units; Motor Vehicle sales and after sales support; Refrigerated Transport sales
and support; and Airport Property Ownership and Management.
(www.marshallgroup.co.uk)

The Group looks forward to building on its strengths for the future prosperity of the
shareholders and the community, based on the reputation it has earned during many
years for stability, quality of workmanship, value for money and service to its many
customers throughout the world.

Each of the main companies of the Group is largely autonomous and self-accountable.

1. MARSHALL MOTOR HOLDINGS

The largest and founding company of the Marshall Group, with a turnover of around
£500M per annum and just over 2,000 employees is Marshall Motor Holdings, which
itself comprises four principal businesses:

MARSHALL MOTOR GROUP (www.marshallweb.co.uk)

With 42 showrooms representing 16 different manufacturers, a turnover


approaching £450M per annum and almost 1,700 employees, Marshall Motor Group
is one of the largest privately owned motor dealer groups in Great Britain. Although
the dealerships are largely concentrated in the Cambridge/Peterborough/Bedford
area of East Anglia, Marshall Motor Group also has operations in Ipswich, Reading,
Leicester, Bury St Edmunds, Melton Mowbray, King’s Lynn, Lincoln, Grantham and
Spalding.

The Marshall Motor Group is widely recognised as a leader in the development of


large multi-franchise sites. The most impressive example of this is the Marshall
Car Centre, which was opened on Marshall-owned land opposite the Airport on
Newmarket Road in Cambridge by HRH The Prince Michael of Kent in 1995. The
Marshall Car Centre occupies nearly half a mile of prime retail land on this
important entry route into Cambridge and remains unique in scale and concept in
Great Britain. With eleven different vehicle manufacturers represented, together
with a substantial dedicated used car sales operation and a 60,000ft² parts
warehouse, Marshall Car Centre customers enjoy unrivalled choice and levels of
customer service.

Marshall also operates a similar multi-franchise operation in the Boongate area of


Peterborough, where seven dealerships are situated side-by-side.

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MARSHALL THERMO KING (www.marshallthermoking.co.uk)

Founded in 1972, Marshall Thermo King now has 12 depots covering England, a
turnover of around £35M per annum and 270 employees. Marshall Thermo King
specialises in the sales and after sales support of advanced, vehicle-mounted,
temperature control units. With nearly 130 fully equipped mobile engineers on
call 24 hours-a-day, 365 days-a-year, Marshall Thermo King offers unrivalled
support to transport fleet operations across the country, including those for many
of the country’s largest retailers.

MARSHALL LEASING (www.marshallleasing.co.uk)

With 25 employees, a turnover of around £20 million per annum, and a fleet of
about 3,000 cars, Marshall Leasing fills a specialist niche sector in the vehicle
leasing and fleet management market. Through its offices in Huntingdon and
London, Marshall Leasing has built up a portfolio of household name customer
companies which value the personal attention, flexible service and the range of
tailored packages available from Marshall.

VTR GROUP (www.vtrgroup.co.uk)

The VTR Group, with 30 employees and a turnover of £3M per annum, is a
Midlands-based company specialising in the service and maintenance of
commercial vehicle tail lifts. The company has branches in Walsall, Atherstone,
Worcester, Stoke and Didcot. This, along with its fleet of mobile engineers,
provides a service “around the clock” to customers from Manchester in the North
to the Thames Valley in the South.

2. MARSHALL AEROSPACE LTD (www.marshallaerospace.com)

Marshall Aerospace, with employment which averages around 1,700 and sales
approaching £120m per annum, has a wide range of international approvals and
certifications, including ISO 9001 (BS5750), JAR 145 and FAA Maintenance and
Repair Station, and has specialised in recent years in design, modification and
maintenance support for aircraft such as:

C-130 Hercules, for which Marshall Aerospace has been the UK Designated
Company for the RAF aircraft since 1966 and Sister Design Authority since
1988. The Company has carried out a number of major modifications
including fuselage stretching and wing rebuilding, and designing and
implementing the installation of a wide variety of specialised equipment,
including the provision of air-to-air refueling and electronic self defense
capability. The company is a global leader for C-130 work, and in addition to
its work for the RAF, the Company performs work on C-130s for a wide range
of other air forces and civilian operators. This has recently included a major
avionics upgrade for the South African Air Force, the conversion of aircraft for
Austria, and ongoing maintenance work in Australia. It has received over
1,500 inputs and has carried out work for over 30 international operators of
the aircraft. The Company provided support for Lockheed Martin to help with
the introduction of the C-130J into RAF service and is managing, on behalf of

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Lockheed Martin, the Contractor Run Interim Logistics Support (CRILS)


arrangements supporting RAF C-130J operations at RAF Lyneham.

Lockheed L10-11 TriStar, for which the Company is the Design Authority for
the Royal Air Force fleet of TriStar Tanker/Freighter aircraft which Marshall
converted to these roles in 1983/92. The Company has also converted 10
passenger TriStar aircraft for use as civil freighters in the United States.
Marshall Aerospace enjoys a world-wide reputation for maintenance, repair
and modification of a large number of civilian operated TriStars. The
Company has also designed and installed the modification of an aircraft for
carriage and launch of 50,000 lb Pegasus rockets to place satellites into orbit
and, subsequently, modified the same aircraft to carry X-34 a NASA Hypersonic
Space Research Vehicle.

Boeing E-3D Sentry AEW, for which Marshall is the appointed Sister Design
Authority for the RAF and is currently contracted to carry out major servicing
(Depot Level Maintenance) on the RAF fleet of seven aircraft.

Marshall Aerospace’s Corporate Division has been approved by Cessna since


1974 and is the only Cessna approved Citation Service Station in the UK
approved on all Citation Models.
From the original Citation 500 and 650 models to the advanced Citation VII,
the Company is fully equipped to offer the full range of scheduled
maintenance and AOG support.
A large inventory of spares is held in stock at Cambridge, to allow immediate
response on maintenance work.

Marshall Aerospace is fully conversant with the CESCOM computerised


maintenance system and maintains CESCOM records on the customer’s
behalf.
All Cessna Service Bulletins can be incorporated and engine work undertaken,
including HIS and Overhaul, on all JT15D series engines.
Airworthiness and flight test staff are experts in the Citation, with several test
pilots having long association with the type.

Airbus A320 on which Marshall Aerospace carries out maintenance for a


number of airlines and currently includes major servicing for KLM.

Boeing 747-400 on which the Company has conducted modification work on


over 130 aircraft on behalf of British Airways. The Company has also
undertaken maintenance work for Lufthansa.

Boeing 777 on which the Company has conducted modification and


maintenance work on new aircraft for a number of airlines.

MD-11 which has included a major interior modification programme for Delta
Airlines and servicing for KLM.

Boeing 767

A range of other aircraft, including DC10, BAE 125, Dominie, and numerous
light aircraft.

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Marshall Aerospace is also working closely with BAE Systems, providing design
and maintenance work to underwrite the airworthiness of the sole flyable
AVRO Vulcan, which it hopes to be able to return to flight.

A major strength of the Company’s aerospace business is its Aircraft Design


Office. Notable past achievements have included the design and build of the
Concorde droop nose and visor in 1967, and a space sled for medical research
which flew 121 orbits in the Space Shuttle “Challenger” in 1985. The Design
Office also undertakes considerable work associated with modification and
maintenance programmes, which has recently included an avionics update for the
RAF fleet of navigation training Dominie aircraft. Recent programmes include a
major avionics update and integration programme on C-130 Hercules aircraft for
the South African Air Force. The Company’s Aircraft Design Office is equipped
with the latest Sun CAD stations with a variety of software programs, including
Mentor Graphics for avionics and wiring, MEDUSA and CADAM for two-
dimensional structure design, and NASTRAN advanced finite stress analysis. The
Company introduced CATIA in 1998 to provide three-dimensional structural
design and this was updated to CATIA series 5 in 2000. The Design Office also
uses desk-top publishing programs for technical publications.

The Company’s extensive Manufacturing facilities comprise state-of-the-art CNC


milling machines, automatic lathes, a 35 ft bed sculpture milling machine, specialist
pipe bending equipment including of double skin pipes, and 5-axis CNC inspection
equipment. Recent products include the manufacture of Marshall designed
lightweight long-range fuel tanks for Boeing MD-11 aircraft, the manufacture of
freight doors for Gulfstream IV aircraft, and a range of non- aircraft precision
work including airport signs, military bridge components, high-technology
windows for the House of Commons’ new administrative building, and railway
carriages. The Company is currently engaged in a major manufacturing project,
producing Marshall designed revolutionary lightweight fuel tanks for Boeing 747 –
400 aircraft, and Boeing 777 aircraft.

The Company also provides extensive engineering support for a number of


customers on a worldwide basis, including Post Design Service work,
management of rotables and maintenance support.

The Company has hangar space sufficient to accommodate, at the same time in
full flying trim, up to three Boeing 747-400 aircraft, or up to six wide-bodied aircraft
(TriStar or MD-11 etc) and up to 12 C-130 aircraft, eight Gulfstream aircraft (or
BAe 146) plus over 50 assorted smaller aircraft ranging from Citation down to
Cessna 152s.

A Marshall Aerospace subsidiary company, Aeropeople (www.aeropeople.com)


provides trained manpower to a wide range of international customers.

Marshall Aerospares, with an inventory of over 55,000 parts and a dedicated


team of spares and rotables controllers, is one of the leading businesses in its
field providing 24 hours a day, seven days a week service.

3. MARSHALL SPECIALIST VEHICLES LTD (www.marshallsv.com)

Cranfield School of Management 14


Innovation as a Way of Life OM/HN/SG/05/05

Established in 1946, Marshall Specialist Vehicles (MSV) is, today, a world leader
in the design and supply of Mobile Military Equipment, Medical Systems, and
Homeland Security Vehicles. Marshall SV is an ISO 9000/2000 company with an
annual turnover in excess of £25M and an employment close to 150.

Historically, MSV has supplied the MoD with more than 80,000 vehicle bodies and
more than 5,000 tactical shelters in over 200 different configurations.
Additionally, the company designed, manufactured and delivered 9,500 DROPS
Flatracks which are currently in service with the British Army. MSV went on to
design and supply 43 DROPS Fuel Racks as ‘mobile filling stations’ and 830 field
ambulances on Land Rover chassis to the British Army.

With the British Forces’ change from a Cold War emphasis to a Rapid Reaction
Expeditionary Force, MSV’s military business has changed from being an equipment
manufacturer to a Systems Integrator. MSV’s Military business is centred around
providing deployable Systems for the UK MoD and Military customers world-wide.
Currently, MSV is a Prime contractor for the supply of mobile Field Hospitals, Power
Pack Repair Facilities, and Mobile Bakeries. MSV also designs and integrates
Ground Stations for the Stand-off Radar (ASTOR) project and the Battlefield
Communication (Cormorant) project.

Very recently, MSV has branched into the provision of vehicle systems for use by
the Emergency Services in the event of terrorist attacks on the homeland. MSV is
a major player in providing solutions to deploy various countermeasures equipment
to satisfy the Homeland Security measures being put into place by the UK
Government.

MSV also provides Modular Surgical Facilities to the NHS. Indications are that
MSV’s Modular Medical Systems Group is set to become an important part of the
business as NHS hospitals rush to modernise their infrastructures.

4. MARSHALL OF CAMBRIDGE AIRPORT PROPERTIES LTD

The Group owns the 475 acres to the South of Newmarket Road which comprises
the Airport itself and its 50 acre industrial area, as well as 70 acres of industrial
land on its North Works. A total of 1.25 million square feet of hangars, industrial
buildings, showrooms and offices are occupied by Marshall Aerospace, Marshall
Specialist Vehicles and the Marshall Motor Group’s unique Marshall Car Centre
and Airport Garage. The Group also owns 250 acres of farmland to the North
and East of the airfield and in its property portfolio in Cambridge are included two
investment properties, The Quorum and the Greenhouse Park Innovation Centre.

5. CAMBRIDGE CITY AIRPORT (www.cambridgecityairport.com)

Marshall owns and operates Cambridge City Airport. The airport maintains a full
Public Use Licence which, among other requirements, includes a team of licensed
Air Traffic Control Officers and supporting staff, as well as fully qualified Fire and
Rescue Service staff, dedicated security staffs and some of the most up-to-date
major fire appliances. The Airport has an Instrument Landing System, a
digitised colour radar approach facility, an NDB and a DME. A new Control Tower
was commissioned early in 2000, and an area radar was commissioned in 2002.

Cranfield School of Management 15


Innovation as a Way of Life OM/HN/SG/05/05

The first part of the main runway was built in 1953 and progressively extended to
its current 1,965 metre length. The runway is capable of accepting most aircraft
types, including wide-bodied jets, which includes Boeing 747-400 aircraft.

The extensively equipped and up-to-date modern International Airport provides


excellent facilities for business travel through the Marshall Executive Air Centre,
together with holiday and recreational flights to and from Cambridge. As a
particularly well equipped Regional Airport, Cambridge City Airport is available to
make an important contribution to the future development of air transport in the
region. The Airport is of particular importance to Cambridge University for
conferences, the support of horse racing at Newmarket, and the bloodstock trade
in general. The Airport also supports a wide variety of military test flying, flying
training and business flights.

6. MARSHALL EXECUTIVE AVIATION (www.marshallexecair.com)

Based at Cambridge City Airport, Marshall Executive Aviation utilises the company’s
very modern Citation Bravo aircraft offering a variety of aircraft charter
operations through Europe and Northern Africa.

7. MARSHALL CHAUFFEUR DRIVE (www.marshalldrive.co.uk)

Marshall Chauffeur Drive is the founding business of Marshall which started in


1909. Today, the company offers a fleet of luxury high class chauffeur drive
Jaguar, Rover and Chrysler vehicles for its many customers.

8. COMMUNITY MATTERS AND EMPLOYEE DEVELOPMENT

The Marshall Group of Companies takes a pro-active environmental stance, and


works closely with local Councils, the Environment Agency and the Government
Offices of the Eastern Region on a wide range of topics.

Marshall of Cambridge, as the major engineering employer in the region, maintains


particularly strong links with Cambridge University, local colleges, the Training &
Enterprise Council and Business Link, The Cambridgeshire Chamber of Commerce
and Industry, The Science and Technology Regional Office (SATRO), EEDA (East of
England Development Agency), the new Learning & Skills Council, Connexions, the
County, City and District Councils, as well as with a variety of Residents’
Associations and Parish Councils. The airport has an active Consultative
Committee which acts as an important interface with the local community.
The Company also provides strong support to the Cambridge Air Training Corps
Squadron. All of these relationships help maintain the harmonious
relationship between the Company and the communities where its businesses are
located.

The Group of Companies and its employees participate in a wide range of


community projects including: wildlife, the arts, sport, healthcare, education and
charities. There is also a diverse programme of visits to the Company’s Airport
Works premises. The Company supports a number of local schools and has
“sponsored” three Cambridge Schools, Teversham Church of England Primary
School, Bottisham Village College and Coleridge Community College, where
dedicated members of staff assist with Science, Engineering and Mathematics

Cranfield School of Management 16


Innovation as a Way of Life OM/HN/SG/05/05

projects. The Company also takes interest in a wide number of other schools
where employees assist with school management as Governors. Strong
leadership is demonstrated by senior directors and executives who take on a
number of non-executive roles in a wide range of community projects. National
projects which benefit from the encouragement and help of the Group of
Companies include: The Air League Educational Trust, the Air Training Corps, the
RAF Benevolent Fund, the Duke of Edinburgh’s Award Scheme and BEN, the charity
of the Motor Industry.

The Company has strong links with the University of Cambridge which particularly
includes Cambridge University Engineering Department through the “Sir Arthur
Marshall Institute for Aeronautics” (SAMIA) (www.samia.org.uk) which
encourages a wide range of aeronautical engineering disciplines.

The Marshall Group of Companies is a Member of the Engineering Employers’


Federation, The Society of British Aerospace Companies and The Institute of the
Motor Industry and the Eastern Aerospace Alliance. The advancement of
employee skills is maintained through a robust training and development
programme. The Marshall Group Training School maintains a regular apprentice
intake each year and provides surplus training capacity to other local companies.
Currently, 23% of the Modern apprentices for the Aerospace Industry in the UK
are trained by Marshall Aerospace. Marshall was also one of the first companies
to introduce the Modern Apprentice Scheme to the Aerospace Industry, and has
pioneered the development of its very successful re-skilling programme to enable
adults over 25 years of age to upgrade their capabilities and to become skilled
aircraft fitters at an NVQ 3 level. The company takes in around 12 graduate
trainees each year, and participates in “The Year of Industry” scheme for
undergraduates.

Marshall Aerospace holds the national “Investors in People” Award and takes huge
pride in the large numbers of employees who have achieved long service with the
company. Three awards have been awarded for 60 years of service, 23 for 50
years, 194 for 40 years and 545 for 30 years of service.

Cranfield School of Management 17


The dimming of the light bulb

In t he beg inning….

God said let there be light. And for a long time this came from a rather
primitive but surprisingly effective method - the oil lamp. From the early days
of putting simple wicks into congealed animal fats, through candles to more
sophisticated oil lamps people have been using this form of illumination.
Archaeologists tell us this goes back at least 40,000 years so there has been
plenty of scope for innovation to improve the basic idea! Certainly by the
time of the Romans domestic illumination - albeit with candles - was a well-
developed feature of civilized society.

Not a lot changed until the late 18th century when the expansion of the
mining industry led to experiments with uses for coal gas - one of which was
as an alternative source of illumination. One of the pioneers of research in
the coal industry - Humphrey Davy - invented the carbon arc lamp and
ushered in a new era of safety within the mines - but also opened the door to
alternative forms of domestic illumination and the era of gas lighting began.

But it was not until the middle of the following century that researchers began
to explore the possibilities of using a new power source and some new
physical effects. Experiments by Joseph Swann in England and Farmer in the
USA (amongst others) led to the development of a device in which a tiny
metal filament enclosed within a glass envelope was heated to incandescence
by an electric current. This was the first electric light bulb - and it still bears
more than a passing resemblance to the product found hanging from millions
of ceilings all around the world.

By 1879 it became clear that there was significant commercial potential in


such lighting - not just for domestic use. Two events occurred during that
year which were to have far-reaching effects on the emergence of a new
industry. The first was that the city of Cleveland - although using a different
lamp technology (carbon arc) - introduced the first public street lighting. And
the second was that patents were registered for the incandescent filament
light bulb by Joseph Swan in England and one Thomas Edison in the USA.

Needless to say the firms involved in gas supply and distribution and the gas
lighting industry were not taking the threat from electric light lying down and
they responded with a series of improvement innovations which helped retain
gas lighting's popularity for much of the late 19th century. Much of what
happened over the next 30 years is a good example of what is sometimes
called the 'sailing ship effect'. That is, just as in the shipping world the
invention of steam power did not instantly lead to the disappearance of
sailing ships but instead triggered a whole series of improvement in that
industry, so the gas lighting industry consolidated its position through
incremental product and process innovations.

But electric lighting was also improving and the period 1886-1920 saw many
important breakthroughs and a host of smaller incremental performance
improvements. In a famous and detailed study (carried out by an
appropriately named researcher called Bright) there is evidence to show that
little improvements in the design of the bulb and in the process for
manufacturing it led to a fall in price of over 80% between 1880 and 1896.
[Bright, 1949 #214] Examples of such innovations include the use of gas
instead of vacuum in the bulb (1913 Langmuir) and the use of tungsten
filament.

Innovation theory teaches us that after an invention there is a period in which


all sorts of designs and ideas are thrown around before finally a 'dominant
design' settles out and the industry begins to mature. So it was with the light
bulb; by the 1920s the basic configuration of the product - a tungsten
filament inside a glass gas-filled bulb - was established and the industry
began to consolidate. It is at this point that the major players with whom we
associate the industry -Philips, General Electric, Westinghouse - become
established.

Technological alternatives

Although the industry then entered a period of stability in the market place
there was still considerable activity in the technology arena. Back in the 19th
century Henri Becquerel invented the fluorescent lamp and in 1911 Claude
invented the neon lamp - both inventions which would have far-reaching
effects in terms of the industry and its segmentation into different markets.

The neon lamp started a train of work based on forming different glass tubes
into shapes for signs and in filling them with a variety of gases with similar
properties to neon but which gave different colours.

The fluorescent tube was first made commercially by Sylvania in the USA in
1938 following extensive development work by both GE and Westinghouse.
The technology had a number of important features including low power
consumption and long life - factors which led to their widespread use on
office and business environments although less so in the home. By the 1990s
this product had matured alongside the traditional filament bulb and a range
of compact and shaped fittings were available from the major lighting firms.

Meanwhile, in another part of the world….

Whilst neon and fluorescent tubes were variations on the same basic theme of
lights, a different development began in a totally new sector in the 1960s. In
1962 work on the emerging solid state electronics area led tot he discovery
of a light emitting diode - LED - a device which would, when a current passed
through it, glow in red or green colour. These lights were bright and used
little power; they were also part of the emerging trend towards
miniaturization. They quickly became standard features in electronic devices
and today the average household will have hundreds of LEDs in orange,
green or red to indicate whether devices such as TV sets, mobile phones or
electric toothbrushes are on and functioning.

Development and refinement of LEDs took place in a different industry for a


different market and in particular one line of work was followed in a small
Japanese chemical company supplying LEDs to the major manufacturers like
Sony. Nichia Chemical began a programme of work on a type of LED which
would emit blue light - something much more difficult to achieve and
requiring complex chemistry and careful process control. Eventually they
were successful and in 1993 produced a blue LED based on Gallium arsenide
technology. The firm then committed a major investment to development of
both product and process technology, amassing around 300 patents along the
way. Their research culminated in the development in 1995 of a white light
LED - using the principle that white light is made up of red, green and blue
light mixed together.

So what? The significance of Shuji Nakamura's invention may not be instantly


apparent - and at present the only products which can be bought utilizing it
are small high power torches. But think about the significance of this
discovery. White LEDs offer the following advantages:

85% less power consumption


16 times brighter than normal electric lights
tiny size
long life - tests suggest the life of an LED could be 100,000 hours - about
11 years
can be packaged into different shapes, sizes and arrangements
will follow the same economies of scale in manufacturing that led to the
continuing fall in the price of electronic components so will become very
cheap very quickly.

If people are offered a low cost, high power, flexible source of white light they
are likely to adopt it - and for this reason the lighting industry is feeling some
sense of threat. The likelihood is that the industry as we know it will be
changed dramatically by the emergence of this new light source - and whilst
the names may remain the same they will have to pay a high price for
licensing the technology. They may try and get around the patents - but with
300 already in place and the experience of the complex chemistry and
processing which go into making LEDs Nichia have a long head start. When
Dr Nakamura left Nichia Chemical for a chair at University of California, Santa
Barbara, sales of blue LEDs (light-emitting diodes) and lasers were bringing
the firm more than $200m a year and the technology is estimated to have
earned Nichia nearly $2bn.

Things are already starting to happen. Many major cities are now using
traffic lights which use the basic technology to make much brighter green and
red lights since they have a much longer life than conventional bulbs. One US
company, Traffic Technology Inc. has even offered to give away the lights in
return for a share of the energy savings the local authority makes! Consumer
products like torches are finding their way into shops and on-line catalogues
whilst the automobile industry is looking at the use of LED white light for
interior lighting in cars. Major manufacturers such as GE are entering the
market and targeting mass markets such as street lighting and domestic
applications, a market estimated to be worth $12bn in the USA alone.
Sewing up the Competition – Innovation in the Textile and Clothing Industry

Manufacturing doesn’t get much older than the textile and clothing industry. Since the earliest
days when we lived in caves there’s been a steady demand for something to wrap around us
to keep warm and to protect the more sensitive bits of our anatomy from the worst of the
elements. What began with animal hides and furs gradually moved into a more sophisticated
activity with fabrics woven from flax or wool – and with people increasingly specializing in the
business.

In its early days this was very much a cottage industry – quite literally people would spin
wool gathered from sheep and weave simple cloths on home-made looms. But the skill base
– and the technology – began to develop and many of the family names we still have today –
Weaver, Dyer, Tailor, for example – remind us of the importance of this sector. And where
there were sufficient cottages and groups of people with such skill we began to see
concentrations of manufacturing – for example the Flemish weavers or the lace-makers in
the English Midlands. As their reputation – and the quality of their goods – grew so the basis
of trading internationally in textiles and clothing was established.

The small-scale nature of the industry changed dramatically during the Industrial
Revolution. Massive growth in population meant that markets were becoming much bigger
while at the same time significant developments in technology (and the science
underpinning the technology) meant that making textiles and clothing became an
increasingly industrialized process. Much of the early Industrial Revolution was around the
cotton and wool industries in England and many of the great innovations and machinery –
such as the spinning jenny – were essentially innovations to support a growing international
industry. And the growth of the industry fuelled scientific research and led to developments
like the invention of synthetic dyes (which allowed a much broader range of colour) and the
development of bleaching agents.

There’s a pattern in this in which certain manufacturing innovation trajectories play a key
role. For example, the growing mechanization of operations, their linking together into
systems of production and the increasing attempts to take human intervention out through
automation. Of course this was easier to do in some cases than others – for example one of
the earliest forms of programmable control, long before the invention of the computer, was
the Jacquard punched-card system which could control the weaving of different threads
across a loom. But actually making material into various items of clothing is more difficult
simply because material doesn’t have a fixed and controllable shape – so this remained
increasingly a labour-intensive process.

By the twentieth century, the industries had become huge and well established, with growing
international trade in raw materials such as cotton and in finished goods. The role of design
became increasingly important as basic demand was satisfied and certain regions – for
example, France and Italy – began to assume strong reputations for design. Branding
became increasingly important in a world where mass communications began to make the
telling of stories and the linking of images and other elements into advertising, which fuelled
demand for clothing as much more than a basic necessity purchase.

©2016 Joe Tidd, John Bessant


1
Mass production methods and the scientific management approaches underpinning them
diffused rapidly and, in the case of clothing assembly which remained a labour-intensive
process, led to the quest for lower-wage-cost locations. So began the migration of clothing
manufacture around the world, visiting and settling in ever cheaper locations across the Far
East, through much of Africa and Latin America to its present home in China.

Today this is a global industry embracing design activities, cutting and processing
operations, assembly, distribution and sales – all fuelled by a huge demand for
differentiation and personalization. This is an industry in which price is only one element –
non-price factors such as variety, speed, brand and quality matter. And it’s an industry
dominated by the need for high-frequency product innovation – fashion collections no
longer run along the old seasonal track with winter and summer collections. In some cases
the range is changed every month and innovation in information and communications
technology means that this cycle is getting shorter still.

All of this has shaped an industry which is highly networked across global ‘value chains’ and
coordinated by a few major players. Much of the ‘front’ end of the industry is about major
brands and retail chains while the ‘backroom’ operations are often small-scale
subcontractors often in low-wage-cost areas of the world.

Like so many industries it has become somewhat footloose and wandered from its origins –
leaving behind only a small reminder of its original dominance. Compared with countries
like India and China today’s European clothing industry is a small player on the global stage.
There are some exceptions to this – and they underline the power of innovation and
entrepreneurship.

Just because the dominant trends lead in one direction doesn’t mean that there isn’t scope
for someone to spot and deploy ways of bucking this trend. One such player was a young
clerk working in a small clothing retailing business in northern Spain. Frustrated with his
career prospects Amancio Ortega Gaona decided to strike out on his own and in 1963
invested his savings – the princely sum of US$25 – into a small manufacturing operation
making pyjamas and lingerie. In classic fashion he peddled (and pedalled – his earliest
transport was a bicycle!) his wares around the region and built the business over the next 10
years and then decided to move into retailing as well, opening his first shop in the north-
western town of La Coruna in 1975.

Things have moved on somewhat since then. Industria de Diseno Textil – Inditex – the
holding company which he established – is now worth around US$21 billion, double the sales
of less than a decade ago, and employs over 150,000 peopl. With over 7000 stores in nearly
70 countries this textile and clothing business has 8 key brand groups, each targeted at
particular segments or product types – for example, ‘Pull and Bear’ for children, ‘Massimo
Dutti’ for older men and women or ‘Oysho’ in lingerie. Best known of these is ‘Zara’ – a global
brand with a strong design and fashion identity running through both the clothes and the
stores in which they are sold. Its clothes combine stylish designs with a strong link to current
high fashion themes with moderate prices. As Lotte Freddie, fashion editor of the Danish daily
newspaper Berlingske Tidende, commented, ‘If you want a classic, Italianate look in tune with
current styles and at a reasonable price go to Zara.’ Zara’s successful growth is not simply a
matter of low cost or of standardization but rather of innovation, based on the idea of ‘fast
fashion’.

The company have become leaders by exploiting some of the key non-price trends in the
industry – for example, variety and product innovation. For example, over 18 000 different

©2016 Joe Tidd, John Bessant


2
clothing models are created and sold every year – this is most certainly not a case of ‘one size
fits all’ or of long-lasting product types! Ortega has taken the entire system for creating
clothes and built a business – and originally did so in an area which did not previously have
any textile tradition.

At an early stage in the development of the manufacturing business he moved back into
textile-finishing operations to make sure that the colours and quality of the material he used
to make the clothes were up to scratch. Not only did this give better quality control but it also
opened up the road to offering exciting and different fabric designs and textures. There are
now 18 textile-designing and -finishing operations in the group as well as the clothing
manufacturing.

A major part of the company’s success comes from a strong commitment to design – they
employ over 350 designers and make extensive play of this commitment. It’s a theme which
doesn’t stop with the clothes themselves but also extends to the presentation of the stores,
their window displays, their catalogues, Internet advertising and so on. Part of the
headquarters building in Arteixo La Coruna, Spain contains 25 full-size shop windows with
display platforms and lighting which allow the team to see what real store windows would
look like – not only under normal conditions but also on rainy days, at night and so on.
Another key aspect of Zara’s success is the flexibility which comes from having a very
different model for manufacturing. Around 2500 employees work directly in manufacturing
operations – but behind them is a much larger workforce spread across villages and small
communities in Spain and northern Portugal.

Once the new design has been approved the fabric is cut and then distributed to this network
of small workshops – and these represent an outsource capability delivering a high degree of
flexibility. Pre-cut pieces and easy-to-follow instructions are given to workers in what is still
largely an informal economy – and their output then flows back into the massive Zara
distribution centre like tributaries to a fast-flowing river. (This is not a small operation – the
centre has around 200 kilometres of moving rails on which the products flow. Highly
automated and with extensive in-line quality checking, the process transfers the incoming
pieces into production lots which are then allocated to a fleet of trucks for fast shipment,
mostly by air from the nearby airport at Santiago de Compostella.)

Needless to say this places significant demands on a highly flexible and innovative
coordination system which Zara have developed in-house. In this way they make use of a
model which dates back hundreds of years (the idea of industrial districts and clusters) but
use twenty-first-century technologies to make it work to give them huge flexibility in both
the volume and variety of the things they make. Where competitors such as H&M and Gap
have to start planning and producing their new lines three to five months before goods
finally make it to the stores, Zara manages the whole process in less than three weeks!

Their flexibility is also based on rapid response and extensive use of information and
communication technologies. At the end of the day as the customers leave their 950 stores
around the world the sales staff use wireless handsets to communicate inventory levels to the
store manager who then transmits this intelligence back to Spain as a feed into the design
order and distribution system. This gives an up-to-the- minute idea of what is selling – and
what isn’t, so the stores can be highly responsive to customer preferences – which colours
‘work’, which themes are popular, which designs aren’t hitting the spot. But it’s not just
following the market – Zara also push the game by making sure that no model is kept on sale
for more than four weeks – no matter how well it is selling. This has a strong impact on their

©2016 Joe Tidd, John Bessant


3
brand – they are seen as very original and design-led – but it puts even more pressure on
their ability to be agile in design and manufacture.

For example, an idea for a coat with a high collar and a metal ring to fasten it was born in
Zara’s design studio in the small city of Arteixo. Five days later the draft sketches,
themselves a result of feedback from store managers about fashion trends they were seeing,
had been converted into a physical prototype. A second pattern maker then took over and
working with a team of seamstresses and cutters worked the next 13 days to produce a
batch of 8000 coats. Their final 6 days in manufacturing were spent being ironed, tagged,
quality checked and prepared for despatch, moving from the logistics centre in Zaragoza to
Barcelona airport. By the next day a truck was taking them from J.F. Kennedy airport to
downtown New York to be sold in the Fifth Avenue Zara store, selling at $189. Total cycle
time, including transport and distribution, 25 days. This is not unusual; their fast
fashion model has been able to move from idea to store in as little as 2 weeks!

Another is exclusivity; their model is geared around small batch production in which only
a small number – for example, 25,000 of the coats – will be made. Selling out of stock is not
a problem since Zara store managers need to keep making space for newer items which
arrive twice a week from Spain.

As one analyst commented, ‘think of Zara not as a brand but as a very speedy chameleon
that adapts instantly to fashion trends’ (Anne Critchlow, Societe General analyst, quoted in
Wall St Journal, ‘How to make a success of fast fashion’, 7/12/16))

Case Study Questions

1. Is the Zara model sustainable? What would you do to preserve their edge over the
next 5–10 years, given that many other players are now looking to follow their
example? If you don’t think it can survive, give your reasons for why you think the
model is unsustainable and will fail.

2. You have been hired as a consultant to a small clothing manufacturer who wants to
emulate the success of Zara and Benetton. She wants advice on an innovation
strategy which takes the key lessons from these successful firms. What would you
offer?

3. Zara Home has just opened using the same basic business model and deploying the
same innovative approach as the rest of the business but in the home goods field. Do
you think it might succeed and why?

©2016 Joe Tidd, John Bessant


4
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"There's nothing wrong with me," protested Lampley.
"Let's hope not," murmured the ape soothingly. "We'll soon find out."
Another ape in white cap and starched white skirts pedaled with bare
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doctor.
"I can walk," contended Lampley.
"We have our rules," insisted the ape-doctor firmly but not
unpleasantly. "If you are cooperative it will be easier all around."
The ape-nurse smiled at the Governor, opening her mouth wide to
show her fangs. "You can sit, you know; you don't have to lie down."
Lampley seated himself on the edge of the gurney. The ape-nurse
pedalled vigorously; the doctor trotted alongside, consulting the
bulbous watch on his furry arm. The dial had no hands, numerals or
glass, only buttons marked, HOT, RUTTING, COLD, BANANA,
JAVA, RESET. "I don't understand," said Lampley.
"Don't worry," advised the doctor. "None of us understand. Just
remember there's nothing to worry about. We're here only to help
you."
"But I don't need help."
The two apes exchanged significant glances and the nurse picked a
flea off the doctor's thigh. "That's what they all say," commented the
doctor pityingly. "It's nothing to be ashamed of. The tempo of
uncivilized life is such it's a wonder more don't break under it."
"I—" began the Governor, and stopped. He could deny nothing.
They entered a white-floored room shaped like a tepee, with white
walls leaning together, coming to a point at an incandescent light
above. The nurse pedalled the gurney under the cone and rested her
head on her arms. Five other ape-doctors came through the shining
walls which closed unbroken behind them. "Good-day, Doctor," they
greeted in unison.
"Good-day, Doctor," replied the ape-doctor. "We have a most
uninteresting case here."
A short ape plucked at his lower lip and grinned at the Governor.
"Lucky you," he wheezed in a stage whisper. "He never discharges
the interesting ones."
The other apes laughed; even the head doctor had trouble
suppressing his smile. "Now, gentle-pithecanthropes," he said, "I'd
like to have your opinions."

An emaciated ape with a hearing-aid adjusted an ophthalmoscope


and squinted at the Governor. "What's its case-history?" he asked
gruffly.
"The usual thing: congenital logophilia, the ordinary childhood
disorders—inflammation of the gizzard, febrile larynx, minor
pyromania, swollen presence—distention of the id, a liberal murmur,
optical inversion, pathological increment of the epidermis, cancer of
the body politic. Nothing to corruscate a clinician."
"Mmmmm," muttered a muscular ape, balancing himself on his
knuckles and shaking his head soberly. "I don't dig these non-
arboreal climbers. Smacks of delusion."
"Now Doctor," admonished the head physician, "are you making a
diagnosis before all the returns are in? We haven't even started to
count the ballots."
"The polls aren't closed yet," the nurse raised her head to point out.
"That's a joke, see?"
A fat ape-doctor removed her cap and stuck it on one side of his
head. "How's his colostrum?"
"What about his colophon?" inquired an old, stooped, graying ape.
"I'm more interested in his collyrium," said the short ape.
"You're a card, Doctor," cried the fat ape and the muscular ape
together.
"Well, well," said the head physician tolerantly. "Fun is fun, but we
must consider the patient."
"Consider the patient," ordered the nurse sternly, retrieving her cap.
"Patients are a virtue, get them while you can, hyster in a woman,
prostate in a man," chanted the thin ape. "Let's get on with it."
"I see definite signs of softening of the hardening," remarked the old
ape.
"Pardon me, Doctor," protested the thin ape, "surely these are
classic symptoms of hardening of the softening."
"Weakening of the perspicates," muttered the muscular ape.
"Inversion of the fluctuates," amended the fat ape.
"Disconvection of the interregnum with complicated indications of
pronobis-paxvobiscum," said the jovial ape, scratching between his
shoulderblades.
"Are we in complete disagreement?" questioned the head doctor
cheerfully.
"Apesolutely, Doctor," confirmed the old consultant. "Apesculapius
and Hippocrapes confirm our capabilities."
The nurse whipped a corncob pipe with a long curved stem from
under her skirts and stuck it in the fat ape's mouth. The muscular
ape rubbed two sticks together till they burst into flame. The thin ape
handed over a pair of goggles. When the glasses were adjusted and
the pipe going to his satisfaction, the fat ape said, "Let the diagnosis
continue. Silence in the court!"
The jovial ape produced a compass and rested it on Lampley's knee.
"Shoot the works, cousin," he commanded.
The nurse sang in a growly voice, "The one shines least, the none
shines nest, but I know where the run shines in your vest—"
"Silence in the court!" repeated the fat ape. "Spin, cousin."

Lampley looked down at the compass, saw it had no glass. The


points were marked, FORTH, Forth Forth-Least, Forth Least by
Forth, Forth-Least; Least Forth Least, Forth Least by Least, LEAST;
Least by Mouth Least by Least, Mouth Least; Mouth _Mouth_ Least,
Mouth Least by Mouth, MOUTH; Mouth by Mouth-Best, Mouth-Best
by Mouth, Best Mouth, Mouth-Best by Best, Best-Mouth by Best,
BEST; Best by Forth-Best, Forth-Best by Best, Forth-Best; Forth-
Best by Forth, Forth by Forth-Best, FORTH. The magnetic needle
wobbled loosely. Lampley spun it clumsily. The head physician
pressed the studs on his watch. All the apes crowded in front of the
Governor so he could not see the compass. He knew when the
needle stopped, however.

"Incredible!" cried the old ape.


"Beautiful!" cried the fat ape.
"Scientific!" cried the jovial ape.
"On the button!" cried the thin ape.
"Haven't seen anything like it since I was an interne!" cried the
muscular ape.
"Very nice," said the head physician. "I take it we are agreed?"
"Unequivocally," said the nurse. "Wow! Let's go!"
"Acute epistemology," said the thin ape tonelessly.
"Chronic voracity," said the fat ape satisfiedly.
"Inflamed igloosensesisty," said the jesting ape happily.
"Dubious proneity," said the old ape solemnly.
"Delusions of humanity," said the muscular ape sadly.
"Delusions of humanity," repeated the whole college mournfully.
"Good, very good indeed," observed the head physician, swinging
from a trapeze and playing a xylophone with his toes. "Hold him
temporarily under observation—"
"No sedation, Doctor," warned the old ape.
"No medication, Doctor," enjoined the muscular ape.
"No inflation, Doctor," suggested the thin ape.
"No castration, Doctor," put in the jovial ape.
"No vindication, Doctor," added the fat ape.
"—pending release and discharge," concluded the head doctor.
"What about infection?" asked the nurse.
"Humanity is not contagious," they all reminded her together.
The practitioners took pomegranates, figs, dates, mangoes and
papayas from their jacket pockets and began munching them
earnestly. The nurse pedalled Lampley through the white walls. "Are
you ever lucky," she informed him chattily. "They might have put you
in a strait-jacket and fed you orally."
"But there's nothing wrong with me."
"Get tired," advised the nurse. "Your needle is stuck." She
dismounted. "Stay where you are," she said when he started to get
off too. "So long, cousin—don't take any wooden colonics."
The gurney moved on by itself, picking up speed. It careened
through dazzling corridors, down ramps, up inclines, through wards,
at such a dizzying pace he could see only the footrails of the beds
with their clipboards of charts. Doors flipped open at his coming and
swung back after him. Finally the gurney stopped so suddenly he slid
forward smoothly onto the floor. When he picked himself up the
vehicle was whizzing around a corner.
He was on a turntable, so nicely fitted into the floor that only a
hairline crack defined it. It revolved slowly past curious scenes of
men and women being cupped and leeched, poulticed with manure
or steaming tripes, packed in snow, offered acrid inhalents or foul
broths; of madmen worshipped or chained and beaten, of babies
deformed for beauty's sake and old people eaten for economy's.

When he stepped off the turntable he was in a pleasant but definitely


institutionalized room. An elderly man, derby hatted, blew patiently
into a mute saxophone. A woman with waist-long white hair, lips
drawn in sharply over empty gums, passed an unthreaded shuttle
across a loom. A girl, rocking evenly back and forth, smiled
knowingly, secretively. A bald man with dirty cheeks and smudged
scalp, his tongue caught intently between his teeth, lay prone before
a collection of posters, carefully painting mustaches on the faces of
women, blotting out the faces of men.
At the other end of the room the Governor saw his mother. She was
knitting slowly, diligently. Her arthritis, he thought sympathetically. He
went to her. "Hello Mother." He kissed her cheek.
She finished two more stitches before she spoke. "How are you,
Almon?" she asked placidly. "Isn't this a charming place?"
"You like it here, Mother?"
"Well, it isn't like being in one's own home. And of course they do
serve lambchops without the paper frills," she complained. "I
suppose it's all right, but I must say they look rather naked."
"But you're all right otherwise?"
"My eyes bother me, there's something wrong with the lights. The
food hurts my gums and I'm short of breath and I never can seem to
get comfortable clothes that aren't dowdy. And the newspapers are
full of horrors—"
"Yes, yes," he interrupted impatiently. "But they treat you well, don't
they?"
She put down her knitting. "It depends entirely what you mean by
that, Almon. If your poor father had lived no one would ever have
hustled me around the way they do here."
"Are they rude to you, Mother?"
"They certainly don't act as I should expect persons to act toward a
lady."
"They don't—they don't ... handle you roughly?"
"My dear boy! What a question. They wouldn't dare."
He sank into a chair. "That's good. It's all right then."
"I shouldn't go as far as to say that." She resumed her knitting. "They
read my letters," she announced in a loud whisper.
"What letters?" he asked.
"Now Almon, don't pry."
"I'm sorry, Mother. I only thought there might be something I could do
about it."
"Don't be ridiculous, Almon. What could a boy do about such
things?"
He was silent, despondent. "Oh, Mother...." He wanted to say that it
was too easy to dismiss all questions as having too many answers or
none at all—to say that the simplest questions, the ones apparently
most irrelevant or meaningless were least susceptible of reply. What
he wanted to say was true enough—or rather, it was true, but not
enough. There were no answers, yet everything was an answer of
sorts. "Oh, Mother," he said, "I don't know."
"Of course you don't," she agreed sharply. "Here, wind my wool for
me."
Obediently he picked up the strand lying on her lap and began
looping it around her outstretched hands. The yarn was kinked and
lusterless. "Where do you get your wool?" he asked conversationally.
She cackled. "Now dear boy, don't try to catch me on one as old as
that. I simply will not say from the sheep I count when I'm going to
sleep. I just won't."
"I'm sorry, Mother."
"Are you really? Truly contrite? Genuinely humble?"
"I—I suppose so."
"Oh, suppositions. Theories. Vapors. Hopes. Pooh. Gracious, can't
you wind faster?"
"Something seems to be holding the wool back."
"Nonsense! Oh, see what you've done, you clumsy boy! You're
unravelling my cushion."
"I'm sorry, Mother."
She hurled her knitting in his face. "Take him away," she screamed.
"He's a monster—can't you see?"

The other inmates threw up their heads and howled in unison. One
sufferer, naked to the waist, his distorted face set in a dreadful smile,
his hands stiffened into claws, ran into the room and danced around
the Governor. Two women, their streaming hair starched with dirt,
shrieked, "He did it, he did it. He's the peeping tom." A man
shambled in a circle, head down, muttering, "Womb, tomb, boom;
boom, womb, tomb; tomb, boom, womb."
Two sternly expressionless attendants led the Governor to the
elevator. "You are discharged for conduct unbecoming a patient and
a gentle."
"But I—"
"If it weren't for this," said one of the attendants coldly, indicating his
white coat, "I'd call you out myself, you cad."
"Don't demean yourself, brother," urged the other attendant. "He'll
suffer now."
A group of orderlies appeared. Those in front beat upon enamel
sputum dishes with hammers used to test reflexes. After them came
a number with dilators, tubes and other objects which they employed
as fifes and flutes. The color-bearer dipped his caduceus to the
ground while the band played the rogues' march. A doctor drew his
scalpel and cut the Governor's buttons from the cuff of his jacket.
The elevator doors opened. The clerk peeled off a white smock and
tossed it out. "Step to the rear of the car please," he urged the
Governor.

Lampley stumbled in. The elevator swished upward, then ran


backward for interminable miles. It stopped; mechanics with rubber
wrenches, paper hammers and cloth screwdrivers removed the steel
doors, replacing them with a glass one. The clerk moved the control
lever; the elevator rose again.
Once more it was in the shaft lined with porcelain-faced bricks. The
Governor noticed how meticulously they had been set in place, each
fitting so neatly against the next, no course of mortar thicker than the
one above or below.
The clerk left the door open and leaned against it as Lampley
wandered between the rows of grand pianos. The drops from the
stalactites tinkled as monotonously as before on the exposed strings
of the instruments. Plink plink, plink plink, plink plunk. It seemed to
him—he was by no means sure—that on his first visit the pianos had
all been identical. Now they were rosewood, mahogany, maple,
ebony. Some were enamelled a startling white, one gleamed in dull
silver, the varnish on another sparkled with crushed glass. He
paused before a grand of such modest finish and unobtrusive wood
that it commanded instant attention among more flamboyant peers.
The Governor sat down before it, striking a key with his middle
finger. Plink. What a work is man, he thought; I will my finger to move
and it moves—what incomparable engineering! Plink. He had
forgotten even how to play a scale; the stalactites could do as well or
better. Plink plink, plink plunk.
In imagination he played the piano with perfect mastery, without
effort, without barrier between conception and performance. The
exquisite music flowed from his fingers and laved the air. His heart
burst with exaltation. The power of his playing infected all the nearby
pianos; they exploded into the same melody.
Plink plink. Miss Brewster would have said primly, If that was your
ambition, you should have practiced. Hours and hours and hours
every day. Plink plink. And then Miss Brewster would not have
smacked his hands and when he thought of her when he was bigger
he wouldn't have.... Plink plunk. A stupid fancy.
He got up impatiently. Could that be the unicorn lurking in the
shadows? He walked slowly toward it. The creature showed no fear
of him, made no attempt to run away. Trembling a little, Lampley put
out his hand. The unicorn nuzzled his palm. Lampley touched the
golden horn, ran his fingers through the foamy mane. The unicorn
looked at him with its blue eyes; Lampley felt infinitely rewarded.
The unicorn was smaller than he had thought—as small as a pony.
They walked together between the pianos, the beast breathing
gently, the man reassuring himself of affection by rubbing the soft
coat. All the pain of struggle began slowly to drain from his body; he
knew he could be content to stay here.
Only when they were almost at the elevator did the unicorn throw up
his head, toss his mane and gallop off. The Governor turned to
pursue but the clerk, still leaning in the open door, stopped him. "It's
no use," he called, not unkindly. "You couldn't catch him unless he
wanted you to."
"But he ..." began Lampley.
"A whim," said the clerk. "They're all alike."
Sadly he entered the elevator. It was only as the door was closing he
realized the plinking from the stalactites had stopped as he touched
the unicorn.

CHAPTER 8
The elevator slid upward steadily through the white-tiled shaft.
Lampley, slowly recovering his calm after the loss of the unicorn,
caught glimpses of the activities in the various sub-basements. Men
were building a ship in one, laying the keel, riveting the ribs, welding
the plates. Higher, dynamos of all sizes were attended by midgets
who climbed and clung like flies. On the next floor hundreds of
seamstresses in grecian robes cut and sewed balloons, twisted silk
threads into heavy ropes, wove rush baskets and attached them to
the flaccid bags; on another he saw a congregation of worshippers at
prayer. There was a sub-basement that was a library, one which was
a toy factory, one where alchemists turned waste into gold. There
was a bakery, an automobile assembly, an iron foundry, a chemical
laboratory, a college, a mortuary. They rose through moving picture
stages, distilleries, warehouses, mill-wrights, armorers, perfume-
makers, silversmiths, glass-blowers, gem-cutters, machine-shops,
art galleries, a mint, lumber-yard, stoveworks.
Then came a series of vacant floors: bleak, void, stale. The elevator
moved much more slowly now, as though dragged down by the
emptiness, pulled back, hampered by the blankness through which it
was passing.
"About this fellow," said the clerk abruptly.
"What fellow?" parried the Governor. But he knew.
The clerk pulled out a plastic mask and slipped it over his face. It
was a replica of his own features, subtly altered, so that the
Governor was filled with sick terror at the sight of mouth, nose,
cheeks, eyes, superimposed on those which differed only enough to
be totally alien. The clerk stopped the elevator, opened the door.
Walls of rough stone towered on all sides. The Governor held back
until the clerk's steady stare forced him out onto the cracked, uneven
pavement. There was a sweetish, sickening, vaguely familiar smell
all around.
The clerk rubbed his hands together and then over Lampley's arm in
a gesture of appraisal and possession. To his disgust the Governor
saw the fabric of his jacket crumble and dissolve. His jacket and the
shirt beneath, leaving his skin and flesh bare and vulnerable. The
touch of the fingers was loathsome but he was unable to draw away
from it. The clerk brought his face close, so that Lampley saw where
the mouth of the mask, the eyeholes and nostrils failed to match
those beneath.
"This man, this convict, this felon. You couldn't find it in you to
reprieve him?"
"He had a fair trial," mumbled Lampley.
"A fair trial," repeated the clerk. "The jurors were gods, the judge was
justice incarnate?"
"The judge was properly assigned; the jurors were members of a
qualified panel."
"Your prerogative...?"
"My prerogative is to temper justice with mercy."
"And you were unable?"
"He murdered his father. He strangled him, he smothered him with a
pillow, he stabbed him in the heart, he poisoned him, he shot him
with a pistol; he killed his mother."
"Are you sure?" asked the clerk, puffing out the cheeks of his mask.
"There were witnesses, there was circumstantial evidence, he
confessed. He clubbed his mother to death, he cut her throat, he
held her under water till she died."
"Ah," sighed the clerk. "Ah.... Then no reprieve was possible?"
"No reprieve was possible," replied the Governor firmly.
"So be it," said the clerk.
Two pale men leapt from their hiding-place and bound Lampley's
hands behind him. They led him through an archway into a
courtyard. A masked executioner came forward and knelt at his feet.
"I ask your forgiveness, noble sir, for what I am about. The deed is
not mine, I am but a servitor."
The two pressed him toward the block and forced his head low. The
semicircular hollow was cunningly contrived to fit any neck. The long
gashes in the wood pulled and sucked at his throat. The executioner
raised his ax and brought it down. Lampley's head rolled in the
sawdust beyond the scaffold.
The two seized him and bound his arms. From a distance he heard
the chaplain's breaking voice. They hustled him between the stone
walls and dragged him up the gallows' steps. The hood was dropped
over his head, then the rope. He felt the hardness of the knot against
his left ear. There was no spittle in his mouth. They pushed his legs
firmly into place over the trap. He heard the snick of the knife as it
cut the cords. He swung in a narrowing circle.
They wrapped the thin cord deftly round and round his body,
pinioning his arms cruelly to his sides. They slid him down the incline
beneath the guillotine. When he was suitably in place the blade
descended swiftly.
They seated him in the chair and strapped the electrodes to his leg
and head. They pushed him into the sealed chamber and watched
through greedy slits while the cyanide pellets were released. They
tied the bandage over his eyes and stepped back just before the
fusilade.
He lay broken on the rough stones. He remembered the touch of the
golden horn and began breathing again. He remembered the island
under the earth and his heart resumed beating. He remembered the
young girl in the hotel and he could see and hear.
He rose slowly and viewed his bodies after their agonies. He walked
past the bullet-chipped wall, the gas-chamber, electric chair,
guillotine, gallows. His feet scuffed the bloody sawdust by the
headsman's block.
The elevator stood empty and unattended. He went into the car, the
door closed behind him and the car shot up. Again it slowed as it
passed the darkened tiles in the upper reaches of the sub-
basements, so that it was once more moving sluggishly as the lobby
and the hall above came in sight. It stopped amid the elegance of the
third floor, and the doors opened of themselves.
The elegance had become shabby beyond restoration. The thick
carpet was worn to the threads. Woodwork and panelling no longer
contrasted, they were the same uniform color of age. The chairs and
sofas were ripped and tattered, their stuffing protruded like ruptures.
The doll was in the same place and position; a pendulous belly and
two elongated breasts had been sewed on with coarse stitches.
The iron railing around the quadrangle leaned outward; some of the
balusters were missing. The concourse below was gone; he looked
down on the dingy lobby, past the visible portion of the second floor
hiding the reception desk. He turned away; the doors which had
borne the esoteric numerals were blank, their panels warped and
sagging.
He searched for the wide staircase to the second floor. His
orientation had changed, he turned left instead of right, or right
instead of left. In lieu of the grand flight he came upon a mean
descent, twisting every few steps. The boards creaked and quivered
under his weight.
His room was that of the first door he opened. His handbag rested
on the foot of the bed, the wax figures of the bride and groom stood
stiffly in the cloudy glass bell. Lampley tarried before the mirror,
adjusting his sleeves, assuring himself there was neither lint nor soil
on his jacket. He picked up his bag and gave a conventional last
glance around, though he knew he had brought nothing more into
the room.
He shut the door and tried the handle; it did not turn. Yet surely it had
been closed before he went in to retrieve his bag? All the doors on
the hall were shut, shut and locked and untenanted, their invitation
withdrawn. He reached the narrow stairs. From these there was no
landing halfway down, nor did they lead to the lobby. They ended at
a solid door with a handle instead of a knob. He pressed the latch
down doubtfully, anxious to be out of this blind end, unwilling to go
back up and start down again.
The refrigerator room which had been so cold was now warm and
stuffy. There was no igloo. The game and fish were gone, the brine
barrels were tipped over, gaping unconcernedly. They gave out no
smell save that of old wood. The sawdust had weathered. Most of
the meat hooks were empty; from a few hung the bare skeletons of
beeves and sheep and swine, the surface of their bones dry, cracked
with long, thin crevices, crossed with fine hairlines. He recognized
the buffalo because of the peculiar shape of the skull and horns lying
on the floor below the carcass.

He pushed open the massive door to the kitchen. The old man was
carving a set of chessmen out of bone; several finished pieces,
rooks, knights and a queen stood in a row before him. In his thick
fingers the other queen was taking recognizable shape. All had the
same distortion as the plaster figures in the wall. He looked up at
Lampley without interrupting his work. "A hard time, hay?"
The Governor nodded. The old man jerked a thumb over his
shoulder. Lampley followed its direction into the eating room. The
idiot was trying to spoon soup into his mouth, spilling most of it,
sputtering the rest into slimy bubbles. The clerk, his eyes closed, had
one leg hooked over the corner of the table. The woman smiled at
him, showing the gold tooth. There was no sign of the girl. Lampley
sat down in the old man's place.
The clerk's eyes opened; the mask was gone. He pushed a hard
crust of bread across the table. Lampley picked it up and turned it
over in his fingers. "I'm going," he announced to them.
The clerk yawned. "I'd be afraid myself," he confessed.
"Afraid of what?" asked the Governor.
The clerk shrugged. "So much," he said hazily. "Everything." He
smiled doubtfully.
"There's nothing to be afraid of," said the Governor boldly.
The clerk shook his head and left the room. The idiot gurgled and
sputtered over his soup. Lampley reached for the corner of the
napkin tied around his neck and wiped the drooling mouth. He took
the stale crust and broke it into the soup. When the bits were soaked
he used the spoon to feed them slowly to his son.
"It's no use," said the woman. "You can't teach him."
"I wasn't trying—" began Lampley, and let it go. "Where is your
sister?"
She wrinkled her forehead. "Sister?"
He had asked the girl if she were this woman's daughter; she is my
sister, she had said, and then something horrible—what?—
happened. He could not be mistaken. "The girl who was here."
"I was the only girl here. There was no other. There never was
another."
He looked at her searchingly; her face showed no disingenuousness.
He finished feeding the defective and wiped his face again. He got
up and went over to the woman. She reached out her hand to touch
his. He bent and kissed her. Then he kissed his son.
In the lobby the clerk was behind the desk, idly searching through
the empty pigeonholes. "Nothing for you," he said without turning
around.
The Governor went through the entrance and down the steps into
the afternoon sunlight. When he came to his car he reached in his
pocket for the keys. His hand touched his watch. He pulled it out and
saw it was running, the sweep-second hand revolving inexorably. He
slipped it on his wrist and unlocked the car door.
Before getting in he glanced up and down the street and back at the
hotel. He had never seen it or the town at any time in his life.
THE END

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