Despite the growing recognition that innovation is the only sustainable source of growth, competitive advantage, and new wealth that Arthur D. Little survey of 669 international business executives found fewer than 25 percent of companies consider innovation performance is where it needs to be if they are to succeed in a competitive marketplace. Having tried endless array of choice, business leaders now accept the company offer innovation as a key business discipline, just as in the past they adopt procedures to quality, planning and management.
Of course, innovation is not a new discipline in most organizations. But the old ways, even those who may have worked in the ’80s and’ 90s, are no longer adequate. Companies across the board conduct exciting experiments to reinvent the way they live in the future, because “business as usual” has not produced the desired results.
Given the torrid pace of technological and global change, commoditization of product lines and industries, and convergence programs, companies are literally having to reinvent how they reach the all-important task of “inventing the future.” Considering the number of companies and their innovation strategies forthcoming book, I believe that the winning companies will embrace the following four essential principles of managing innovation in the new century
Principle No.1 -. A company’s approach to innovation will be complete. One day in l977, an engineer at Canon put a hot soldering iron a little too close to the ink syringe. The heat boiled a small amount of ink in the needle, increase it to gas, which pushed the ink out of the needle tip. The result of this accident was a breakthrough Canon bubble jet printing.
At Pfizer Pharmaceuticals, scientists try to produce a drug that would stimulate the receptors in the human heart ended stimulate receptors in other parts of the human anatomy, giving rise to impotence wonder drug Viagra. NutraSweet, an artificial sweetener, was the research chemist working in wound treatment licked his finger to pick up a piece of paper and took extraordinary sweet taste.
While spending millions and even billions of dollars annually on research, most companies innovation successes come about primarily by accident. And while serendipity will always play a role in innovation, most companies approach their innovation process in stages, haphazard fashion that is anything but comprehensive. This can backfire as Gillette discovered
Gillette powered through the last decade, largely on the strength of breakthrough products :. Sensor. Introduced in l990, a new shaving system maintained exemplary control with no fewer than 29 patents and men from Jakarta to Peoria to Paris raved about exposure to moisture. Despite selling at a hefty price premium, Sensor outsold its nearest rival ten to one. Rational waste time after the launch of the probe, Gillette began development of the offspring of the probe, MACH3, which was introduced in l998.
But MACH3, but hit in North America, do not have the same effect on revenue growth or stock price for Gillette. Super-premium products sold poorly in economically depressed Asian countries, growth stalled, and suddenly Gillette had been mentioned as a takeover target. Before laudatory Wall Street analysts began focusing on here hidden weaknesses Gillette is :. … Inertia, inefficiency guilty of blunders inventory and receivables, a Golbergian structure cobbled together over years of acquisitions, it underperforming divisions
The lesson of Gillette’s sudden reversal of fortune is this: Although the findings are as Sensor useful, innovation will be available in all areas of the company. Today, the practice of innovation is generally similar to how companies approach quality in early 1980. In those days, the quality of the department – products were checked before they were sent. Now, quality is the responsibility of everyone in the organization. It has become systematized: “It’s like we do business around here.” Today innovation is still confined to a few departments – mainly R & D or marketing. New ideas are almost always directed from the top down, rather than coming from the ground, from suppliers or from customers. But we are rapidly entering the era where innovation, needs to become everyone’s responsibility.
For example, the ongoing success, a small but growing number of companies are making innovation as much responsible for procurement, operations and human resources, as it is for new product development or marketing. It is not just a concept to fall into the advertising business and marketing, it must be part of the DNA organization. This deep commitment to innovation as a core competency does not preclude a company buys a smaller start-ups as part of the target. B & D (buy and develop) is quickly taking its place alongside the R & D (research and development) as part of the comprehensive approach of the company. But the growth in purchases is not a substitute for deep-seated commitment to home-grown innovation, if the acquisitions are to bear fruit.
The only thing that separates you from your competitors are the skills, knowledge, commitment and innovative skills of your people. To win the competition game, every business must strive to provide customers with a value proposition that is noticeably better than the one you offered yesterday. To win, companies must respond to newly emerging needs of customers with well designed products and services and business models that assume these needs. They must employ new technologies that reduce the cost of doing business, and allow for greater speed and customization.
For these reasons, innovation can not be confined to one or two departments or farmed out to an elite group of star performers. But must permeate the entire company, and it will encompass new products, new services, new methods, new processes, new business models, and pursue new markets. It will be complete
Principle No.2 – .. Innovation must involve organized, systematic and constant search for new opportunities Back in the early 90s, AT & T top brass allowed small unit Mammoth planning department to call themselves the opportunity Discovery Department, or ODD for short. This band of maverick thinkers took it truly odd task of shaking up thinking Giant Company. One day in l995, members of the unit wore a sandwich board outside the important meeting which read: “What if the long distance were free”
Although the question was dismissed as “ridiculous and inappropriate” at the time, today long distance AT & T revenue is declining so fast that the company may sell off its long distance business in order to pursue the faster growing parts portfolio. Moral: seems irrelevant to the question of the day may soon become a threat tomorrow – or opportunity
What methods do you and your company work to identify changes that could spell doom – if appropriate action is not taken or boom, if they. are. The company innovation is the core competence, certain systems and practices in place to promote a deeper understanding of the social, demographic and technological advances. Delphi Thermal Systems, Westport, NY division of Delphi Automotive, the Futures Council. . Eastman Chemical in Kingsport, TN, has formed a think tank to monitor the development and ask searching questions as: What this development for us? How can we take advantage of them? What threats are on the horizon that we must act now if we are to turn this change into an opportunity?
While such questions are usually the purview of management, the pace of change today requires wider participation. Generate opportunities spotted team allows people from all functional areas and all areas of the company to self-Select for participation.
Beyond just moisture data such teams can be helpful in discovering hidden opportunities, and “determined criteria” that could prevent the survey from the traditional departments. Creativity is valued in such teams, and is allowed to flow freely. Successful innovation means more than just hatching ideas. It means being able to go to the new solutions and champion them into specific results that create tangible customer value, improve processes, and build new opportunities. Creativity and passion needed at the beginning and at every stage along the way to deal with bureaucracy and inertia. From the smallest add “bet the company” mega-product, takes the ideas of the commitment of the people to bring them to fruition.
Futures councils or “opportunity SWAT team” as they are sometimes called, will not guarantee you’ll be the first mover in the trend. They will not guarantee that you will spot intermittent. What they will do is provide early warning for imagination and innovation and creativity and dreaming to become part of the fabric of an organization where there was none before. The trick then is to keep the momentum going to sustain the interest of
Principle No.3 – .. Companies must take the innovation process all Today the vast majority of agencies do not T pay their people to innovate. In fact, they do not even expect them to think! Almost two-thirds of 641 managers and hourly workers surveyed by consultant Kepner-Tregoe Princeton, New Jersey, said their companies do not use even half their ingenuity. More than 70 percent of their organizations to “slow moving car” blaming the situation on the failure to take personnel decisions and a lack of training or reward. Many jobs have actually been designed to prevent the thinking part of the whole, and not just entry level jobs either. Then, in the midst of crisis, employees are asked to suddenly be creative, to “think outside the box,” and management is underwhelmed with the results.
In the innovation economy, this dormant creativity will be tapped. Unleashing the potential of people to solve problems and create opportunities will be the first to survive. Teach people how to “work the system” in the organization, and to champion their ideas implemented solutions is quickly becoming a real job prospective training departments.
Several companies have known this all the time. Akio Morita, founder of Sony chairman, thought the company would never rise to its potential if all thought was left to management. “Everyone in the company should contribute,” Morita wrote in his book, made in Japan, “and for lower-level employees their contribution being more than just hard work. We require all of our employees make their own mind.”
Beyond rarely used suggestion system savings ideas reasons most companies have no organized means to stimulate or harvest good ideas on the main resource, their people. Not so for companies that are architected for continuous, all enterprise innovation. Some plants Dana Corporation get 3.5 ideas per month, per employee, with a 75 per cent implementation rate. At Disney, the three annual Gong Show, where everyone in the company can pitch a new concept, is a platform where retail formats of the company was first proposed by an employee. The London-based Virgin Group, a flight attendant who does not like the way she was treated in planning her own wedding, which brought Alisa PETCHEY to throw the idea through the company to speak up Program.
not all the ideas that people come up with will be useful. Many will be redundant, self-serve, and totally useless. But do not have an organized method for harvesting ideas is tantamount to erecting a billboard at the entrance of the company announced, “If we had wanted your ideas, we had asked for them.”
Principle No.4 – Companies must continually work to improve the climate for innovation The word culture is generally used to describe the company’s values, traditions, priorities and ideology .. Culture company can the center-spread service to their ethics, “go the extra mile for the customer,” or fierce commitment to quality or engendering loyalty “the company way,” but the climate may stifle innovation by fostering too much loyalty and unwillingness to do mistakes or take the risk
To assess the climate in your business ask yourself these questions :. What happens creative, out-of-the-box Mavericks in your company? What happens when someone fails? How many employees say, “We want you to take risks, and we want new ideas bubbling out. And, by the way, we also want to make your numbers, and we do not want any embarrassing mistakes.” Unfortunately, only the second half of this message gets communicated. In the first half of the year falls on deaf ears.
There are at least three possible answers to “failure.” You can: a) to cover up failures and refuse to admit it. You can b) admit mistakes, assign blame, or c) you can accept failure, strive to learn from, and share learning broadly. Innovative companies are above all, learning institutions. They realize that the program is directly related to how open recognition failed effort, and what happens to them in connection with the “failure” tells all about who ventures out in the future.
unleashing innovative climate has little to do with sending employees to Rah-Rah creativity workshops. It has more to do with how “innovative activity” is regarded by the management – goals it is given the role it takes in the collective conscience of the organization and people’s views of what behavior management really expect
climate. is “feeling in the air,” you get when you visit the company. The climate created by the practices, methods, and awards. If the climate is favorable for innovation, you sense that everyone is eager to progress the agency – to reach the stage that has never been met; in other words go toward a specific stretch goals, whether it is a new product, a new business, or open new markets. The organization is in a position to become, rather than a state of being. It is to create the future rather than to control the past.
Setup with a favorable climate for innovation is one that provides a context for people to work in groups, teams, departments and units without boundaries or fear. And where innovation is actually a process of solving problems, this informal network can not be limited to internal sources. A team of researchers at Rensselaer Polytechnic Institute (RPI) in Troy, NY, conducted a detailed field interviews with the team involved in such breakthrough projects that GE digital X-ray, digital light Texas Instrument’s projector, hybrid vehicles, GM IBM silicon-germanium devices and biodegradable polymer is DuPont. The study found that informal networks were crucial in all 11 of the revolutionary tasks. The nets were not confined to R & D community, but operated between R & D and business units, and between R & D and outside constituents: customers, suppliers and government agencies. These contacts helped provide early validation for the potential of the idea and create political and financial support. They helped also to provide access to limited resources, friendly customer and government funding.
new century promises to bring more changes, more complex and more competitive. Customer expectations and Wall Street will continue to rise. But companies that pay attention to strengthen this core competency have nothing to fear -. And all to get