Innovation Begins At Home

by BILL WADDELL

A few months ago I launched a one day blitz consulting service in which I would spend one long, intensive day in a company giving them a top to bottom review and provide feedback concerning their biggest areas of opportunity.  It has been a great experience largely because it puts me in touch with a lot of companies that cannot afford a major consulting commitment.  It also creates a great chance for me to make some observations about a few common weaknesses - things that seem to be askew with just about everyone.

The most remarkable shortcoming I am seeing is the typical management view of innovation - that universal buzzword we have all grown tired of hearing.  It is obvious that our common human trait of being able to see everyone else's shortcomings with perfect clarity, but cannot see our own with the most intense magnifying glass is at play.

In the course of the day I always ask top management to list the most significant innovations they have made, or are working towards.  The replies I get inevitably center on product engineering and the factory floor.  They are looking for the engineers to dream up a product technology that, in one fell swoop, reinvents the product, redefines the market, propels them years ahead of the competition.  And they are looking for their lean initiative to instantly make their workers into production machines that are defect free, laboring at half the price, and never wasting a cent of support costs.  In short, their view of innovation is for the value creating end of the business to perform miracles.

When I correct them and say that, no I am not asking abut those people's innovations - I am asking about management innovations, the room goes silent.  I want to know what they, as the management team, are doing in a radically different and better way that is transforming the business.  At best, I hear about a minor organizational change, a new computer application, or the current marketing campaign.  On the whole, however, I find that managers are staying well within their comfort zones, and expecting change to come from everyone else.

It is more than a case of 'what is good for the goose is good for the gander'.  The management gander had better get on the transformation bandwagon or its goose will soon be cooked.  The results of the product development process, and the outcomes on the factory floor are not independent of management - they are the direct result of management.  Keep managing the same way and you will get exactly the same results from the engineers and the factory.  Transform how the business is managed, however, and get radically different results.

Accounting, the core logic of the organizational structure, performance metrics, how capital investment decisions are made ... these things are the drivers of outcomes.  And they are the areas most in need of innovation.

Barrack Obama recently said that he wants to change our culture from one that rewards playing games with numbers to one that rewards making things; he wants our 'best and brightest' to engage in the scientific innovations that will propel the economy to new heights.  I suggest that the best and brightest also work to innovate management, rather than spend all of their time working on the next generation of Twitter and Ipod.  A 21st century manufacturing management theory will pay a lot bigger dividend than a singular focus on technofads.

Comments

[Dan Markovitz]

Bill,

In a Fast Company article on Toyota, Charles Fishman wrote that, "a typical Toyota assembly line in the United States makes thousands of operational changes in the course of a single year. That number is not just large, it's arresting, it's mind-boggling. How much have you changed your work routine in the past decade?"

I don't think he was asking that question just about assembly lines and factories. To your point, how often has management tried changing the way they manage? How often have they tried to improve their own processes?

It's much easier to focus on "the other": other people, other machines, other processes. Doing something different oneself -- now that's hard.

[Scott McNamara]

Bill -

FANTASTIC blog. I find this to be particularly applicable with the majority of larger, more patriarchal companies. While in their marketing, you would think they are the most managerially-innovative company, once you peel back the layers, you find the management rot.

We often hear that Six Sigma/LSS "stifles innovation." I think by impregnating management with a lean/radical flavor of innovation, improvements will reverberate through the entire organization.

This upstream implementation will affect everyone downstream.

[Roland Scherbel]

I've enjoyed reading your blog for several months now. Have any of the companies you've visited or heard about had a good answer for your question? I consider our company one that is continuously improving, but I don't think we would have a great answer for you in regards to improving how we manage. I'd love to hear some examples that others have successfully implemented. Keep up the good work.