Instigating innovation: Where to start


I am currently focused on strengthening the manufacturing sector. Increasingly I am speaking at meetings, events, in boardrooms and in front of post graduate students about innovation. In this more engineering-minded world people are asking me the whole time for a few tips to get innovation going.

  • “How about an idea box?”
  • “How about canvassing ideas for a new product design from our customers?”
  • “How about rewarding our engineers with a profit share if they design a new product?”

The truth is, many manufacturing enterprises, especially the smaller ones, are too sliced into specific functions. Design designs, manufacturing manufacturers, salesmen become creative about delivery dates, and accounts, well, they count costs. This hierarchy makes information flows about potential improvements, new market opportunities and some old tricks that could become useful again very difficult. The cost of coordination in these enterprises are very high. In these silo-based organizations the costs of finding information, new signals and new ideas from outside the organizations is extremely high, and in general, these organizations struggle to learn.

A second problem is that most smaller manufacturers are mainly focused on product innovation. Which does not mean being focused on knocking the socks of their customers with frequent improvements or brilliant designs. Unfortunately many of the more traditional manufacturers are focused on how to get the price down or how to sort our quality issues. Which is actually a kind of process improvement, except that it is a very narrow kind of process improvement. The challenge with this incremental approach is that you can at most only grow and develop as fast as your customers can articulate what they want. Competitors or substitutes can also upset market relations by coming up with novel solutions that an incremental approach struggles to generate.

A third problem is that innovation is only done when customers demand it. It is passive. It lives in bursts to get things right, and then it settles into a problem solving mode until a next customer makes some unreasonable demands.

What many manufacturers lack, especially those in the more traditional sectors like metals and engineering, is a focused effort by top management to build an innovative culture that is actively trying to find product, process and business model improvements. It must be focused internally, in order to constantly rethink the business and its core processes, and it must be focused externally, to what customers and competitors are doing. The really good companies are also looking beyond current markets and competitors to new technologies and how they might shape the future.

This far I have addressed a business perspective. But research organizations, technology transfer centres and industry support centres can also get trapped in a low innovation culture.

I am now working with a few industry groups and research and technology centres to find out how these organizations can move beyond “catching up” and responding to change towards anticipating what is next. It sounds really simple, but by simply mobilizing more and more people in the organization to start searching for what’s next has already yielded amazing results in a short time. Maybe I am over optimistic, but already I can sense the innovation cultures change in these organizations as more and more people become involved in searching for possibility.

A quote that is attributed to William Gibson goes “The future is already here – it’s just not evenly distributed”. Step one is get more people involved in searching for what is already here, it is just not recognized inside the firm or industry.

2 Responses to “Instigating innovation: Where to start”

  1. Innovation as cultural as opposed to innovation as a technique or function | Shawn Cunningham's Weblog Says:

    […] innovation: Where to start shawncunningham.wordpress.com/2015/08/24/ins… […]

    Like

  2. Goran Says:

    I enjoyed reading this. Problems are well described.
    In addition, if we observe very small companies which even do not have organizational structure with separated functions, the rest applies to them, too – focus only on product innovation, only when demanded (in our area there is a number of such companies, so them may also be in focus of research).
    Yes, companies are mostly focused on product innovation and it mostly happens when demanded by customers (by customers, the producers often mean wholesales and retails buying from them – therefore seen as buyers – rather than final consumers which should be in focus of market research – the impression is that power of wholesales and retails is mostly based on proximity to final consumers/buyers in terms of access to information about their needs and in terms of possibility to influence their purchase decisions).
    I also agree about importance of innovative culture that does depend on top management. However, when innovations are discussed, discussion is often focused on how to engage employees. Examples of questions / ideas in the weblog are also focused on employees, not owners/top management. On the other hand, without their decisions and implementation of those decision, innovations will not happen. The key word may be – motive. I remember one of training sessions organized within the project where trainer made very good presentation of possible results achieved by process innovation (he showed a video of workers producing cakes (sweet example, indeed) and how just reorganization, in fact more specialized work, resulted in significant improvement of production with same resources – same number of employees and same machinery. And you could just see counters in their eyes starting to roll. After that session several applied for voucher support to improve production processes. Same resources = no need for investments and no increase of costs, and increased production = more incomes / profit (if they can sell additional quantities, but that is another story), this may be the motive for top management to start innovating processes.
    Also, attention should be paid to “operationalization” of innovations – what happens when a good new idea is born, how can the company absorb it, turn it into something profitable. Properly presented, this may also be a motive for top managers.

    Like


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: