By Lionel Wijesiri
Last week, we studied about Kaizen and today we venture into the concept of innovation. At this point, you might ask, “Why? Isn’t it the same thing you are talking about?”
No, it isn’t. At the end of the article you will understand clearly why it is not so.
We all know how essential innovation is to business success. If Apple Corp. had not innovated, we would not have iPhones. If Microsoft had stopped innovating when they released DOS, we never would have seen Windows operating systems. If manufacturers had stopped innovating, we would all be driving Model Ts and calling each other on candlestick phones that need operator assistance; there would be no television to watch and you wouldn’t be networking with Facebook or Twitter because the Internet would never have been created.
So, if innovation is so important, why do so many companies spend all their time making tiny process improvements and watching their competitors steal their customers with innovative new products and services? Clearly, the problem is not that business owners and managers don’t see the need for innovation. Many just don’t know how to encourage innovation. However, most actively discourage innovation - not on purpose, perhaps, but very effectively.
How can an organisation help foster innovation? And how does a large organisation deal with entrepreneurs when they are on the inside?
According to Gifford Pinchot, a Harvard academic and expert on innovation, the answer is to appoint and foster what he calls ‘intrapreneurs’ - people who focus on innovation and creativity within the organisation. Supporting this intrapreneurial behaviour is often the best way to promote company-wide innovation. But this debate has yet to trickle down into our typical business organisations.
This is important, because across the country we are faced with a new business reality. It is one in which networks and relationships are facilitated online and collaboration is the norm. In this new reality, people entering the workforce expect a more fluid hierarchy and a greater level of autonomy. It is part and parcel of an economy that is increasingly dominated by knowledge and where businesses are reliant on the flow of information. In this new business reality, innovation is more important than ever.
Chris Adams, one of Microsoft’s graduate trainees said in an interview, “All the people I work with ask questions about what we are doing, how it is being done and whether it could be done better. We are not afraid to challenge the status quo.” However, this necessitates new operational systems for managing a worldwide organisation to help intrapreneurs thrive. Intrapreneurs are eager to see change and progress, and if they are held back, they can quickly become disenchanted.
Systems and processes, therefore, need to be designed to channel that energy into a meaningful reality. But many organisations still fail to grasp the importance of providing the infrastructure to capture the great ideas that intrapreneurs have.
The conventional wisdom of recent times has been captured in the three Ds: De-bureaucratise, de-layer and decentralise. They help deliver the accountability, transparency and efficiency that make a business run effectively. These processes can at times be cumbersome and inhibitive, but they can also facilitate the work of intrapreneur.
An organisation’s culture is decisive in creating successful innovation. A culture is delivered by leadership, but also by the structures and procedures that are put in place.
How do business leaders create a culture of continuous innovation? First, they must actively seek to understand how events, decisions and actions affect not only their own company, but the rich complexity of interdependencies within their company and between their company and the environment in which it operates. In this way, business leaders gain a full and accurate understanding of the bigger picture. They are able to see around corners and anticipate opportunities and challenges before they happen. What is more, by sharing and discussing these insights with others within their companies, they highlight the importance of learning and listening in order to foster innovation.
Second, business leaders focused on innovation appreciate that playing it safe or taking it slow just doesn’t make sense in today’s often unpredictable global environment. We live and work in an era of instant messaging, social networking and omnipresent wireless communications. Real-time competition is the reality and complacency is never an option. As a result, business leaders who want to continuously propel innovation create a sense of urgency within their organisations. Through a strong and vibrant vision, they strive to build excitement about the future. In doing so, these leaders create an atmosphere where employees are anxious to exploit new possibilities, to experiment and to bring plans to fruition.
Third, leaders who successfully cultivate innovation don’t solely look at a handful of people in research and development to come up with new ideas, products or services. Instead, they actively seek out people from across and outside their organisations and industries. In this way, they continually acquire new perspectives, gain new experiences and demonstrate to their employees and co-owners the value of curiosity and a fresh outlook.
Every organisation has the capacity to become innovative. In other words, innovation is not limited to start-ups or elite research labs. Every company is capable of renewal — renewal that changes the rules of the games, that uncovers opportunities and that capitalizes on new possibilities.
Although most management teams know that innovation is the lifeblood of all growth companies, surprisingly, they forget the innovative process and culture that built their original business. An innovation culture leads to growth, jobs, and even envy from your competitors.
If your innovation engine has stalled, here are three basic actions you can take to get back on the right track:
Get cozy with your customers.
Spend time with current and prospective customers during their shopping experience. Ask lots of questions and learn to listen to their frustrations. Every challenge during the sales process is also an opportunity to build a better business.
Empower your team to take action.
Make sure all of your employees feel empowered and are incentivized to bring interesting insights to the table. Being a great business leader requires the ability to recognize others’ strong ideas and foster them.
Execute your ideas fast, revise them often.
While we may all believe that our ideas are unique, competitive markets usually do a good job of creating new and innovative ideas, sometimes in multiples. Learning by doing, hitting the market quickly and revising the product with customer input, will help to push the creative process and keep you a step ahead of more conservative competition.
Embracing these three concepts will help you to more effectively translate customers’ needs into new capabilities, products and services. Employees will feel empowered, customers will see new value in your business and accelerated business growth might just follow.
The companies found to have the strongest innovation track records can articulate a clear innovation ambition, have struck the right balance of core, adjacent and transformational initiatives across the enterprise and have put in place the tools and capabilities to manage those various initiatives as parts of an integrated whole. Rather than hoping that their future will emerge from a collection of ad hoc, stand-alone efforts that compete with one another for time, money, attention and prestige, they manage for ‘total innovation’.
Kaizen versus innovation
Now, about Kaizen versus Innovation! Innovation is usually large scope change, Kaizen is the small continuous change demanded daily. Examples of innovation would be exploring new markets, or new products, whereas Kaizen would look at feedback from salespeople about the particular options and quality of the delivered product and make a plan for improvement.
The question is not innovation or Kaizen, but innovation and Kaizen. An improving business cannot have one without the other; Kaizen when combined with innovation will improve a company’s strategic agility, enabling businesses to rapidly exploit new opportunities and maintain quality and stability at the same time. The rule of 72, dictates that if you improve at 1% per day – compounded – then in 72 days you will have doubled your productivity.
(The writer is a corporate director with over 25 years’ senior managerial experience. He can be contacted at firstname.lastname@example.org)