Uniqueness in the Eyes of the Customer…

I recently sat in a bidder’s conference where each of five companies were asked to give a 30 minute presentation on their organization and it’s capabilities. Each group gave a glossy PowerPoint presentation ranging from 18 to 20 pages.

The participants used all the appropriate buzzwords and graphics. They were all working on lean techniques, they were all working on six sigma; all had hired black belts who were busily training greenbelts and mentoring programs.

Not surprisingly, they all were using similar equipment; had similar plants and information systems.

All the participants gave excellent presentations. There was only one thing missing…differences.

After almost three hours of “me too theater” they had successfully defined themselves as a commodity. The only thing left was to negotiate on was “price.”

We need to remember that we don’t compete on what we have in common; we compete on differences – on what we do better. It is what makes us unique.

The programs each company presented were important, but we need to remember that lean, six sigma and like programs are critical tools, but they are threshold events – it’s what gets us in the game; it’s not the finish line. These initiatives will only give us parity with other organizations using the same adopted programs.

So where does unique advantage come from. I suggest that we first look to the most underutilized asset in most organizations – our workers.

We tend to look at labor as just that, labor. Workers are more than just the muscle behind management’s intelligence and creativity. Understand, with ever worker we hire we also get a brain. Most floor workers are doing what they do because they lack education or training, not because they lack intelligence and creativity. So how do we tap this intelligence?

We need to access all the talent available. Innovation is not the sole province of the corner office. Those companies that ignore this fact run the risk of becoming the underclass of the next economy. They will compete solely on price if competing at all.  While they may survive, it will be at the will of more dynamic organizations.

While Kaizen events are one of the best tools to generate employee involvement, they are also commonly misused. I asked a floor associate if she knew what a Kaizen event was. She responded, “I have been in a couple. It’s a three day meeting where managers come out on the floor and explain to us what we think. If the event succeeds, they take the credit for showing us what we were doing wrong. If the solution doesn’t work, they say it’s because we didn’t understand the genius of management…sometimes we get a tee-shirt.”

This was not a stupid employee, she had seen through an organization’s attempt to misuse Kaizen to forward a predetermined agenda. She wasn’t fooled and the organization lost her engagement as a result.

We need to be sure that Kaizen events sincerely draw on the associate’s intelligence, creativity and their need to contribute to progress of the company. We need to define success not just in general terms, but how their specific function contributes.

If you want innovation from the workforce ask for it. Make it part of the job description. Let worker know that you value their minds as well as their physical efforts. We need to be sure that outside programs don’t dominate the idea landscape smothering internal innovation – the innovation that defines us.

Another technique for structuring this effort is a tool called “Idea Portfolios.” This is a process where managers meet with the operations teams on a bi-weekly basis to explain and update the challenges facing the team’s area. We would explain management’s plans for improving competitiveness including capital investments, training, etc.

Then we would ask them to find ways to generate additional savings; a specific percentage, generally 2%-4% depending on the opportunities available. Two weeks later (and every two weeks thereafter) they would present their ideas and plans. Leadership was responsible for supporting them with data, technical expertise and capital when it was justified. They were responsible for the generation, implementation and execution of their ideas. They documented their progress and key indicators in notebooks called “Idea Portfolios.”

As you start this dialog with your workforce, it generates some interesting dynamics.

First, you will be challenged to defend some pretty weak management positions. In this process, a team leader can assign a task “up” the organization. This process can force management to reevaluate the factors behind long standing practices. While this makes us better managers, it can be a humbling experience.

Second, the composition of your workforce will change. Employees that are only willing to offer their physical efforts tend to disappear – wandering off into other organizations. The employees that are willing to engage in this challenge tend to spread the word and attract new workers with similar values.

More importantly, your organization will be better prepared for the challenges of the next economy.

Adopted external innovation, while making us stronger, can make us less distinguishable from our competitors; a commodity. Added internal innovation makes us unique to the markets we serve.

Barry Stuart

 

Article originally published in Plastics News March 2, 2012. Entire contents copyright 2011 by Crain Communications Inc. All rights reserved.

Echoes of Innovation…

It is one thing to understand the challenges we’re facing today and the underlying need for change. It is entirely something else to identify that innovation which represents real value to our customers, employees and shareholders. It’s this innovation that builds a robust organization. It’s what makes us unique.

 

 

Change comes to our organizations in one of three ways:

  • Adopted Solutions (external input)
  • Adapted Solutions (external input, blended with internal factors)
  • Internal Innovation

Over the last fifteen years we have seen an increased willingness to adopt “just add water” change programs as a tool to help offset ever growing competition.

By adopting existing programs managers believed that they were demonstrating the type of decisive leadership that would keep companies competitive. In the quest for business’s “Holy Grail,” the last thing that we wanted was to be seen doing nothing.

At the same time, we have seen the unprecedented growth in the consulting industry. It is estimated that the number of consulting firms supporting these pre-packaged change efforts has grown 97% since 1990. During the same period the number of individual consultants grew by 170% and consulting revenues grew by a staggering 334%.

Prior to this explosion of “canned” solutions, management had been accused of ignoring potential improvements simply because they weren’t “home grown.” Katz and Allen referred to this phenomenon as the “Not Invented Here” syndrome (NIH). Clearly there was truth to this concern. Our egos and arrogance had fostered a “bunker” mentality that seriously damaged our ability to compete. We were trying to survive by “driving the old process’s harder.”

However, there is a much bigger threat to industry than “Not Invented Here,” We are now facing the threat of “Nothing Invented Here.” We are allowing external initiatives to dominate our idea landscape. We are moving from a class of innovators, to a class of implementers; implementers of the ideas of others.

As leaders we need to be aware of new technologies and techniques and determine their true value to our customers, our employees and our shareholders. No one else can do this for us. Customer Relationship Management, Enterprise Resources Planning, Material Requirements Planning, Just In Time, Kanban, Process Mapping, Kaizen Events and Lean Techniques; each of these programs and tools brings value, but they no longer represent level one innovation. These programs are the echoes of the innovation that came before.

Adopting is a tool that gets improvement into our organization faster and easier than inventing. However when we adopt we are “standing on the shoulders” of others who took the time to understand the essence of the market they serve. When we embrace these programs at face value, we may understand the “how” of change but not the deeper “why.” We haven’t earned the knowledge.

Today,Toyota is one of the most imitated manufacturing organizations in the world. The Toyota Production System is not a “random collection” of adopted systems. It was developed out of a “clean sheet” process that encompassed a value system, an understanding of the market they were entering, and an understanding of their own limitations in post warJapan. It was designed to address the challenges they were facing.

Almost fifty years later, the TPS is the premier manufacturing system in the world, dominating such mass production giants as General Motors, Ford and Chrysler.Toyotaearned the knowledge. They understood the “why.”

This is not to say that we can’t adopt or adapt if the time or cost advantage offset the value of local innovation. But, understand that when we adopt we lose the opportunity to innovate; to gain a unique advantage in the market. It is innovation lost. Those companies that choose to follow will become the “beasts of burden” of the next economy.  While they may survive, it will be at the will of more innovative organizations.

When we adopt “Off the Shelf” programs we are not gaining a competitive advantage. At best we are gaining parity with the hundreds of other organizations adopting the same program. It is a defensive move, not innovation. We don’t compete by being the same we compete by being different; by being uniquely better. If we don’t offer uniqueness in the areas of technology, quality and responsiveness we are forced to compete solely on price.

When we allow “me too” programs to dominate the idea landscape, we do so at the expense of true organizational innovation. Inventing is a critical element of a dynamic organization. We need it; it defines us. It is part of our organizational DNA.

Saying that we are in the plastics business is like saying that Jackson Pollock was in the “canvas” business. We are all in the innovation business. Our end product is only the medium we work with. It’s the creativity, curiosity and intensity that we bring to that medium that determines our ultimate success or failure.

Barry Stuart

Article originally published in Plastics News December 23, 2008. Entire contents copyright 2011 by Crain Communications Inc. All rights reserved.