THE FIRST HORIZON
All companies plan for the future. But let's face it, some are better at it than others. And if the plan is considered 'strategic', it may very well be a highly guarded secret. This means it won't be widely known. But how can a closely-held plan be supported by the entire organization? How can we contribute to a plan that we don't know about? As it turns out, we likely aren't very effective at it.
Both psychologists and physiologists will tell you that when the human brain lacks information, it tends to supply its own, based on local perception. That's what makes watching movies possible (which are really just a number of still shots played in rapid motion) and what makes us marvel at the world of magic. We 'fill in the blanks', so that the world makes sense to us.
In the business world, this means when processes aren't clear, we fill in the blanks with what we believe makes sense, in order to get the job done. Much of what we fill in is really waste, but without it, we would likely never get the job done (let alone get started!). We don't know details of the quarterly plan, or the annual plan, or a 5 year plan (if that even exists). We create what we think is the first horizon, and we work toward it.
SEEING OUTSIDE THE BOX
People are creatures of habit. We tend to do what works for us. We learn what works, and we tend not to stray too far from that. We are risk averse, and we get more so as we get older. Companies are similar, and you can see it in their growth patterns. Young companies grow quickly. They add new products and services, get better at what they do, and attract more customers. Markets grow, as do sales, and hopefully, profits.
But if you look at a company’s growth over time, many of them tend to ‘plateau’ at times. These are times when sales are down, or technology overtakes them, or market preferences are changing. When a company breaks past this plateau, it has grown beyond itself, morphing into its next incarnation. They’ve broken outside the box.
INNOVATION THROUGH CRISIS
We often don’t think of innovating until there is a crisis. We’re losing market share, or losing profitability. We’ve lost excess capacity, or growth is less than expected. Something must be done! But history shows that these situations are not only predictable, but inevitable. So why don’t we anticipate them? Well, we try, but it’s hard to think out of the box (which is why we get it wrong so often!). Innovation shouldn’t be something we rely on in a crisis, it should be a part of our culture, to ensure our survival.
There are many kinds of innovation: New products and product lines, finding new markets, new ways to motivate associates, even moving to new leadership; all are considered innovations. Even new ways of performing processes can be considered innovation.
So ‘continuous improvement’ (CI) can be an innovation. And ‘process improvement’ (PI) can also be an innovation. They are distinctly different, in that CI is an ongoing enhancement of performance, while PI is a stepwise change in performance.
HERE’S AN INNOVATION: PROMOTE YOURSELF
If your company doesn’t have a VP of Innovation, it’s not likely to hire one soon. That’s WAY out of the box. But that doesn’t mean they can’t benefit from having one. It is relatively easy to make yourself the VP of Innovation, or at least, have the effect of one. This can be done with a simple thought exercise, that you can perform every day: Simply ask yourself, “What would the VP of Innovation recommend in this situation?”.
We all face challenges in the workplace, each and every day. And we deal with them in our own way, filling in the blanks where we can, ignoring distractions, and getting the job done. But little changes day-to-day, and our problems tend to come back over and over again. Sure, we dispatch them easier each time (that’s the magic of the learning curve), but they do take away from performance. But what if we applied our ‘thought experiment’?
Every time we encounter a challenge, ask yourself the question, “What would the VP of Innovation recommend?”. Remember the requirements: Must think out-of-the-box, and influence top leadership. This means that day-to-day challenges should be met, not with our usual ‘git-ur-done’ attitude, but with vigor, to eradicate the problem, and to convince others that the change is needed.
This small exercise can have a profound effect, on both small and large problems alike. Let’s look at how we might address problems differently:
|I don’t have enough time in the day
||Work harder, longer, faster, smarter
||Get rid of wasteful tasks
|There is too much work for the team
||Hire new associates
||Redefine our value contribution, and eliminate non-value-added work
|We are out of capacity
||Invest capital, buy capacity at market prices
||Look for capacity where we don’t normally see it, exploit it
|Our costs have grown at a faster pace than market growth
||Cut costs, lay-off workers
||Become competitive within the existing structure
|Unit prices are too high
||Ramp up production to make more units, amortize costs
||Work to customer demand, cut inventories & all related costs
|We are a low growth industry
||Restructure to save money
||Increase market share thru new products & services
|Profit margins are down
||Improve the transactions (Raise prices, cut costs)
||Create customer relationships that have more benefits over time
|Sales are flat or falling
||Cut costs to stabilize shareholder value
||Develop new markets, and new ways to service existing customers
It is true that we may not be able to find it within ourselves (or within our companies) to stretch our imagination to solve our biggest challenges. Sometimes, we will have to go outside our company, indeed, outside our industry, to find that innovator that can truly change the game. In the meantime, keep your mind open to new possibilities, and look for ways to promote yourself through innovation.
ABOUT THE AUTHOR
Bill Kluck is the Founder and Director of Operations for The Northwest Lean
Networks, a professional society which connects the community of lean professionals worldwide.
Bill has over 20 years of experience implementing lean in a wide variety of industries, both public and private. He has trained thousands of leaders & associates in various lean strategies and techniques, and has had billions of dollars in impact. Bill's main focus is building transformational change and evolving business culture.
Bill earned his Bachelor of Science in Industrial Engineering from the University of Washington, an MBA from Seattle University, and holds several continuous
improvement certifications (including a Six Sigma Master Black Belt, and a Master’s Certification in Lean Methods). He currenlty works as Assistance Vice President for Genpact, LLC.