Innovation is an organic process, and it seems that only with the benefit of hindsight, when the papers are written, does the rationalization of errors, dead-ends, side-tracks, and jumping on the spot, occur to make it seem linear.
The best we can do is create the conditions where innovation flourishes, just as a farmer creates the optimum conditions for growth and productivity on his farm.
Trying to get stakeholder buy-in for an idea that breaks the mould is very hard in most organisations as it challenges the dominating logic of the organisation, what has succeeded in the past, and made it what it is today.
This process can be helped by breaking the internal selling process into two parts:
A Wall Street Journal op-ed by Eric Schmidt, chairman of Google argues that the demise of printed media, particularly newspapers and magazines is as much a result of their own hubris as it is the advent of new media, and that the opportunities for journalism have flourished rather than diminished.
Fairfax have just announced that the outcomes of a strategic review conducted by McKinsey will result in significant changes to their commercial profile over time, with greater emphasis on electronic media. About time they woke up, having lost huge slabs of classified advertising, their “Rivers of Gold” revenue streams, to specialist web sites like “Car Sales”, “Seek” and others. The tenor of the public announcements still smells of them seeing electronic publishing as a competitive force, rather than a very different but complementary one that will not go away.
Print has lost its immediacy over a long time, first to radio, then TV, more latterly the web, but the process has not been one that should have taken them by surprise, the challenge is to harness the fundamental two differences the web has enabled:
My instinct is that it is too late for incremental change to their business model, even at a rapid rate, the game has moved on too far for them to recapture the fortunes of the past. Glad I am not a shareholder, although Fairfax chairman Roger Corbett has a track record in instituting rapid improvement that generates great returns.
In Australia, we are considering the NBN, and the impact it will have, and argue about the best way to deliver it, cost effectively.
A further debate should be the impact of connecting the billions of people in the world not yet connected, and what that may mean to us, and others currently enjoying the benefits of living in a developed economy.
What will happen when Africa has access to the net, not just the knowledge, but the social tools, the ability to connect and do business across borders, absorb the cultural and economic differences they have with the developed world? With the resources base in Africa, the potential for development based on resources is huge, as with Siberian Russia, so long as the social institutions in those regions can evolve to the benefit of the majority, rather than breaking down into deadly squabbles over the potential spoils to the few.
The growth in Asia, low cost manufacturing based on low labor and institutional costs, has led to increased prosperity, increased education, a movement from the country to the cities, changes in traditional diets, will only accelerate and move to other areas in the world with increased connection, with huge flow on impacts.
Logically this also leads to consideration of the financial markets, as the developing world generates large trade surpluses, and investments in infrastructure funded by domestic saving further increasing their competitive advantage, how will the currently developed world repay the accumulated public debt? What will happen in those “developed” countries that slash public expenditure, and increase taxes to repay the debt rather than default?
We are in for a wild ride over the next few decades, but we seem to focus excessively on meaningless trivia, perhaps it is a coping mechanism.
“Open source innovation” is rapidly becoming an accepted strategy, an increasing trend as the communication tools on the net make it progressively easier, and people think up new ways to use them.
Eric Von Hippel a professor at MIT wrote “Democratising Innovation” some years ago, and put it on the web for free download, P&G have a deliberate strategy of seeking innovation from outside the firm rather than keeping it all internal, this is not outsourcing, rather it is casting around for the best ideas wherever they come from. Now, the idea has spread to more modest companies, one of my clients is experimenting with a “Wiki” as an adjunct to their more traditional and too slow technical processes.
These types of initiatives thrive on low communication costs, low barriers and transaction costs, it is the speed to market, the creative networks, personal kudos, and energy created that works for the initiators and participants, not necessarily the promise of royalties.
In any environment, those on the front lines see ways to complete a task easier, faster, cheaper, better, simply because they are doing it all the time, it is just that we usually do not listen enough when the front line employees they try to tell us, and once bitten twice shy.
Labor costs are typically seen as an expense, something to be trimmed and managed, rather than as an investment that can be optimised and leveraged.
All the fancy computer programs, training, and supervision in the world will not even begin to replace the value of an engaged employee who has some control over his environment, and recognition for making it more effective.
What is it like in your factory?