Continuous Improvement and Continuous Innovation
Even if you are on the right track, you’ll get run over if you just sit there. —Will Rodgers
Leaders are often at odds with the pull of two demands: order vs. progress. Operations seek stability; they are often a no-risk zone. Experimentation is reserved for the R&D lab or the tiny corner in the machine shop. Indeed, some view Lean as the philosophy of limits: quality measures of defects per unit (DPU), defects per million opportunities (DPMO), and parts per million defective (PPM). Of course, this view is not a fair representation of Lean. However, ridding waste in every form only illustrates the statement:
Nothing Wrong ≠ Everything Right
Leaders still need to square the need for innovation with the need for stability. Does the organizational drive to manage the business steal energy from the need to continually create it? How can we add “continuous innovation” to our vocabulary in addition to “continuous improvement”?
Big firms with big budgets and scale are in a better position than smaller firms to carve out resources dedicated to innovation of products, services, and operations. Still, there are options to consider for smaller firms. But for any of these to work and stick, it is imperative to have Lean processes for all major functions, from the shop floor to the front office.
A. Organizational Structure
- Based on the premise that focused efforts produce better results, look at how engineering and marketing are organized.
In many small firms, folks wear many hats; the call of daily demands squeezes resources for product/service innovation.
- Engineers may balk at being segmented into groups of product development vs. product continuation,
but there is a distinct need for both disciplines. Some of the key skills of one direction differ from those involved with the other.
- The marketing function goes beyond communications. Marketing—working with the dedicated engineering resources—
is charged with discovering and capturing the voice of the customer.
- Changes like this are difficult; it is not unusual to see things revert to where they were.
It takes vision and stick-to-itness to make this happen.
B. Strategic Planning
- In the annual and strategic planning process, how much effort and space is devoted to developing new products and services?
Are there product/service roadmaps looking at 1, 3, and 5 years out?
- Look beyond traditional ways to think about product development such as focusing on the competition.
Keep the following items in mind when working on your strategy:
> Customers “rent” your products to do something for them. Do a deep dive on every aspect of why customers rent what you
make. Look at supplemental services as well as the product itself. Customers may perceive products as being nearly the same;
what else you offer may tip the scale in your favor.
> Add a section to your plan that includes “scenario analysis.” What might happen (positive or negative) that could significantly
affect your business? Are there any emerging opportunities that match your firm’s strengths or potential areas of growth?
Even if your scenarios are off the mark, engaging in this kind of thinking keeps you open to possibilities. Then act!
> Keep in mind, there are more non-customers of your firm than customers! Investigate why. Sometimes we look at competitive
offerings too narrowly. To your direct competitors, add the categories of product and generic competition and think of what other
ways customers can satisfy their needs and wants.
C. Get to the Gemba
- As in Lean and the shop floor, it is important to get to where the “truth is told.” Observe how customers (and non-customers) use
the product or service. Look at every step along the customer journey, from filling out a credit application to unboxing the product.
Look for opportunities to combine functions or remove unused/unnecessary features. How can you make the experience of using
your product, and doing business with you, simply great?
Lesson learned: Add “continuous innovation” to “continuous improvement” to work on creating AND managing your business.