||Insourcing Innovation -- Evolution of Management
Evolution of a Big Idea
From a bird’s eye view, we can define business holistically as the ongoing act of creation and improvement. (See Figure 2-1.) You create something new to offer to customers, and then you try to make it better (improve) while also trying to come up with something new or different again (innovate). In an overarching sense, this is how businesses evolve: as a function of the healthy tension and fine line between innovation and improvement.
What business should know today about innovation is what it knew about improvement a long time ago: There is one answer, just one answer, to every problem, if you can only find it! Leaders like Deming, Juran, and Crosby forged the pathways of what it means to take quality seriously and personally, to believe it in your heart and to live it with your initiatives. Because of this major shift, almost all corporations employ the tools of quality with great conviction, and those who don’t are stuck in the Dark Ages of business.
Yet the other half of the business equation, innovation, is still mired in ambiguity and lack of structure. Evolution hasn’t yet carried the mass of modern business to a place where it can agree on what constitutes world-class innovation practice. And there surely isn’t a roadmap, common language, or set of standards that can be effortlessly exchanged between companies, suppliers, partners, executives, managers, engineers, employees, functions, departments, and the rest.
In the world today, you’re either good at innovation or you’re not, and your goodness or badness isn’t a function of how well you follow a standard roadmap, because there is none.
Or at least there isn’t one that a tipping-point full of organizations understand. Sure, you have innovative companies that drive themselves by organic growth. A good example is Proctor & Gamble, which has done very well in increasing revenues over time without too many acquisitions. When P&G does acquire, it wants companies that have their own organic innovation engine in place. In a CNBC interview, Gillette CEO Jim Kilts said that one of the biggest reasons for P&G’s bid to buy Gillette was its innovation in men’s grooming products and batteries.4
Whirlpool is another example of a company moving fast toward systematic innovation. When you think about an industry like appliances, it’s readily apparent that there is “a sea of white products with little to differentiate them except price.” These are the words of Dave Binkley, Whirlpool’s senior vice president of global human resources.5
About five years ago, former Whirlpool CEO Dave Whitwam saw a vision of a company obsessed with innovation, because he saw this as a lacking competency. Today, there are a lot of people at Whirlpool working to make innovation commonplace, and the company believes it can train anyone to innovate.
Says Whirlpool VP of Corporate Planning and Development Harry Burritt: “In the 1980s, the [watchword] was quality; today, it’s innovation . . . But the two are not mutually exclusive . . . Now we want superior quality and faster cost reduction, plus innovation all at once.”6
It’s clear that most have developed the skill of improvement very well with all its tools, methodologies, roadmaps, and quantified results. But only the rare few are driving headlong like Whirlpool toward making innovation an embedded and core competency. Even when companies profess a commitment to innovation, they struggle to materialize that call.
4 CNBC News, January 28, 2005.
5 As quoted by Pomeroy, Ann in “Cooking Up Innovation,” HR Magazine, November, 2004, p. 46.
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