Participants of this webinar are ebizQ's Gian Trotta (GT) and
Richard Platt (RP), former corporate innovation manager and senior
instructor for innovation methods, Intel Corp.
GT: Welcome to the second podcast in a very special series on
the Role of Innovation and Agility in Today’s Enterprises.
I’m eBizQ’s Gian Trotta. Our guest today is Richard Platt,
the former Corporate Innovation and Program Manager and Senior
Instructor for Innovation Methods at Intel. Richard’s primary
focus has been on the broad scope of innovation as it relates to
strategy, management, infrastructure, economics, business units,
R&D and the psychology and philosophy of competition in all its
forms.
That’s a very broad scope but Richard’s Podcast series
on eBizQ.net website will be accompanied by numerous presentations that
will illustrate the many references he’ll make to
up-to-the-minute sources, statistics and case studies. We hope
you’ll enjoy this look at the drivers of innovation -- from
China’s first dynasty to current business giants like Samsung,
Proctor & Gamble and Apple Computer. Welcome, Richard and thanks
for joining us.
RP: Thank you, Gian.
GT: Richard, last week we got a grounding on corporate
innovation via your presentation entitled: “How IT can Enable
Innovation Across the Enterprise”. Let’s take the next step
on the path to innovation-fueled agility by going back in time. A book
published 2500 years ago, Sun Tzu’s “Art of War” has
become a kind of latter-day Bible for today’s hyper-competitive
business managers. Why is it still relevant to today’s business
environment?
RP: Good question, Gian. Let’s back up a second and
think about it in this term. Let’s look at what the business
environment is about. It’s about competition and, you know, if
you go to Webster’s Dictionary, basically it says “the
struggle amongst organisms for food, space and other vital
requirements” and if you put it another way, competition is the
wrestling for resources or having desired relationships. The really
good thing about it is that, you know, if we think about things in
terms of the animal kingdom, they explain a lot of the mechanisms that
we see going on now when it comes to competition for resources. But it
doesn’t provide us any rules or guidelines and so, if you look at
human history what is the form of competition that is most prevalent, a
lot of people think sports and they are right in that but are there any
guidelines for that that is generic across all sports?
I didn’t find any; again, you have to keep in mind my
background as a researcher and as a technology developer, one of those
things that I’ll often dig into research. One of the things I
found and realized was that warfare is really the ultimate competition
and it’s all of those same things, you know, the struggle amongst
humans, amongst themselves for food, space, other vital requirements, I
mean, men have gone to war for women, so, again, it’s been over,
to get those desired relationships. It fell into that category when I
looked into what competition was all about. And so, it’s really
hard to refute in that sense because it really describes a lot of
things that goes on in the business environment sort of analogously and
I want to use it in those terms as analogous sort of way.
I have heard people argue against this whole warfare mentality and
it’s militaristic and it’s male-chauvinist, etc. etc. The
truth of the matter is that a lot of these arguments seem to be based
off of what is politically correct or utopian ideals and this is one of
the things is people wishing the world to be one way when it’s
another so there’s a failure to almost accept reality on the part
of the loop who profess this.
But there are guidelines, there are rules and principles for warfare
and there’s even non-rules, I mean, you’ve heard the saying
“all’s fair in love and war”, right but one of the
things that I came away with very clearly from my research into this
was that, in fact, he who wins is the one who is most adaptable and so
I then began to ask, “what are these rules for
adaptability” and especially if we start thinking about it in
terms of business, is there something we can use as some guidelines
with an ever-changing environment which it seems to be the issue that
we deal with in business.
And so, from there, I, you know, went, well, what’s the best
fit model for adaptability? And, you know, quite recently, I mean, a
lot of people have said this business is Darwinian, survival of the
fittest and what do we mean by when we say that? Most adaptable fit
that, biggest, smartest. Now if we want to use the animal analogies,
sharpest toothed, you know, whatever, right? But, again, going back to
our animal analogy, typically it’s those who get to eat first,
procreate first, garner the largest amount of resources and actually
get the resources that they need to survive, those are the alpha of
their species or the alpha dominant ones that dominate other species,
Lions are a classic example. But the reality is is this sort of
perspective in looking back and that’s all the animal mechanisms
when we look at them analogously, they only give us hindsight, they
don’t give us a direction to look forward into the future to be
able to create it. For that, you need to have tools. So, anyway,
that’s my best way of sort of putting that out there for you.
GT: OK, I would say, Richard, again as you mentioned, some of
our listeners might think that a militaristic analogy doesn’t
work in an era where projecting a benevolent corporate image and a
sense of environmental activism are increasing part of business
strategy. Why is your metaphor still relevant?
RP: Well, I think it’s a classic misunderstanding about
when you’re applying this what we’ll call the analogy of
warfare or the art of war into the business environment. This warfare
is not a war against customers but it’s about winning hearts and
minds and then also it’s about gaining competitive advantage.
Again, getting those desired relationships with customers and there can
be multiple battlegrounds for this. But primarily, it’s in the
mind of the customer and then in the marketplace and it’s about
market share, and your influence in the mind of the customer
that’s a key fundamental. You might also be competing against a
brother or sister company in the innovation space, or in the core
competency space and there are multiple versions of this. There’s
a guy, Langdon Morris, who back in 2003 did some really great analysis.
He looked at the Fortune 500 over a 46-year period, he looked at the
Forbes 100 over a 70-year period and the S&P 500 that was
originally 90 companies and then expanded to 500 in 1957, he looked at
them from 1957 onwards.
Well, here’s the three things that they found out that Langdon
found out was that when it comes to the Fortune 500 that literally
one-third between the period of 1979 and 1983 actually fell off the
list of Fortune 500 or actually went out of business and, in fact, 30
companies left the company every year which is a 6% turnover per year,
that’s a pretty hard-core number.
And if we looked at the Forbes 100, it starts to look even, almost
as bad from 1917 to 1987 so we’re talking what 70 years, 61
companies of the original 100, gone, right, average 1 company per year
dropping off their list and then if we look at the S&P 500 data,
you know, of the original 500 in 1957, only 74 of the original 500 were
left. The average mortality rate, 10 companies per year, you get
knocked off the S&P 500 and the average lifespan decreased from 50
years to 25 years and the thing about it is by 2020, this is his
forecast was that ¾ of the S&P 500 will consist of companies
that don’t exist today. I mean, companies that don’t exist
today; that means providing new functions. The real question that this
pops us in my mind is “why?” and that’s where
I’m going to leave that for the moment. Hopefully, I’ve
answered your question.
GT: Ok, thank you, that’s a sobering trend. What conclusions can we draw from this corporate carnage?
RP: Well, sobering is the right word because if you
extrapolate this data and you project it forward slightly different
than the way Langdon had done, actually, I’m looking at Richard
Foster and Sarah Kaplan’s book that they wrote: “Creative
Destruction” written back in 2001. They said that about 1/3 of
today’s major corporations will survive as businesses for the
next 25 years and they went on to say that most will die or be bought
out and absorbed because they’re basically just too slow to keep
pace with the change in the environment and so, you know, when I look
at that, again, in trying to answer the question of why, it’s
like it’s a change conspiracy, we’ve got accelerated
change, increasing competition, increasing complexity.
I don’t think anybody is going to argue with this,
particularly in the IT domain. I mean, the reality is that we’re
looking at drastically compressed planning horizons for every company
and the need for fast response. So the root cause is an adaptability
issue, going back to what I looked at before and saw that those that
were, you know, the best war fighters, right, were, they were better at
adapting. I mean, you could look at Iraq right now and the trouble the
American army is having in dealing with those folks in Iraq, it’s
the same thing, these guys are able to adapt because they’re more
fluid. It’s irregular warfare that they’re having to work
against and it’s quite a challenge.
GT: Richard, what type of poor corporate habits are causing organizations to become unadaptable like the Neanderthals were?
RP: Well, great question. The truth of the matter is Joseph
Schumpeter, the economist, six years ago said, “change isthe
common condition, not stability”, right, I mean, there’s a
whole bunch of Heisenberg principles and a whole bunch of the ones, all
saying the very same thing. But Schumpeter basically said the very
nature of market evolution is actually some companies while creating
opportunities for others. And, if that’s taking place, then, you
know, you’ve got to be able to be able to adapt, you know, to the
market evolution of things. The big issue is, and here’s the poor
habit, is it’s instinctive for people to actually look backwards
to the past and use it as a guide to looking forward into the future
and absolutely that’s an incorrect approach to take, especially
if things are changing, right because the old rules that existed no
longer are relevant or they become much less so. And, so, you have a
change conspiracy on your hands. And, so, this, again, Langdon Morris
also pointed this out, they’re very adept, I thought, capture the
issue where he makes a comment: “This misplaced focus in usually
only evident in hindsight when market share, jobs or stock value have
already been lost.” I mean, it’s like trying to close the
barn door after the cows have already got out. I mean, that’s the
issue and so you have to get a little more proactive at that point.
GT: Right. How do the principles specifically mentioned in “The Art of War” come into play here?
RP: Alright, great question. Ok, so let’s talk a little
it about basics first, here, right, so, again, keeping people, we give
them a better, clearer understanding about it. First off, the highest
form of competing, according to “The Art of War” by Sun Tzu
is to win without fighting. I mean, this is the equivalent of getting
to the true win/win, right.
GT: And hearts and minds, I might add.
RP: Absolutely. Because that’s what it’s all
about, again, when we talk about a business, it’s about winning
customers’ hearts and minds, right. So, this is the true win/win.
The other thing that’s also the main emphasis within the Art of
War is compete where your competitor is not. And you actually need
tools for this. And the first tool that I’ve found that was
actually being used in business was called “Blue Ocean
Strategy” and I think it’s one of the best. I’ve
actually used it a couple of times. There are a lot of case studies,
they’ve come up with a really good approach, I think for finding
and competing against, instead of doing “Red Ocean” which
is, you know, head to head, bloody in the water, right, again,
they’re also speaking to that analogy with animals and competing
and it being difficult, right, that’s one of the tools that I
would highly recommend.
The other one, actually is a step back even further, it really gets
into the assessment thing. And it was actually done by a Colonel in the
Air Force who was a fighter pilot by the name of Col. Boyd and he came
up with this thing called the O-O-D-A Loop which stands for Observe,
Orient, Decide and Act. And basically, it’s the same approach
that fighter pilots use, martial artists use, and other who are
familiar with martial warfare or the martial arts in general. But,
basically what it is is a framework on how competition actually unfolds
and provides a capability that we’re looking at here that
basically, to look at the competitive landscape then adapt to it. And,
you know, this is fantastic because if you look at Boyd’s Cycle
and how and what, you know, we’re talking about here is some of
the things are basically baked into the observe, and the orient phase
is quickly understand what’s going on and you’re looking at
different things like genetic heritage, cultural additions, analysis of
the data, and a few other things along those lines, right like new
information that’s taking place and this is all sort of happening
dynamically, this doesn’t happen sequentially.
Then you got the you’ve got to know what to do so that’s
the decision and it’s actually a working, in process hypothesis
that you’re actually doing and you’re learning from the
experience because being able to do it and then act and test out this
hypothesis is an ongoing thing that the marketplace feeds back to you
which thus in turn justifies what you and I were talking about last
week, Gian, which was the whole thing in rapid prototyping.
You want to test out concepts as quickly as possible so that
you’re not going to have an issue with your refined product on
the back end because you’ve only done one iteration and you shove
it into the market, you’re basically betting the farm that
you’ve got all those parameters correct and you correctly
identify what the customer wants. That’s unwise, at best.
If we look at this from an agility standpoint, right, we’re
really looking at culture, organizational culture, and a climate of
trust that actually encourages people to actually use their initiative
and further the goals of the organization. And, it’s when people
have that, that’s when they actually solve technical problems. I
mean, agility in the O-O-D-A Loop environment, right, is time-based,
strategy for your operational success and it’s not based on size.
It’s also a relative concept and, so it’s not absolute, so
things are changing all the time so it helps you; you’re, again,
using this framework helps you to sort of adapt. And, the agility of
aspect of it is an important attribute for even the projects’
success, I mean, the small or large size and I’m speaking
specifically about rapid prototyping. My recommendation there to your
listeners is actually read Michael Schrage’s “Serious
Play” how you know, the most successful companies simulate to
innovate, I mean, it’s an exceptional book, goes into deep, deep
detail on just that particular part right there but at the end of the
day, it’s about organizational culture.
GT: Right, going to last Podcast, you mentioned some
companies and do you have any proof of this and proof of John
Boyd’s circle with specific companies?
RP: I do as a matter of fact. Real quickly, one of the things
that Boyd said was that when you’re really good at this
it’s like you’re watching your competition moving in slow
motion and let me point out a couple of key elements that are going to
be important for you to understand as I tell you these examples. He
also comments that it’s like you’re commanding both sides.
That’s pretty powerful stuff. And there’s two key
principles here that are important to mention right at this point which
is known as “chang” which is actually, you know, called
orthodox or the expected thing. And then there’s
“chi” which is unorthodox, shocking, irregular, right,
these are the two concepts that are going on here and that are part of
helping assist the operator that is using this type of methodology or
this type of framework to actually enhance their decision making and
make it easier actually to exploit this orthodox vs. unorthodox
approach and so let me give you some examples might be a better way of
sort of illustrating this.
Oh, let me back up one second, one thing I’m going to add.
George Stalk and Tom Howell who wrote the book “Competing Against
Time” made this comment “A time-compressed company does the
same things as a pilot in the O-O-D-A Loop, it’s the competitor
who acts on information faster who is in the best position to
win.” So it’s like the minute you get information and you
can respond more effectively with that, the more effective you can be
in out-competing your competitor. So, what do I mean by that? Well, the
best, most illustrative example of this probably is the Honda/Yamaha
war that took place way back when, right? It was an 18 month war,
basically Honda did two times the number of designs for the
marketplace, essentially, they were testing in the marketplace and they
out-innovated Yamaha, right. They both started with about 60 designs,
right, at the start. At the end of the 18 months, Yamaha was actually
left with 12 months of unsellable inventory, they lost and, again, the
issue is that they got the test, Honda actually got to out tested
Yamaha in the process.
Some other examples:,Toyota production development systems are
essentially, for the most part, two times faster than most of their
competitors. Dell’s supply chain is shorter in time than its
competitors.
And one of the big ones, you know, utilizes Boyd’s Cycle or
some of the elements within it is the Apple iPod what Steve Jobs did
was he took advantage of a situation, this is another one of the tenets
within the Art of War which is you really can’t win, your
competitor has to give you the opportunity meaning your competitors are
paying attention to the customers and this is exactly what Steve Jobs
did. He’s a really actually a pretty good competitor because what
he did was, I mean, there were already MP3 products in the market, what
he did was he took the iPod, you know, and they’re pretty much a
design user-centric kind of organization, he’s one of the few
CEOs that is and then he, when he saw that Napster was tanking it
because of their poor relationship with the recording industry which is
a major stakeholder and once they were down and out, he went and sort
of crafted his own iTunes thing and then created relationships with all
these folks in the recording industry, you know, he already had the
relationship, I think, going on with Disney at that point because of
his whole little Pixar thing that he had going from way back, I mean,
this guy was set up for success as far as seeing all this stuff but the
truth of the matter is what he’s done is he’s taken
advantage of his competitor who was Napster to come up with, you know,
a really compelling combination and it was only through the compelling
combination that actually enabled Apple to be successful -- at least in
my opinion.
GT: I think that the respective fate of Yamaha and Napster
are sobering but nevertheless it’s an inspiring presentation on
the whole. In Part 2 of The Art of War for the Enterprise, we’re
going to look at more strategies including, but not limited to new
corporate structures, what role industrial innovation can play,
commoditizing markets effects on innovation, the uses of systematic
innovation methods and how to map them to specific problems and most of
all, and perhaps most importantly, how to speed new product
development. If you’d like to send a question or comment to
Richard in the meantime, visit www.ebizq.net/blogs/firstlook. This is Gian Trotta of eBizQ.net signing off with a sincere thank you for all of you for your time and your feedback.
GT: I’m eBizQ’s Gian Trotta and I’m
welcoming you to our second half of The Art of War for the Enterprise
Podcast. It’s part of a special series on achieving innovation
and agility in today’s hypercompetitive global market let by
Richard Platt. He’s the former Corporate Innovation and Program
Manager and Senior Instructor for Innovation Methods at Intel Corp.
Rich’s primary focus has been on the broad scope of innovation as
it relates to strategy, management, infrastructure, economic, business
units, R&D and the psychology and philosophy of competition in all
of its forms. That’s a very broad scope but Richard’s
Podcast theories on the eBizQ.net website will also contain links to
numerous presentations that reflect and refract many references he
makes here. Welcome back, Richard. Thanks for joining us, once again.
RP: Thank you, Gian.
GT: Richard, the first half of this Podcast we identified why
companies cannot remain competitive without innovation. We also
identified some enduring barriers to innovation rooted in corporate
structure and how some strategies based on Sun Tzu’s “Art
of War” have let Toyota, Apple, Dell and Proctor and Gamble
thrive while other companies fall behind and face total failure. How do
you enable change at the corporate level to meet these challenges?
GT: I’m eBizQ’s Gian Trotta and I’m
welcoming you to our second half of The Art of War for the Enterprise
Podcast. It’s part of a special series on achieving innovation
and agility in today’s hypercompetitive global market let by
Richard Platt. He’s the former Corporate Innovation and Program
Manager and Senior Instructor for Innovation Methods at Intel Corp.
Rich’s primary focus has been on the broad scope of innovation as
it relates to strategy, management, infrastructure, economic, business
units, R&D and the psychology and philosophy of competition in all
of its forms. That’s a very broad scope but Richard’s
Podcast theories on the eBizQ.net website will also contain links to
numerous presentations that reflect and refract many references he
makes here. Welcome back, Richard. Thanks for joining us, once again.
RP: Thank you, Gian.
GT: Richard, the first half of this Podcast we identified why
companies cannot remain competitive without innovation. We also
identified some enduring barriers to innovation rooted in corporate
structure and how some strategies based on Sun Tzu’s “Art
of War” have let Toyota, Apple, Dell and Proctor and Gamble
thrive while other companies fall behind and face total failure. How do
you enable change at the corporate level to meet these challenges?
RP: Really good questions, Gian. First off, I think you have
to look at the structure of the corporation and how innovative ideas
actually move through it. The truth of the matter is the corporate
infrastructure in and of itself tends to be a barrier as it is
naturally set up particularly when senior management sets the
expectation that middle-level managements kind of vet out good from bad
ideas before it actually gets to them.
And so, decisions made by mid-level management can be rather
difficult and tenuous because you get into political aspects and if, to
any degree at all, a company is siloed, then you don’t get good
sharing and then people trying to hide stuff and so, it actually works
against them and so, you know, for the individual or the group that
sort of comes up with a really neat idea and they’re starting off
at the bottom of this pyramid of the corporate structure and sort of
walking it through, I mean, you’ve got to be wearing track shoes
for the bloody thing and the, you know, from a corporate standpoint, I
mean, this isn’t really a system or a pipeline for innovation,
this is a trial by fire because it’s not set up for it, not
appropriately.
And, this is what in fact passes for an innovation pipeline in
companies today. The impact to this is corporations in and of
themselves aren’t set up structurally, organizationally to
actually effectively integrate nor to exploit innovation opportunities
because even profitable ideas don’t make the cut, political
element takes, you know, more sway over the data driven
decision-making. There’s actually inadequate or insufficient or
actually no resourcing whatsoever of good innovative ideas, I mean, you
also lose momentum and speed of implementation if it’s not
outright even stopped and then, like I said before, it becomes
silo’d.
The one thing is that was, you know, was identified right from a
research proposal was out of this was that it was only those that were
actually sponsored by senior-level management that had the funding, you
know, air cover type of thing so that, you know, they didn’t run
into political, you know, difficulties. That was the only way that
these concepts got all the way from the bottom of this pyramid all the
way to the top. The result being is that these things are still in
play, right. Few new strategies to enable the corporations and new
markets and profitability is, is totally hampered, I mean, it’s
we’re a bureaucracy now rules so, and especially so if it’s
only the ones at the top can come up with the good ideas and sometimes
that type of thinking prevails, not in all companies but in some and
so, you have to watch out for this, you actually have to put in place a
process.
GT: What are some of these new strategies and specific processes?
RP: Really, what you’re getting at there, Gian, is
actually what’s industrial innovation or commercial innovation as
it’s also known? And the definition of that, really is very
simple: something that people will value and are willing to pay for and
actually if you go into systems engineering type of stuff or actually
into some other innovation methodologies, there is what is known as the
value function or value formula or the ideality formula which basically
says functions over cost and so what you get with that actually is when
you look at this when you have functions in the numerator and costs in
the denominator, right, and you sum up those functions or those useful
functions that you’re getting in the numerator and those costs
and those harmful things in the denominator and you start playing with
the formula a bit, you can see that, you know, reducing the harmful
effects, i.e. cost, noise, problems, etc. actually improves the value.
If you increase the number of functions offered to the customer,
again, it improves value. If you improve parameters associated with the
functions, you enhance value. If you do both by improving the
functionality and lowering the cost or take away the harmful thing --
again, improved value. You improve the functions more than the harmful
effects so you’re overcompensating for them, again, you improve
value. Or you decrease the harmful effects more than the useful effects
are being, you know, decreased, then again, you enhance value and so
this becomes a really useful way of approaching it.
Why is it important is the other thing that’s worth mentioning
here. Technology and service-based businesses commoditize over the long
run, global competition drives down the price. My former company I
worked for, Intel, that’s what they deal with now. They are
competing in shrinking margins, this is not uncommon knowledge. But
basically, what we’re looking at from an innovation, the real
issue with that is it drives down price and when it drives down price
for the, you know, the company that’s providing that product in
the market has a margin that’s being eaten away and so the thing
here is that innovation in and of itself the value provided to the
customer, again, going back to our little formula we just mentioned,
right, this is the fighter of product and service price deflation and
this is where your margin lives so you’ve got to go do this and
it’s actually, once you see it for that, then you realize that
innovation is actually a core competency.
Caveat, though: strategy and
innovation are actually inextricably tied together and unless you have
strategy actually pulling everything together, without it, innovation
is rudderless over the long term. It becomes innovation for
innovation’s sake.
Some other reasons why you might have problems is that you can have
aging product or service lines. You can have just outright business
decline, customer defection and just the bureaucracy of large
enterprises can cause this and so this is one of the challenges, but, I
mean, here’s the thing: for people to sort of argue and complain
about globalization – pointless, you’ve got to join,
you’ve gotta deal with it, it’s just one of the competitive
aspects of the environment. Hopefully, I’ve answered your
question, Gian.
GT: You have, let’s go a little deeper. Who is doing industrial innovation and what specific problems are they solving?
RP: Great question. So, well, basically I did a lot research
and I had to because that was my job as Innovation Program Manager at
Intel, I mean and I did it three times over the last four years that I
held that position. But basically speaking what it does is, these,
looking at innovation methods in and of themselves, which of the ones
are most effective. But then I began to back up and ask myself a more
fundamental question which is this: “who’s actually doing
this?”
Well, turns out when you start digging into some of these innovation
methods that, and you look at Business Week and they’re probably
the best place to start because they have their top 25 most innovative
companies thing that they do and then I began drilling into, you know,
what some of these systematic innovation methods were and we’ll
get to them in a second. But it turns out that actually 1/3 of the top
25, they were using it and in fact ½ of the top 10 were using
it, ½ and that was the part I went, “whoa” this is
compelling in that sense in and of itself, a lot of them are using it.
And then I started to look at, well, what sort of results were being
derived and I have another presentation that talks about corporate
innovation culture and that’s on Samsung, that’s another
presentation that’s located ere on ebizQ, that people can access
and it has a number of case studies in there if people are interested
in looking at that. But, some of the ones I have on here, obviously
Samsung and Proctor & Gamble, my old company – Intel,
Ferrari, Nokia, Panasonic, HP, GE, Boeing, Toyota, Siemens, Whirlpool,
Nissan, I mean these are all top players, BMW, 3M, these are all using
systematic innovation methods.
The problems that they’re solving, well, this is where I went
back to my own experience at Intel, I trained about 850 engineers
myself personally and plus and so I had, what about 4 years under my
belt doing that, and then I went and got ahold of a friend of mine
named Dave Verduyn who, he and I got together and collaborated on our
shared experience in problem solving and using systematic innovation
methodologies and he had quite a few clients, where we actually came up
with a matrix that we actually created and so this is a combination of
both myself and Dave’s work which is about 25 years worth of
experience. Dave has far more experience than I did and I leveraged a
lot of it.
But, basically speaking, what we did was we actually created a
matrix of identifying what are the typical types of problems, and we
came up with 15 of them and then we mapped in well, what are all the
different systematic innovation methods and even the ones that
weren’t systematic but were like brainstorming and stuff like
that and sort of, how do we evaluate their effectiveness. And we looked
at it from an impact standpoint which ones give you the greatest amount
of benefits and from that we identified a bunch of what are known as
structured, systemic innovation methodologies, also known as
“TRIZ” which is a Russian acronym for the theory of
inventive problem solving, actually come from Russia originally and
then we looked at psychological methods, then we also looked at methods
that are actually come from IDEO that they’ve become most
recognized for which is Ethnic Graphic Analysis and Discovery tools and
so we mapped these against which had the highest impact based off of
our experience in using these methodologies.
There’s a whole boatload of examples that are out there that
we could talk about but I think this type of matrix probably does a
better job, in my opinion, of actually sort of pointing directly to
systematic innovation methods themselves because if I tried to do a
case study by case study on each one of these, some of it’s, most
of it’s confidential information, can’t get access to it so
this is another way of displaying the data without talking about the
proprietary solutions that have come up within companies.
GT: Right, I understand. Is there any data behind what increases growth and speed?
RP: Absolutely. I actually talked to Vice President of Sigma
Breakthrough Technologies very recently at the Process for Innovation
conference, name’s Joe Piccolora, great guy. Anyway, he
provided me with a wonderful little presentation that he has on an
analysis that was done with new product development techniques that
were evaluated across 9 different techniques, by the way, across 233
manufacturing firms which that’s quite a bit of data, I mean,
quite frankly, it’s statistically significant going back to my
Q&R background, I mean, this isn’t some hokey, sort of,
“well, this is what we think it is.” It was statistically
verified.
The idea behind new product development approaches and, you know,
methodologies is the same as systematic innovation methodologies and,
even for that matter, what, you know, Boyd’s Cycle is telling us
which is compress time as much as possible and, take advantage of that,
well, the key finding is that they were looking at pioneers, fast
followers and what sort of, type of competitor were you but at the end
of the day, you know, and let me mention the nine approaches first
before I go rolling into this. The nine approaches they looked at were:
Supplier Involvement (SCI)
Lead User Involvement (LUI)
Acceleration of activities and tasks (AST) and more than likely,
you know, this is about compressing time, you can probably almost bet
that that one is going to be at the top of the list
Reduction of parts and components (DFA), also known as design for assembly
Training and Rewarding Employees (TRE)
Implementation of Support Systems and Structures (SST)
Stimulating Cross-Functional Cooperation (XFC)
Customer Emphasis (VOC) or also known as Voice of the Customer, Mind of the Customer, and then
Simplification of organizational structure (SOS)
Well, and here was the really interesting thing: the data verify
everything that I had learned from my lean design for Six Sigma
background plus my background in using innovation methods that shorten
the time to solution, shorten the time to concept, shorten the time,
you know, to any product going out the door when you did rapid
prototyping and I only picked one of the slides so when people are
looking at this presentation deck, know that there are more slides that
go into more detail about some of the other players and how they behave
but what this does is merely verify what I’d already sort of
intuitively realized which was that when you listen to the customer and
the end user both speedy and more profitable is what the result is when
you’re using Voice of the Customer and user involvement.
The AST stuff scored very high on the speed side of things and,
again, anything that increases speed is goodness, right? They also
looked at supply chain involvement, again, it’s about increasing
the speed of supplier response also they looked at, you know,
simplifying organizational structures and training and rewarding
employees, companies that don’t do this, you know, train and
reward employees or are too bureaucratic, they don’t get the
speed, they don’t get the benefit and even if you’re a
matrix organization, you can still have internal politics taking place
which will actually slow your speed, so they make all these
recommendations plus the fact they also point out if you don’t
have a structure for innovation you’re going to have reduced
profitability.
That’s what the data tells us. It’s not an
unreasonable thing to extrapolate from this data. And so, it’s
been very interesting to see data like this confirm what I had sort of
worked out through my research and work in other areas that sort of
verified, in fact it validates, you know, the very direction that, you
know, Boyd is getting at is, you know, in the O-O-D-A Cycle of things,
compress time and you’ll gain benefits.
GT: That’s positively Einstein-ian and I think, and
relative and I think on that note, I think we’ll head off for our
next Podcast. I want to thank you again for an informative, inspiring
presentation.
RP: You’re very welcome, Gian.
GT: I think in coming weeks, Richard, I believe we’ll
be looking at the advantages that come from being both the first and
the second mover in a market.
RP: We could do that if you wanted to, Gian, I guess it
depends on the response of the, you know, of the people here on the
ebizQ if they want to see that.
GT: Yeah, right, I think that would pull together a team
that if one can be both an innovator and a fast follower in this
hypercompetitive market, I know you’re well-armed on that front
and have a load of information.
RP: Yeah, we can talk about that.
GT: The other one is something that I’m intrigued
with is, it’s you’ve developed a presentation on the role
of the CIO but not the CIO that many of our members are used to hearing
about. Could you’d talk a little about that?
RP: Well, I actually did a presentation on, we’re
talking about Corporate Innovation Officer vs. Corporate Information
Officer, right?
GT: Yes, yes indeed.
RP: OK, so, yeah, I did a presentation that’s sitting
up on the ebizQ little links out there on the side where you’ll
find this podcast which is the Skills and Role of the Corporate
Strategy and Innovation Officer, again, Strategy and Innovation are
inextricably tied together and on top of it, this type of role has been
around for quite some time but if people want some detail, the
presentation’s out there for folks and Gian, if there’s
enough response we can actually do a Podcast about it.
GT: That’s be great. I’ll take this opportunity
to remind everyone, every one of Richard’s presentations and
Podcast landing pages have a comment box where you can send him your
questions, comments. We want this presentation series to serve you and
your current corporate needs. Again, I thank you, Richard and we should
be talking to you next week.
RP: Thank you, Gian, appreciate it. Take care.
GT: I’m Gian Trotta, thanking everyone for their
valuable time and as we can see, even more valuable and desired
feedback. Good night to all.