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Stifling Innovation The Decline of American Economic Power.

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Presentation on theme: "Stifling Innovation The Decline of American Economic Power."— Presentation transcript:

1 Stifling Innovation The Decline of American Economic Power

2 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 2 Quotes on Innovation …but if to grow success, then one must wake up anew every morning and keep awake all day. I saw great businesses become a ghost of a name because someone thought that could be managed just as they were always managed…. Henry Ford, My life and Work “pursuing incremental improvement while rivals reinvent the industry is like fiddling while Rome burns” Gary Hamel, “Strategy as Revolution,” Harvard Business Review (July/August 1996

3 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 3 What’s Innovation? If you have a lot of off-the-wall thoughts, you’re creative If you can turn them into something of value, you’re innovative

4 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 4 Where Innovation Thrives Fashion, Finance Communications High Technology, Finance, Fashion Software Pharmaceuticals Entertainment, Aerospace Aerospace, High Technology Pharmaceuticals

5 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 5 Where Innovation Suffers Farming Manufacturing Banking / Insurance Service Industries Retail Energy

6 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 6 Dour economic news for Ohio Poverty Climbs, Incomes drop Many of Ohio’s best-educated and skilled workers – who tend to be more successful at weathering an ailing economy – are moving to other parts of the country. “It’s not surprising the Mid-west is the only region that actually saw increases in poverty” Daniel Lichter, Ohio State University Professor of Sociology Columbus Dispatch 27 Sept 2003

7 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 7 Where Innovation Suffers – Int’l Example Japan –A culture where innovation is NOT generally condoned –A reputation of ‘copy-cat” manufacturing, done better, faster, cheaper –When the labor cost to quality balance made off-shore manufacturing effective, Japan suffered –Japan is showing signs of recovery. Interestingly, they are also showing signs of some of the world’s top innovations –A strikingly similar situation to the US, and the Mid-West in particular

8 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 8 Why is Innovation so Important? #1 – the Internet as a whole…. –Not many years ago, Your market was local Your customers did not know it was cheaper someplace else, or even that there were alternatives #2 – … and eBay as a specific example –One big swap meet What you used to have to find driving to (a limited number of) garage sales, now can be done millions of times instantly on eBay The need to buy new, because you could not find what you need at yard sales, has been reduced #3 – Return on Innovation –A study on 17 successful innovations Mean return of 56% vs. an average ROI of 16% –Innovation accounts for almost 50% of all growth in the US

9 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 9 Case Study – Proctor and Gamble P&G (Cincinnati Ohio) –A huge consumer products company –Last major innovation – Pampers, 1962 –Recognized that internal innovation was non-existent hired new CEO, 2000 - Fired 17 months later WSJ Conclusion – “Tried to change the culture too fast” –Current Innovation Strategy Buy Innovation –Set up team of people that do nothing but scour the country looking for companies that innovate, and try to acquire them Will it work? –Cultures that can’t innovate, will typically stifle purchased innovators

10 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 10 Myths that Challenge Innovation Budgets are key –by putting budgets above innovation, companies avoid the risk, but they stifle the innovation Outsourcing saves Money –Short term, yes, but long term, your talent, core competencies, and capacity to innovate disappears The Best Product Wins –If only…..First to market forces us to rethink the value and profitability of quality Nothing is wrong in the existing environment, so there is no need to change –Your competitors are; if not the ones you know, then the ones you don’t

11 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 11 Symptoms of “Innovation Challenged” Cultures Diversity of Opinion (Dissent) not Well Received –“We’ve always done if this way, and it worked, so leave it alone” –When you challenge the status quo, “You’re being arrogant” Courage to Make Decisions is minimally existent Efficiency (and associated “best practices”) are counter to trying new things Innovation? Something the engineers and researchers did. Regular people just followed their bosses lead Success stifles innovation –If what you are doing works, why change? Change is always difficult; most people like “routine”

12 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 12 7 Stages of Suppressing Dissent 1 – 1 & 2 Stage 1 – Arguing –It’ll never work –The boss will never go for it –It is not what we do around here –Things are OK just the way they are Stage 2 – Listening but not Hearing (persisting with a wrong-headed view) –Yes, we’ve heard from you on that. Anybody else got some different ideas –Thanks for your contribution –Maybe you should put that in writing so we all have a good idea of what you mean 1 “Creating the Innovation Culture”, Frances Horibe

13 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 13 7 Stages of Suppressing Dissent 1 – 3, 4 & 5 Stage 3 – Laughing it Off –“If you’re so smart, how come you aren’t rich?” –“Can I give you a quarter so you can call someone who cares?” –The focus moves from the idea to the dissenter himself –This idea may be inconvenient, a CLM, or difficult Stage 4 - Ignoring Ridicule didn’t work, let’s try silence. Rolling eyeballs and sighs are prominent –“I don’t think we will get to your item today. Maybe next time” Stage 5 – Invisibility –Not notified of Meetings, removed from memo distribution, decisions without input 1 “Creating the Innovation Culture”, Frances Horibe

14 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 14 7 Stages of Suppressing Dissent 1 – 6 & 7 Stage 6 – Forbidding –“I forbid you to work on that.” –“Deal with your assigned tasks only.” –Any idea the dissenter has would never be done now Stage 7 – Getting Rid of the Dissenter –“I don’t think your skills are up to this position.” –“You need to report to Bob now. He’ll vet your ideas.” –“We don’t have a place for you in our organization.” –“Somebody has to be laid off. I regret it has to be you.” 1 “Creating the Innovation Culture”, Frances Horibe

15 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 15 Strategies for Success 2 Dissent does not have to be subversive Dissenters almost always have the best interest of the company are heart Keep dissent in the open. The open flow of ideas invites reflection. Reward failure as well as success “Group speak” is not always best – individual contributions outside group dynamics often return great ideas Speak truth to power 2 The Assumption Here is Management Supports Dissent

16 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 16 Why is Innovation Discouraged? Your parents probably told you…. –“It is not you that is bad, it is your behavior” Now if the parents could only learn that lesson…… –Every time you question some existing product, process, effort, etc. you are challenging the person, not the thing –Those that are threatened by open ideas, typically have low self- esteem, or been rewarded for consistency “Shooting the Messenger” sends a message that you can’t tolerate hearing bad news Passion, drive, out-of-the-box thinking – cause difficulties for organizations which see them as arrogance, unreasonableness, and an inability to compromise. You can’t get one without the other.

17 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 17 Teamwork What makes a team work? –A bunch of people that “get along” –A group that has a similar objective True? disband the team – drive individual performers If a team is a collaboration of different ideas, that, collectively, lead to a higher purpose, or greater good, then that is “teamwork” Years ago, the controversial Judge Borke was to be nominated to the Supreme Court. Protest arose, as his views were contrary to the rest of the court and mainstream thinking. –My opinion: If you want 9 judges with the same perspective, fire 8 of them

18 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 18 Teamwork – What is Healthy? From “IS Survival Guide” by Bob Lewis –If Julie thinks Fred’s idea is all wet, don’t you think it would be refreshing for Julie to say “Fred, that idea is all wet. Here is why I think so, here’s what I think is better and why.” –If your team had that kind of conversation, and nobody takes offense, you have a healthy team. Otherwise, it’s time to figure out how to fix your team. Cultures that support the free flow of ideas, without “personalizing” the activity, excel at innovation. You need to ask “why?”, an average of 5 times in any situation, to get to the root reason for performing an activity.

19 30 Sept 2003 (C) 2003, KPJ Squared, Inc. Slide 19 Conclusions E Pluribus Unum – Out of Many, One –Diversity made this country great –Striving for efficiency, and the associated consistency, has discouraged looking at alternative approaches –Diversity, particularly of Opinion, is Key to Driving Innovation Typical US Coastal Cultures Encourage this process Success stifles this process NOT suggesting leaving Mid-West; this should be recognized, not as a problem, but as an opportunity –Strategies for mitigating this situation are another discussion Your teams need to NOT discount any option and encourage dissenting opinions, as diverse viewpoints often bring clarity to direction, EVEN IF IT DOES NOT CHANGE THE DECISION!

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