When I read General Motors’ recent announcement to shut down three automotive production facilities in Ontario I was not surprised but I was disappointed. Why? Because it belies their current state of operation—one that I hazard to guess is short term thinking-oriented and devoid of innovation.
Looking back to November 2005, when GM announced its third downsizing since the early 1980s, GM has struggled to catch up with changes that it badly misjudged—the demand for smaller cars in the late 1970s; the superior quality and production techniques of Japanese manufacturers in the 1980s and the demand for snazzier cars with better fuel efficiency in this decade.
It seems that GM just keeps missing the boat. In an article posted on February 23, 2007 on Motortrend.com, car enthusiasts who decided to challenge claims by General Motors of mileage ratings on all of their 23 vehicles for 2008, found that 14 of the 23 vehicles from General Motors failed to reach 30 mpg highway, using the new Environmental Protection Agency method to estimate fuel economy for 2008 model year. This included the Saturn VUE Hybrid!
GM’s production cuts stand in stark contrast to the now number-one auto-maker Toyota. While GM keeps cutting production, Toyota has been increasing its production. In 2006, Toyota increased production of its Prius by 50%! The Prius has been a poster child for hybrid cars around the world, and Toyota is doing all it can to keep up with production. In March 2008 Toyota ramped up the Prius production even further, by a full 60 percent worldwide.
So why is Toyota able to succeed as one of the most profitable companies in the world? The answer is simple, innovation. Toyota implements one million new creative ideas each year. In his book, “The Elegant Solution: Toyota’s Formula for Mastering Innovation,” author Matthew E. May, a senior University of Toyota advisor reveals that Toyota’s business is driven by a business innovation index that operates by three guiding principles: Ingenuity, Pursuit of Perfection and Fit. These three principles create both the policy and framework at Toyota for driving innovation and creating elegant solutions. May asserts that these three principles are non-negotiable and must be adhered to by everyone at Toyota.
Furthermore, Toyota consistently avoids obstacles that hinder sustainable business innovation. These innovation blockers are “temptations,” which are about taking short cuts, trying to hit a home run every time, creating products too complex that are top loaded with extra dressing, and without a real understanding of the innate customer need. Do any of these obstacles sound like any of GM’s mistakes?
At the end of the day, innovation is about collective experiences, best practices and insights about creativity. It’s got to be driven from the top down and must engage everyone in the organization. Here are some suggestions for making innovations:
1. Let Learning Lead
Learning and innovation go hand in hand, but learning comes first. Innovation is not the result of a lone genius inventor who comes up with a great idea. Rather, it is a collaborative process; where people in many fields contribute to unearth the latent needs of the customers and perceive the emerging needs.
2. Uncover Latent Needs
The best solutions usually come from customers so it is important to “live in their world” to unearth latent needs and perceive emerging trends. Make sure that Innovation is a team-based effort where the team consists of a diversity of stakeholders who are willing to challenge the status quo.
3. Focus on Clear and Present Needs
Innovation that drives business in today’s market is likely to get funded and succeed so focus on clear and present needs.
4. Visualize the Idea
It’s also important to think big and think in pictures. Visual imagery is an important tool to capture your visions and ideas.
5. Capture the Intangible
The most compelling solutions are often perceptual and emotional. Therefore, intuition is required. Intuition is necessary to read your customer’s minds so as to capture the intangible.
6. Leverage the Limits
Resource constraints can spur ingenuity. After all, there is nothing more motivating than restraining forces to challenge the status quo and drive change. Innovation has to be disruptive to be successful. To manage it, it is critical to know what you can deliver, how you can deliver and by when.
7. Forgive Mistakes
At the same time, accept that mistakes will be made and learn how to master the tension. As Woody Allen so aptly puts it, “If you’re not failing every now and again, it’s a sign that you’re not doing anything very innovative.”
8. Run the Numbers
While instinct is necessary, we need to temper instinct with insight. A sound technical analysis is critical that takes into account such factors as risks, probabilities of success, and lessons learned from past projects.
9. Put Quality First
Pursuing perfection requires great discipline. Innovation is a process and requires a standard. Create a standard, follow it and find a better way.
10. Keep it Simple
I recently read a quote from Albert Einstein that says, “When the solution is simple, God is answering.” True innovation happens when you can simplify the intended application and make it so easy-to-use that it becomes a no-brainer.
Innovation is a requirement for leadership and longevity. And it needs to be holistically adopted by organizations; as part of the culture. Operationally an organizational culture that prioritizes innovation will make sure to establish an innovation process that is woven through all aspects of its operation.
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