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Thursday, October 25, 2012

Other Side of Innovation: Post#3--Production

Innovation and production: Thomas Edison’s famous quote introduces this book: “Genius is 1 percent inspiration, 99 percent perspiration.” The authors’ simple formula:  Innovation = Ideas + Execution.  Examples: Nucor, the innovative steel maker, pioneered widely distributed mini-mills and pushed innovation by cross-training employees and rotating them among plants and paying for innovative ideas from all employees—empowering processes that produced real innovation. John Deere perfected the innovative discipline of documenting every step of their process that can be used over and over and improved on to drive new innovations. However, while companies may start off as innovative engines, as they mature, they turn into  “Performance Engines” designed to produce reliable products at a scale of sustainable profitability—short-term performance beats down long-term innovation every time. Performance Engines (PE) want processes that are both repeatable and predictable, but innovation is the opposite—uncertain and unpredictable. Thus, the first rule of innovation: “Innovation and ongoing operations are always and inevitably in conflict” (p. 11).

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