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Wednesday, October 9, 2013

When You’re Innovating, Think Inside the Box 10-08

When You’re Innovating, Think Inside the Box

A company noticed a strange anomaly: One of its manufacturing plants had a significantly lower scrap rate. That little finding and its consequences illustrate a point that managers often overlook in their search for innovation: Sometimes it’s better to think inside the box.
Companies spend a lot of time and effort trying to adapt ideas from other industries and other disciplines, but I would guess there’s at least one idea lurking within your own company that you could use to great advantage. That’s why I say think inside the box – the box being your organization. Of course, if there’s a great idea, it’s probably hidden away inside the corporate maze.
That was the case with the company that noticed the lower scrap rate. A lower scrap rate implies a more-efficient manufacturing process. But what was the plant doing differently? Corporate managers went out to take a look.
They found that an engineer at the division, which did injection molding, had developed a way of preprocessing the plastic pellets so that when they were fed into the system, they flowed more smoothly. The machines didn’t have to be cleaned as frequently, and there was less scrap.
The innovation had been applied to most of the machines at the plant, but not beyond. Why? Because the division’s managers hadn’t seen the idea as all that special. It was such a simple improvement – it required just a small amount of inexpensive equipment – that it wasn’t even big enough to be called a “project.” Companywide dissemination of the idea turned out to be easy, and the entire corporation benefited.
Very few companies have cultures that promote dissemination of good ideas. Instead, there are barriers everywhere. Plant managers are too busy to think about other plants’ needs. Divisions that are competing for scarce resources hoard their advantageous ideas. Engineers in one country don’t communicate well with their colleagues in another.
So the reality is you have to go prospecting for ideas within your own company. Here are a few best practices:
Look for anomalies. If your company keeps business-unit dashboards, look for data showing 2X differences. If your unit has a 4% customer-complaint rate, for example, look for a unit with a 2% rate. Why is your group’s rate 2X the other group’s? They’re probably using a different process. Find out what they’re doing right.
Build relationships. Managers typically despise organizationwide meetings, seeing them as time sinks. But don’t be so quick to try to get out of meetings with people from other divisions. Once you get to know them, you can ask: “By the way, how do you handle this or that?” Or “Can I swap engineers with you?” Pretty soon, the ideas will start flowing.
Study acquired companies. After making an acquisition, companies have a tendency to tell their new subsidiaries: “Do it our way.” But before that change happens, look at what the acquired company does well, and find out their M.O. – it might be better than your company’s way.
Study suppliers. Companies that supply to your company can be sources of ideas, either because they do certain things well or they have capabilities you aren’t tapping into. For example, a company that was buying standard printed-circuit boards discovered by chance that they came with wifi capability, a feature that the purchaser hadn’t requested.
 A circuit board with wifi can send information about the product, such as that a particular component is wearing out. The purchasing company made use of this previously unsuspected capability to offer its customers a component-monitoring service at a higher price point.
Push for a more open culture. I’m always surprised at how many companies don’t publish their measures internally. Try to persuade your company to institutionalize the exchange of information. One company I’m familiar with has developed a culture of best-practice sharing. During the annual budgeting process, each operating division is required to cite two best practices it implemented in the past year. The company also regularly moves managers among divisions to spread knowledge.
Of course, some ways of disseminating knowledge are more effective than others. A lot of companies today use online knowledge-sharing systems. Those can work well, but only if the person who “owns” and manages the system is a subject-matter expert, rather than an IT person whose main role is to keep the server running. A subject-matter expert who is assigned to ensuring that the site is full of ideas can make the difference between a useless and useful system.
It’s often said that one factor hampering people’s ability to learn is that they don’t know what they don’t know. Companies have a different problem: They typically don’t know what they do know. In the quest for ideas, make sure you take time to investigate the innovation that’s happening in remote corners of your own organization.