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    Improvement VS Innovation #02 Innovation Newsletter

    Why Innovate – Or – When Is Improvement Not Enough?

    Some people see improvement and innovation existing along a continuum, with the major differences lying in the scale and impact of change and the level of risk involved. Others believe that innovation demands a completely different skill-set – one that requires unique talent, creativity, and mindset – and is strategic rather than tactical.

    Are both points of view valid? Can the same approaches be used in innovation and improvement? And how do you know when improvement is not enough and innovation (if it is a different skill-set) must take over?

    The scope of « improvement »

    Improvement eliminates waste of all kinds, improves quality, frees capacity, and increases the value-add time of employees.

    Improvement objectives normally start with the status quoin products and processes; that status quo is intensively reviewed, often in week-long kaizen events designed to achieve rapid improvement, as well as in daily improvement activities that accumulate over time and result in significant change. Continuous improvement can lay the foundation for growth and for maintaining competitiveness in the existing landscape. But continuous improvement processes are generally aimed at improving existing value propositions, not creating new ones or making radical changes. And most companies adopt continuous improvement practices with the aim of seeing the financial impact on the bottom line.

    Ask yourself this question: If we could remove virtually all waste from our existing products and processes, would that be sufficient to enable the long-term survival of our organization?

    In a rapidly changing economic and technological environment, the answer to that question for almost every business is « No; we need reliable pathways for creating radically new value propositions. » That kind of bold change does require a shift in mindset – you’re reaching into uncharted territory with radical new goals versus starting from the status-quo baseline.

    When to think « innovation »

    Strategic innovation is a process for creating new value propositions aimed directly at top-line growth. Typically people think that means « new products, » and it can.

    But innovation can also be applied to all areas of your business model: new value propositions can be generated around services, processes, distribution channels, partner networks, market space, and more.

    At The TPM Experience conference in Baltimore last week, Andy Meyerhofer, plant manager of the CertainTeed vinyl siding plant in Jackson, Michigan, told a vivid story of his group’s experience negotiating the line between improvement and more radical change in process design. With a strong improvement track record at the plant, a team had attempted to achieve radical change in a problematic packaging process using a kaizen approach, only to discard the « improvement » shortly after the event.

    Why? Because it didn’t solve the problem. They’d gotten mired in improving the existing process when they really needed to be devising a completely new one. After reflecting on the experience, and recognizing the need for a very different and more intensive approach to the problem (and after much consideration of the risk/reward quotient) Meyerhofer committed to using a more radical change methodology that employs more of the innovation skill-set – 3P. (3P is a method in which employee teams conceptualize, develop, validate, and deploy radical or revolutionary change in product and/or process design.)

    « Innovation » results

    The 3P process was far more time-intensive than a kaizen event, and required significant investment of resources. Since the team was moving into uncharted territory, the solution was murky at the outset.

    But the business case had been carefully established and was continually monitored, upper management was supportive and informed throughout the innovation and experimentation stages, and the end result was a groundbreaking solution that radically changed the packaging process for the company. Gaining experience with the 3P methodology also provided a firm foundation for enabling radical change in other process areas of the company, and has resulted in the discovery of game-changing, new-to-industry solutions that qualify as trade secrets for the company.

    The moral of the story: applying tried-and-true improvement tools when more radical change is required won’t lead to successful change. If you have unsuccessfully approached a key business problem with a kaizen mindset, it may be time to consider a new approach that relies on innovation skill-sets.

    The key is recognizing when the scope of the problem at hand necessitates an approach that will go beyond incremental or moderate improvement from the status quo.

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