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Strategic execution- please stop innovating

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Friday, February 01, 2013

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02.01.13 Blog WagonWheelWant more real breakthroughs faster in your firm or department? Here’s an easy way: stop “innovating” so much.

That counter-intuitive approach is the unavoidable conclusion of a fresh look at how most firms approach innovation. You’re probably making one or more of these innovation errors. Fixing them will boost your performance.

The three major ways people mis-handle innovation are: wheel reinvention, over-focus on the core, and putting people first (in the wrong way).

Re-Inventing the Wheel

Fred is a lighting and electrical engineer for a firm that designs and builds the interiors of buildings (light, HVAC, power, etc.). They have a core need to run projects, and run them very well. When Fred saw that his firm was unnecessarily losing money too often on projects, he made a classic mistake — he started to re-design the project management process. Himself. Then, he made another version of that mistake, recruiting some peers to help him re-design their project management approach. In isolation. Then, they made a third version of that mistake, inviting everyone in their firm who was interested, to contribute to the effort.

Here’s the key — all of them had engineering degrees, yet none of them had heard of the Project Management Institute (PMI). Fred was doing a great job of including internal stakeholders. He just wasn’t aware of a universe of external people who had solved most of his project management problems.

PMI gives professional certifications — such as the PMP (Project Management Professional). PMI publishes a massive reference book, the PMBOK (Project Management Body of Knowledge) that includes chapters on all Fred’s major problems. PMI and its affiliated vendors run in-person and online training in all areas of the PMBOK needed to earn the PMP.

Fred was leading a hopeless effort to re-invent the PMBOK from first principles. And he didn’t even know it. All that time and energy could have been saved, and his firm could have made massive improvements in mere months, if he’d looked outside for some ideas.

When tackling a tough problem, avoid taking a risky trip up the Productization Path.

An Idea is not a Product

An Idea is only a Product when it works outside the lab, in the rest of the world. For example, turning an idea into a piece of software may take as little as 10% of the total effort to bring it to market — the other 90% comes from the rest of the trip up the Productization Path — creating the elements of a Product — quality tests, documentation, user training, a support team, training for the support team, a stock of replacement parts (for hardware products), maintenance manuals, distribution channels (for new product lines), pricing, sales training, sales support material, etc.

The “Sapling Saver” is a great example. The inventor, Craig Smith (on whose advisory board I sit), patented the design years ago. Right now he’s walking the long road to productization — building prototypes, filming promotional videos, talking to potential wholesalers and partners.

Once he’s done, he’ll have a Product.

Risk of the Productization Path

Now, suppose you own a large landscaping firm, and you know you spend $15,000 a year replacing plants that your crews damage while trimming weeds. You have a choice of (a) continuing to pay that money; (b) re-inventing the Sapling Saver yourself (and then maintaining your own equipment) at a cost of many thousands of dollars and several years, or (c) buying real Sapling Savers off-the-shelf for all your crews for $5,000, and getting a warranty, access to replacements, free training videos, etc. Only a nut would pick “b” — yet we do.

Every time you try to develop a solution in-house, you take on all the risks of Productization.

If you can get a good-enough alternative off-the-shelf, you should. If you’re a leader and your people come to you seeking approval for an in-house innovation effort, require them to look outside first. (A great resource for that is Skip Sponsel’s Emerging Technology Accelerator, a searchable database of productized innovations.)

That’s what happened at Northwest UAV Propulsion Systems. NWUAV is one of the largest manufacturers of engines and propulsion systems for UAVs (unmanned aerial vehicles) in the U.S. Tiny UAV engines normally struggle to turn heavy fuels like diesel (the fuel mandated by their major customers) into uniform, tiny droplets that burn efficiently. Chris Harris and his team at NWUAV opted not to spend years inventing some new droplet-making technology — they licensed five Hewlett Packard ink-jet printer patents, for turning heavy ink into uniform, tiny droplets. The choice leap-frogged their development effort by years — and by licensing patents, they reduced their risk of a competitor acquiring that same technology. Now they’re a sought-after strategic partner — they recently formed an alliance with Ricardo and XRDi, two other major players in the UAV industry.

They still have to innovate to adapt the ink-jet technology to the heat and vibration of a flying engine — but that’s something they know nobody else has done.

We’ll cover Over-Focus on the Core, and Putting People First (in the wrong way), in future columns.

Tom Cox is a Beaverton consultant, author and speaker. He coaches CEOs on how to boost performance by building workplace trust.



0 #1 DirectorGuest 2013-02-02 20:16:16
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0 #2 I appreciate the sentiment butGuest 2013-03-08 02:53:12
Yes well-meaning people can squander resources. Yes, execution is hard work. And yes, "buy it" is often smarter than "build it". But it is a mistake to conclude from those observations that companies should stop innovating "so much". Most companies don't innovate enough.

Fred had a good idea in trying to improve project management (and many organizations need such improvement). There must have been a problem. Why would anyone want to discourage the kind of thinking that was bold enough to recognize it? He didn't have the skills to guide the improvement initiative. That is a different matter. And the PMBOK you refer to is so comprehensive that it is better used as a body of knowledge than a body of practice. As a PMI-certified project manager, I can tell you that from experience and from the experiences of my peers. Fred needed help, he didn't need a slap on the wrist.

Craig Smith is already innovating, so I don't know why you used him as support for your advice to stop innovating so much. If you're trying to say execution is important, I don't think anyone will argue with that.

And with NWUAV, you said it at the end: "they still have to innovate".

When I read your examples, I conclude two things: (1) innovation in a vacuum can be counter-product ive, and (2) there is a knack and a skill involved in real innovation. So my advice to innovators would be to be aware of the vacuum, the knack, and the skills, and to seek help in filling it. That is a far cry from advising them to stop.
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0 #3 PresidentGuest 2013-04-04 16:08:37
You make an excellent point about first finding out what is already available before “reinventing the wheel.” Engineers are especially prone to falling into this trap. In fact, there’s yet one more “engineers’ trap” which is yet more prevalent. It’s the tendency to over-design products and services.

Some years ago, a client of mine – a residential real estate developer in Southern California –developed a new model single-family home. While the initial specification called for the home to be “affordably priced,” the design team added a few “extras” such as a more spacious kitchen, upgrades in flooring, and some architectural “niceties.” Naturally, these goodies added cost for the developer who then had to raise the selling price of the home. The company ended up with a home somewhat overpriced for the area. Fortunately for the developer, with a bit of time, and with some help from a “hot market,” the homes all sold. Not all over-designers are so fortunate. Many end up with a product or service which they can’t sell.

You’ll need to control the development of any new product or service. First find out what your customers want to purchase, and at what price. Then figure out if you can produce the product or provide the service at a low enough cost so you can make an acceptable profit selling at that price. Then communicate those specifications, along with the target production cost, to your design team. And, for goodness sake, manage the project so your design folks develop to – rather than over – the specifications and the target cost.

Hey, I know what it’s like. I have an engineering degree. I’ve designed my share of products. I know how enticing it is to add just one more little “goodie” to a product or service. Beware however. Bells and whistles can be very, very costly. Consider this question: How much does it cost your company to launch a new product or service? OK, now what if that product or service were to miss its market? What if your customers simply wouldn’t purchase your product or service? How much would you lose?
Bill Birnbaum, MBA
President, Birnbaum Associates
Business Strategy Consultants
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