The saying goes that every general prepares and fights the last war. Thus, in the 80s we were hammered by high quality, reliable products from Japan, and American industry lost no time in deploying Deming's ideas. Deming was an American who could find no audience for his ideas in this country, so off to Japan to improve the businesses returing from the war.
However, just as firms have fully deployed the tools for efficiency and effectiveness, a new battleground is unfolding. To continue the war analogy, we are shifting from large, static set piece battles that unfold over open terrain to small, rapid skirmishes that pop up unexpectedly in tight quarters. In layman's terms, the era of the long product life cycle is over, and with increasing competition from many parts of the globe, low entry costs in many markets and the rapid distribution of information over the web, any existing product or market is under constant attack, and consumers have more choices and become more fickle than ever before. In Relentless Innovation we examine the challenges of restoring a balance in a business model between efficiency and innovation.
What this means is that the tools so many executives have relied on to build highly efficient, effective businesses that achieve short term financial goals are now similar to the famous Maginot line - a great investment meant to fight the last war, which is now a millstone hindering a rapid response.
Don't get me wrong - efficiency and effective use of inputs and resources is still important - its just that they are no longer paramount. Equally important is the ability to create new ideas and bring them to market rapidly. Unfortunately the existing, highly optimized business models and processes don't adjust well to innovation. Business as usual is not attuned to working with unusual, disruptive ideas, and often simply ignores or rejects the ideas.
Six Sigma, Lean and other efficiency tools must be balanced with new thinking, new perspectives and new tools which foster far more innovation, far more quickly. Rather than the existing "business as usual" frameworks, many companies must adopt an "innovation business as usual framework" which encourages innovation as a regular operating discipline, rather than a strange, occasional occurance. For that to happen, business models must change to welcome innovation, while remaining relatively efficient.
Who must lead this charge? The people tasked with operational effectiveness - mid and senior level managers. They must become multi-dimensional, expert at efficiency and the effective use of resources given existing constraints, while also expert at generating, developing and managing new ideas and quickly translating them into new products and services. Rather than a either/or, business models must rapidly become a "both/and".
We've elevated some of these tools to the high priesthood. Many firms have more blackbelts than a Bruce Lee movie. It's about time to hire or train some new blackbelts, but this time the learning will be about innovation, rather than efficiency. You can read some of our suggestions for restoring that balance in our presentation Striking a Balance between innovation and efficiency.