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Monday, Sep. 19, 2011
Systematic approach, not stars, key to innovation, expert says
Being innovative as a company depends not solely on talented, creative individuals but more on systematic approaches that facilitate the creation of innovative products and services, says Steven Wheelwright, president of Brigham Young University -Hawaii.
"Many people think of a single person and innovator and entrepreneur who is very creative and drives the organization . . . You need creative people but creative people aren't enough to make it successful," the Harvard Business School professor emeritus told a seminar in Tokyo on Aug. 29 organized by the Keizai Koho Center.
Creating a "culture of innovation" — a concept touted in recent years for building organizations where people have lots of ideas — may work, but its success "is very dependent on the personalities of the leaders of the organization," he said.
A systematic approach, he noted, requires a "much more focused effort on creating an organization that knows how it goes through the essential steps of innovation."
Speaking on the theme of "Innovation and creativity for successful new products and services," Wheelwright noted how General Motors and Ford "long had the resources" to do what Toyota did in launching hybrid cars.
"But they never did it because they did not have the systematic organization and the perspective that was really needed to be creative and innovative in a lot of their products," the scholar said. Today, it is companies like Toyota or Honda that many consumers think of as being innovative because they "put in place a system that was reliable and could turn out new product lines and apply new technology," he observed.
When companies launch new products and services, managers can exert a bigger influence on the outcome the earlier they get involved in the different phases of the project, Wheelwright said.
However, studies show that in a majority of projects in most companies, managers start getting involved only close to the final phase — after they start getting feedback on the prototypes, for example — even though their leverage on the outcome will be limited because many of the key decisions on the core technologies or main features of the product have already been made, he pointed out.
Instead, managers need to get involved from the initial phase of a project to "get the right concept or definition of the product and the idea of the service that you're going to create," he said.
In launching the Prius, Toyota knew it would not get the hybrid vehicle right in its first generation, he said. So they made a plan, and once the first generation was launched they immediately began working on the next generation, he said.
"This idea of going through generations of product is fundamental to being successful over time as an innovator," the scholar said.
The core characteristics of the platform need to be viable for an extended period of time because "you're not going to be changing your platform — an expensive design product — every few months," he noted. And the platform needs to be expandable so it accommodate additional innovations later, he said.
The management team needs to set a "strategic mix of projects" for the organization, ranging from breakthrough innovations and platform building to derivative projects, Wheelwright said.
This will eventually bring up the key issue of "capacity management," where companies make the common mistake of having too many projects going at the same time, Wheelwright said.
Management needs to apply discipline and set priorities because assigning staff to too many projects will reduce productivity and slow down all of the projects, he said.
"When innovation projects take longer than they should, they won't be the first on the market and won't be innovative," he said.
What separates the Steve Jobs who was Apple Computer Inc.'s CEO in the early 1980s from the Steve Jobs who later returned to claim its helm, Wheelwright said, is that the one fired in the '80s was "the innovator and creator," representing the "traditional view of one person being innovative."
The Steve Jobs later rehired "understood all about what management needs to manage the innovation project — to get the right mix of projects and the right type of assignments for the people, he said. "He didn't understand it" in his early years at Apple and "he was trying to do it all himself, and the company got too big and he couldn't do it."
Now the question is whether Jobs, who has stepped down as CEO, has taught his men well enough to be able to continue what he was doing after he made his comeback, Wheelwright said.
His guess, he said, is that Jobs has succeeded in doing that "because they're a big enough company and that they've got enough product lines so there must be lots of people involved in this process."