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Vol. 4 — No. 2
Innovation: What does it take?
The
Kauffman Foundation was recently the host of a distinguished group of thought
leaders on the subject of Innovation. The Secretary of Commerce, Carlos
Gutierrez, assembled a group in Kansas
City to serve as one of four national Forums on
Innovation Drivers and Impediments. The motivation was the recent completion
of The Innovation Measurement
study, chaired by Carl Schramm of the Kauffman Foundation and commissioned by
Secretary Gutierrez.
In
addition to Secretary Gutierrez and Carl Schramm, the panel included Len
Rodman, Chairman, President and CEO of Black and Veatch,
Bill Zollars, Chairman, President and CEO of YRC
Worldwide and Emily DeRocco, President, National Center for the American Workforce and
Senior Vice President of the National Association of Manufacturers. They
spoke in front of a crowded room at the Kauffman Center
on Monday March 17.
Several
important themes emerged in their discussion surrounding Innovation Drivers
and Impediments:
• Innovation
is the legacy of American business, with their track record of producing
enhanced economic value through innovation. This is something all business
owners can be proud of!
• The
loss of the baby boom generation and their expertise is expected to be a
significant and growing concern for American business. Particularly when it
is evident that this generation is not being replaced in quantity or quality.
The drop-out rate in the
US
is high and growing, meaning a good part of the work
force is not prepared. And the training of those in the system is not focused
on the topics of math, science and engineering. Only 11% of degrees in the US
are granted in natural science or engineering compared to the world average
of 23%.
• On
the positive side, companies are searching for the new rules of innovation.
Interestingly, the Secretary of Commerce asserted that those doing the most
innovative work institute new rules for old ones. In other words, innovation
requires a paradigm shift and to make it happen requires change. But for
change to occur, direction must be provided about the new boundaries.
This encourages the risk-taking necessary to make the shift. This was evident
in some of YRC’s new policies (such as eliminating
silos by moving 95% of the decisions to the field so they could be made
closer to the customer, agreeing to “fail fast” and exit programs that
weren’t working, and not breathing more life into failing legacy systems,
instead insisting 60% of technology investments be in new technology.)
Secretary Gutierrez concluded this discussion by suggesting that the rules,
while important, must stay conceptual, not tactical, and the role of
executives is to determine these conceptual rules. For example, YRC says that
innovations will be rewarded regardless of whether they succeed or fail if
they were designed to add value to the customer and the company.
• Communication
is an important part of stimulating new ideas. Creating cross-functional
teams of diverse backgrounds or geographies, providing access to needed
information across those same boundaries, and populating teams with
“innovation carriers” or people who are inclined to stimulate innovation are
important parts of generating innovation.
Equally important is the celebration of innovation—wins and failures—as well
as executive modeling of the desired behavior and the non-verbal
reinforcement which that sends to the organization.
• The
educational systems are not keeping up with the needs of commerce. According
to Ms. DeRocco, this applies to high schools (where
we need to retain students and offer vocational educational paths) through
post secondary schools (which need to provide open access to support life
time learning).
Mr. Zollars added that business schools are not
doing enough in the area of teaching people how to work in teams since
“business is a team sport.” All agreed that while more emphasis on math and
science is needed, innovation cannot be spawned by one functional group, but
rather through a balance of know-how with customer insight.
In
conclusion, Secretary Gutierrez made the observation that in his experience,
government would benefit from applying many of the same principles as
business and pushing decision making closer to the customer. An interesting
thought!
For more information on how to integrate
these ideas into your company strategy, contact Margaret Reynolds, Managing Principal of
Reynolds Consulting, LLC at mreynolds@reynolds-consulting.com.
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“Innovation
is the specific instrument of entrepreneurship. The act
that endows resources with a new capacity to create wealth.”
– Peter F. Drucker
News
April 14 - Reynolds
Consulting, LLC will be presenting a workshop titled, "Developing a Winning Strategy" as
part of the mentor training program offered by the Helzberg Entrepreneurial
Mentoring Program.
July 30 – Reynolds
Consulting, LLC will make a presentation on the topic of "Customer Experience" at the Central
Exchange from 11:30am-1:00pm. If you are interested in attending, just call
Noreen Bridgham at (816) 471-7560
ext 12.
Roundtables Available
Reynolds Consulting, LLC has
hosted two very successful executive roundtables in the last few months.
These workshops combine a short best practice presentation with a
facilitated group discussion and can be done with a wide variety of
specific topics tailored to the needs of your organization.
If you are interested in having a workshop conducted for your organization,
please
contact Margaret Reynolds at mreynolds@reynolds-consulting.com.
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