systematize innovation

Managers are always complaining: "I know we should innovate, but why do we have to do it now? I'm going to start next quarter, the current problem is the immediate problem." There is nothing wrong with affairs, every business needs to increase revenue, raise prices (if possible) and reduce expenses, the pursuit of numbers will never change.

No innovation is a dead end

However, there is a contradiction here. If most companies continue to use the same method, through the same channels, and sell the same products to the same old customers, it will not be realized. Profits grow. People won't eat more hamburgers than they do now, demand more beer than they do now, and buy even modest home computers.

Businesses today simply can't increase revenue significantly - unless you can come up with new tricks that dazzle your customers, which isn't easy to do, especially with all-out spending cuts. But customers are always willing to accept products that are novel, practical, and can reflect value. Take DoCoMo, the maker of Internet-connected handsets, whose i-mode service has attracted 30 million customers in just 30 months. It can be seen that the development of enterprises is not impossible, but only by providing customers with unexpected and novel products can real success be achieved.

The same goes for raising product prices. Most companies don't dare to expect a price increase, but Starbucks has done it: the price of a cup of coffee is as high as $3.50! Among the single-flavored American coffee, Starbucks coffee has surprisingly many varieties. Starbucks has turned everyday routines like shopping at a coffee shop and passing time with coffee into a powerful and unique consumer experience. Getting customers to donate generously for their favorite products is far from fantasy, but to reverse declining profits, products must have a truly unique value proposition.

Reducing expenses is perhaps the most difficult of all jobs. Most companies have found that continuing to adopt traditional cost-saving strategies will inevitably adversely affect corporate profits, and few companies dare to cut costs one step ahead of their competitors. Like other problems, this point also requires a new ideas. Among companies that have weathered the recession, Dell Computer, Southwest Airlines and Wal-Mart are the standouts. All three companies have revolutionized the industry's traditional spending structure.

Adopt Radical Thinking

If you are going to outperform your lifeless counterparts, you must change your normal thinking in dealing with day-to-day affairs, and you must adopt a "radical" forward thinking. Many managers always see "aggressive" as a monster, for them, "aggressive" means high risk, wrong ideas and speculative plans. In fact, the so-called "radical" does not mean this at all, it must meet at least one of the following three criteria.

Being able to change customers' perceptions Not long ago, the home computer was the ugliest piece of furniture in the home. Apple hired a young British designer, Jonathan Ive, to transform the ugly look of the product into a sleek iMac that revolutionized the way customers thought about computers. Of course, in the computer industry, Apple is still not a first-class company, but it is product innovation that allows the company to survive. Apple continues to raise the public's expectations of the home computer, which is a radical innovation in the product.

To be able to change the basis of competition In the US, it has become almost the golden rule of the retail industry that people go to a Walmart or Saks Fifth Avenue chain to shop. As a result, it is even more difficult for those mid-sized retailers to make profits. However, Kohl's has successfully proved this point wrong. Although the number of Kohl's chain stores is only half that of Sears and only 1/3 of that of JC Penney, its market value is higher than those of the two century-old stores.

What kind of creativity does this rely on? Kohl's rethought the meaning of "department store" and began to refurbish the store. In their store, you definitely don't get that feeling of being in a dead warehouse-like pile of goods. Here, goods are displayed in such a way that customers can shop quickly and efficiently. "Our mission is to allow customers to spend less time shopping in our stores," said R. Lawrence Montgomery, general manager of Kohl's. By contrast, if you've been to Bloomingdale's or Saks, it's a different experience: they always set up the store so that customers can't figure it out, going back and forth in circles.

To be able to change the economics of the industry Southwest Airlines has adopted a point-to-point routing system that allows the airline to fly two or three hours longer than other Capital is more fully utilized. As a result, Southwest Airlines is worth more than the other five companies combined among its contemporaries.

Conventionality hinders innovation

At a recent dinner, I had the pleasure of sitting with Nobuyuki Idei, president of Sony Corporation. During the meeting, he talked about the huge success of the PlayStation, the most profitable product in the company's history. As he spoke, I couldn't help but think back to my interview with Ken Kutaragi, the inventor of the PlayStation, two years ago.

When Ken considered entering the video game business to create a business opportunity for Sony, no one in the company supported him. Sony was so disgusted with the video game industry that Ken moved his office to a very remote location on the outskirts of Tokyo. Despite the pressure, Ken managed to strike a deal with Nintendo to sell Sony's Zinc Sound Sheets to Nintendo in exchange for use of the Nintendo console (which he hoped would make with Nintendo). develop contacts to further acquire knowledge in this area). In the end, he finally got funding for the development of the PlayStation from one of the company's top managers. This person was the president of Sony Music Japan. He wanted to launch a CD-based PlayStation product to expand Sony Music. Scope of CD sales.

Here's the crux of the story: When I talked to Ken about PlayStation, he said his success didn't come from the company's backing, but from the company's backlash. This is by no means an isolated case, and most successful radical innovation successors will tell you how powerful the barriers are from their corporate system.

In most businesses, true innovation is the exception. The spirit of innovation is locked in a small room, engrossed in research and development or new product design, but has no impact on the rest of the enterprise. But we know that isolating innovative people in one corner of the business is actually limiting their enormous potential to create the future of the business. Now, the most urgent task of business management is to find a way to cultivate an advanced and systematic spirit of innovation in the enterprise.

To realize the systematization of the spirit of innovation, we must first realize that many enterprises are not conducive to innovation in terms of structure and system. This does not mean that the personnel in the enterprise are conservative and backward. The reason is that the views they hold allow companies to unknowingly hinder innovation.

Believing that change comes from the top of the business is one of the concepts that hinders innovation. I often ask corporate CEOs this question: "Who in your company is responsible for a fundamental shift in the strategic direction of the business?" Nine times out of ten they say "it's me" or "it's the board of directors" . But in my experience, the bottlenecks that hinder innovation almost exclusively exist at the top of the business. If in an enterprise, people are accustomed to waiting for the decision-making level to determine the development direction of the enterprise, it means that the vast majority of personnel have lost their sense of responsibility for innovation. When the decision-making power to determine the company's strategy and development direction falls into the hands of a few, the company's spirit of innovation and change is at stake. New thinking calls for new voices.

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Another point of view that hinders innovation is the self-proclaimed number one industry leader. If employees no longer question and challenge the daily business model, the company will decline. The Coca-Cola Company, for example, has been a laggard in every beverage trend for nearly two decades, one step behind in fruit tea (which was pioneered by Snapple), and then slower in sports drinks. One shot (Gatorade got the lead), then a laggard in pure water (Nestlé is the leader), and slow to respond to the new generation of beverages (they are still catching up with trendy beverages like Red Bull) enterprise). How could a beverage company struggling to gain market share miss so many opportunities? Like many companies like Compaq, Xerox and United Airlines, Coca-Cola is a prisoner of its own business model. This example tells us that conformity is the enemy of innovation. Every enterprise should introspect to ensure that the enterprise will not be buried in a backward business model.

Achieving Systematic Innovation

To achieve systematic and thorough innovation, two fundamental questions must be answered: How can breakthrough ideas be generated? How to manage this program?

In general, innovation comes from seeing the world differently. In our conversations with innovators, we found four main points of view.

Innovators dare to challenge the authority Dell questioned the dealership system, Southwest Airlines questioned the transfer station model, and The Body Shop opposed the use of skinny models to sell clothing. All of these businesses challenge the mindset.

Innovators are good at seeing things. Most managers have probably never heard of a woman named Chyna. One of her books has been on the New York Times bestseller list. This beautiful female fighter in a bright bikini is the female wrestler of the World Wrestling Congress (officially known as the World Wrestling Federation). In the fall of 2000, the organization's top live TV show, "Monday Night in the Ring," attracted a large American male audience, surpassing "Monday Night Football" by 47 percent. If I run a business whose customers are teenage boys and I don't know the name Chena, I can say I don't know my customers at all, and I can't innovate ahead of my competitors. . Every CEO should take the time to stay abreast of the latest developments in technology, entertainment, fashion and politics, where business opportunities often arise.

Innovators understand that satisfying customer needs is not innovation, and innovation almost always comes from unclear needs. We never explicitly asked for eBay, Starbucks, or downloadable music, and we got it all. Radical innovators can read people's expectations with extreme accuracy, and look beyond the surface to discover unexpressed needs in people's hearts. To discover such needs, you must learn to put yourself in the customer's heart.

The key problem of innovation is: the reason why people dare to try new things is not out of a lot of rational analysis, but out of the feeling and desire from the heart. This does not mean that the analysis is not important, but only when you really You will have the courage to innovate until you feel it, experience it firsthand, and believe in its correctness.

Innovators are good at combining business assets. The real basis of business development and innovation is the business's assets (brand, customer relationships and its user database) and its capabilities (technologies and ideas owned by its employees). One of the ways you can use it is to think of the world as a set of Lego bricks with different assets and skills, different businesses have many different parts, and all you can do is take what your business has Technology and assets are stitched together. Swatch does just that.

When Swatch fell apart against its Japanese rivals, it realized that it was impossible to beat Seiko in Seiko style, it had to develop distinctive features. Nicholas G. Hayek, a former consultant to the company and founder of the Swatch Concept, combined Swiss watch-making skills with Italian fashion design, and drew inspiration from the plastic processing of Lego blocks. Created watches with a very different style from Casio, Citizen and Seiko.

In order to avoid the limitations of the current business model of the company, do not think of your company as a business, but as a combination of fixed and current assets. Then, forget about the scope of your company's business and ask yourself, "Is it possible to break out of the old boring business model and make a radical change?" Eventually you will find that the business is not about what you want to do, but about what you know. what.

Shell provides a case study

Royal Dutch/Shell has implemented this positive change and continues to create opportunities for employees within the company to implement various reform programs. In fact, the project's name is "Game Changer."

The Game Changers program began with Shell's Development and Production Division (E&P). The head of product development intends to allocate 10 percent of the department's budget to projects with significant transformative potential. The question is how to find such projects and secure them funding in a corporate culture that is notoriously conservative. Therefore, Shell first selected a small group of mid-level employees with different specialties to form a core group of "game changers". These people are both creative and can make full use of the technical resources of various departments of the enterprise to evaluate various ideas.

The "Game Changers" panel conducts a first round of review of various program ideas. Plans that pass the first round of review will be sent to the "Innovation Lab", where team members work together to process and refine these reform ideas. After passing this level, the plan will enter the next stage of the "feasibility laboratory" for testing. The job here is not to test the plan itself, but to devise a scenario that will allow Shell to actually implement the idea while controlling the risk. The question addressed by this step is clear: what technical support is needed to implement this idea? How can an inexpensive simulation system be built while keeping costs in check? Investments in such original plans are generally controlled at the level of $10,000 to $50,000. If the plan goes well, more funding will be available.

The "Game Changer" program started in one division and has now spread throughout Shell. The company's own "game changer" team specializes in ideas that go beyond the scope of existing business projects. In addition, each department also has its own "game changer" program.

Now, an employee with an innovative idea applies to the "Game Changers" caucus for a small start-up funding and will get an answer within 5 days. What's more, most of the new ideas are not new or far-reaching ideas, but focus on breaking out of the company's existing boundaries.

Shell recognises that the key to systematic innovation is to establish a process. In this process, new ideas are inspected and approved by ordinary employees, rather than being rigidly reported step by step, and ideas that break through the routine can receive financial support from various aspects of this process. The goal is to create a system that mimics the mechanics of the market, where ideas, talent and capital can be quickly combined.

We can't rush forward and expect it to happen overnight. Just as we used to improve product quality and achieve real customer service, we have to go through the same process in innovation: through a series of steps, gradually establish new technologies, new standards, create new procedures, new values, and finally turn dreams into for reality.

The most important thing is to have a clear goal of moving forward, so that these steps will lead you in a new direction, and one day, you will find that you have entered a new world that has never been reached before.

About the author: The original text is taken from Innovation Now! with permission from Fast Company. The author registered copyright in 2002. Translated by Zhu Xiaofan.

Gary Hamel is the founder and president of Strategos. The author's main book is Leading the Revolution: How to Thrive in Turbulent Times by Making Innovation a Way of Life.