process innovation

Employee happiness matters more than you think

Originally published on September 16, 2014 as a Guest Column in The Globe and Mail: http://www.theglobeandmail.com/report-on-business/small-business/sb-digital/innovation/employee-happiness-matters-more-than-you-think/article20600181

I remember the flight well: It was 2010 and our first book on innovation had been successfully released. I was on my way to Cannes to deliver a workshop at the annual World Innovation Convention, and was excited to be making the trip.

What struck me was the fact that the companies attending this conference didn’t just represent billions of dollars in spending and revenue – they represented tens of billions of dollars. My business wasn’t even a rounding error for them.

In my workshop, I focused on the generation of small, incremental ideas: those ‘little things’ that leave a big footprint on your organization and most importantly on revenue. Following my presentation, the chief innovation officer of a major U.S. company approached me. He told me that the company had grown to such a mammoth size over the years that it cost more to submit an internal proposal for a new idea than it did to start the company in the first place.

This was a business-changing conversation for me. As an entrepreneur, I gained insight into the value that a boutique consulting firm can bring to the global marketplace. As an innovation thought leader, this encounter made me recognize the importance of intrapreneurship: eliminating the barriers that squelch bottom-up internal innovation.

Intrapreneuring, of course, is all about empowering your work force to think like owners, and identify and implement ideas to move the business forward. It’s about managers doing less telling and more listening. It sounds simple and should be intuitive. But true intrapreneurship has been surprisingly slow to emerge.

Its importance was recently reinforced by LinkedIn founder Reid Hoffman in his new book The Alliance: Managing Talent in the Networked Age. “Companies need entrepreneurial talent throughout the organization in order to respond to rapid changes.” The importance of intrapreneurship, however, goes further than idea generation. Empowering your people has an additional benefit: besides new ideas to improve products, services and process, it helps to surface new ways attract, engage and retain great people.

Why is this important to all of us? Because if business success depends on happy customers, happy customers come from energized, engaged employees. A recent article co-authored by McKinsey and the Disney Institute offers this important insight: “The secret to delighting customers? Put employees first.” When employees are encouraged and motivated to do their best work, they will continually delight your customers with new and better products and services.

The same article goes on to say, “companies that had a 1-percentage-point lead over their peers in key customer journeys typically enjoyed a 2-percentage-point advantage in revenue growth. In addition, companies that deliver excellent customer journeys increase employee satisfaction and engagement by 30 per cent.”

It’s all intuitive, really. Who’s better positioned to recognize new opportunities for better products and processes than those who meet customers every day? And what better way to motivate and engage your workforce than to listen to them and respect their insights?

Having spent many years in manufacturing, I’m impressed with American Airlines’ Fuel Smart program. Founded in 2005, the program aims to reduce fuel consumption by implementing employees’ suggestions. Through simple ideas from employees, like using one engine during taxiing, American Airlines has saved billions of dollars in reduced fuel costs. This concept resonates with me because I have always engaged my employees to help my company do things better, and saved thousands of dollars along the way, which for small businesses is a big deal.

As an entrepreneur, I’m also moved by Adobe’s Red Box innovation program. As a 2013 Adobe blogpost, “Imagination Sparks Innovation,” explains, “at Adobe, we truly believe that anyone in the company, irrespective of title or function, can innovate.” To bring employees’ ideas to life with minimal management interference, Adobe developed its KickStart Innovation Workshop. “Employees are given a red box. Inside is everything they need to become an Adobe Innovator, including some seed money on a pre-paid credit card with a step-by-step process to originate an innovative new concept, and then use that money to validate that concept with customers.” Imagine that: A suggestion box that offers recognition, process and capital.

As entrepreneurs, we may not be able to give everybody in our organization a ‘red box’ to test new ideas. But we can certainly take the time to listen, mentor and fund a few choice ideas percolating within our organizations.

The good news is that companies large and small are ripe with entrepreneurial talent. Generation Y employees, and the younger millennials (born after 1980), were not raised like the generations that came before them. They were not told to keep their heads down, put one foot in front of the other and not to cause problems. They were raised to think independently and make a difference. Growing up with social media, millennials are accustomed to interaction, dialogue, opinion and debate about anything and everything, at work and at play.

Today, smart leaders drive innovation by making their workplace more appealing, stimulating and engaging. It’s no small change – you want to attract and retain the best of the best. But it’s all based on basic skills: listening, sharing, empowering and collaborating. Ready to get started? Have a positive attitude. Build a culture of belief. Blow up the barriers that divide the thinkers from the doers. Success will follow.

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Simple innovation can delight customers and save you money

Originally published as a special to The Globe and Mail, May 8, 2013.

innovation-can-delight-customers

I was recently standing on a corner in Washington DC and my Blackberry started to buzz. In came a text that read, “Cab 118 is on the way and is less than one mile away. Text WHERE to see where cab is.” How appropriate. How timely.

I had just delivered a keynote on innovation at the America Means Business conference to a roomful of new and aspiring entrepreneurs. And one of my key messages was “it’s not just the products and services that you sell, but how you deliver them that can be steeped in innovation and bring delight to your customers…and no, great customer-centric ideas don’t have to cost a lot of money!”

A seemingly mundane industry like cab service and Red Top Cab of Arlington, Virginia adopts a simple piece of technology that answers the age old question before it was even asked: “where’s my cab?” Simple, effective and certainly not cost prohibitive.

My point is that too many people think that innovation is limited to breakthrough products or services. It isn’t. In fact, process innovation – finding faster, cheaper and better ways to deliver your products and services to customers – can bring you a significant competitive advantage and substantial savings all while building brand equity, because there’s no better way to delight your customers than faster delivery of a better quality product.

Just look at Disney. They build delight into every process. When a child drops their ice cream on the ground at one of their theme parks, they turn that meltdown moment into one that delivers a happy memory. They replace the dropped treat with an upside down cone in a cup dressed up to look like a smiley face. Bad moment turned good.

Another example of innovative thinking closer to home happened when my 16-year-old son, Tommy, was still a toddler. We were shopping for groceries at Longo’s and he was having a fit in the fruit section trying to get at the grapes. One of the Longo’s staff saw me struggling and decided to cut some grapes up for him and put them into a little cup. Tommy was delighted and I was able to peacefully finish my shopping. Thank goodness Longo’s processes empower its people to go above and beyond. I never forgot it.

And the best news is that there are enormous hidden costs buried in status quo processes. Innovative thinking can be the key to uncovering and removing them. Done right, process innovation can even serve as a new source of financing.

It’s important to understand the difference between process innovation and the good old “slash and burn” method of boosting cash flow. In every organization, processes have a significant impact on costs: purchasing, inventories, reworking, downtime, lead-time, material travel time, delivery time, wasted time, and so on. All these processes add costs, which means they provide a wealth of opportunities for hefty savings. When you come up with new ways of improving throughput or order processing, or reducing wait-times and delivery times, it’s found money.

Let me be clear: I’m not suggesting that you should stop thoughtful, rigorous cost-cutting. But in tough times, urgent reactive cost-cutting is too often shortsighted and arbitrary, done to appease stakeholders, shareholders and short-term quarterly reports. Unfortunately the long-term consequences aren’t usually factored into the equation. It’s an accounting exercise – cut budgets, trim fat, do less or do it less well. Doing more with less is possible, but it usually comes from a strategic approach to process, not quick-fix cutbacks. Too often, companies cut their way into bigger problems as they deliver less service, reduce customer satisfaction, undermine brand value, lose market share, and sacrifice growth for the appearance of efficiency. These steps can lead in the wrong direction, and hurt the company. Of course, costs must be cut, but the real goal should be to lower costs while building customer loyalty, not disenfranchising them.

A classic example of short-sighted cost-cutting is the automated help lines many companies have adopted. Not only do they frustrate customers who would rather speak to a live person, but many companies plough their savings into outbound marketing call centres that become necessary to replace the infuriated customers they could have kept in the first place. Funny how a number of companies are back to advertising ‘live’ attendants as a competitive advantage.

The innovation challenge

It’s been well documented how American Airlines Fuel Smart program – “the employee-led effort to safely reduce fuel consumption by implementing viable suggestions from employees throughout the airline” – has saved the airline millions of dollars through such initiatives such as the single-engine taxi and use of tow tractors to move planes between terminals and maintenance hangars.

My challenge to you is to review your processes and uncover cost-saving opportunities that are hiding in broad daylight, waiting for a new approach. Realize the savings and then reinvest your newfound cash to create market-engaging breakthroughs in product and service innovations.

It’s a positive, growth-centric focus and is a far cry from myopically trying to cut your way to a better bottom-line. Process innovation can be, without a doubt, one of the easiest, least expensive and most productive ways of investing in your business’s future. Process innovation can also be easy and quick because it includes countless small opportunities seen every day that every company, big or small, can do right away.

Challenge your people to look at how your products and services are made, supported and brought to market. Empower them to share their intimate knowledge of the processes they use every day. After all, no one knows them better – their strengths, their weaknesses, their potential to transform.

Think very simple (for now). It worked for Red Top Cab and Disney and it can work for you, if you’re up for the challenge.

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The Innovation Challenge: Using Process Innovation to Help Fund Product Innovation

The recent round of negative economic news has many business leaders wondering if another recession is just around the corner. That could explain why a recent Gallup poll found that 30% of American workers are worried about their jobs – matching the paranoia level of mid-2009.

Wouldn’t it be easier if we could find a way to make budget without costly cutbacks and layoffs?

There is a way. Process innovation can enhance your company’s output, productivity and cash flow. But it’s important to understand the difference between cost-cutting and process innovation.

Cost-cutting is a simple accounting exercise – cut budgets, trim fat, do less – or do it less well. In tough times, cost-cutting can be ruthless and arbitrary; often, it’s done to appease stakeholders and the markets. Too often, companies “cut” their way into bigger problems as they lose marketing traction or reduce customer service and delivery satisfaction.

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