Principle 8: Learning, innovation and continual improvement (Item 6)

Continual improvement and innovation depends on continual learning.

Why this is important

In order to implement new ideas, you should systematically overcome the barriers that prevent you from implementing your innovations (eg, existing stock, past investment, no time or budget).

It should be obvious by now that if you do not work to implement the innovation, it will not happen by magic or by good will. There are many reasons that companies do not take up new ideas. Here are a few of them.

The enemies of implementing innovations

It is natural to push back. We saw in Principle 2 (`Focus on Achieving Results') that is natural for people to push back when they think they are being pushed into something. New ideas are often presented as a challenge to the old. The holders of the old ideas will naturally push back. You might have the solution to world hunger, or a cure for cancer or heart disease, but the established order will naturally push to defeat you. The problem is not new. "It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle than to initiate a new order of things. For the reformer has enemies in all who profit by the old order, and only lukewarm defenders in all those who would profit by the new" Machiavelli: The Prince.

Existing stock and investment in the past. Every new product idea means that existing stock is made obsolete. There will always be considerable pressure to make every dollar possible from previous investment – either of money, time or effort. New ideas threaten to cut short the reaping of these rewards. Companies must plan development and release of products to make the most of these past investments. That process is usually well cared for. However, innovation is the enemy of carefully planned development and release programs, which are operating at the bottom levels of the triangle.

Consider just one path in the recorded sound industry. It began in 1877 when Edison invented the phonograph. It progressed from cylinders, to wind up gramophones, record players, tape recorders, cassette tape recorders, CD players and eventually arrived at today's DVD players. Each of those stages had its product development cycle – gradual improvements on existing products – miniaturization, new features, the planned obsolescence of this year's new model.

However, there are distinct jumps, when the thinking changed and the entire product range had to be scrapped. There is always pressure from the status quo to prevent that from happening. As we have seen in Principle 3 (`Customers'), everything about the company might be directed to delivering the old product to its customers: including customer and staff training; career development, strategies for takeovers up and down the supply chain, strategic alliances. All this alignment is at risk from the new thinking.

There are a thousand reasons not to take up the new thinking. However, you see what happens when you do not accept the new with open arms. As an example, think of the failure of the Swiss watch industry to see the potential in the electronic watch. They invented it and gave it away. It had so little in common with their old business that it was pushed away with ridicule. Consequently, the Swiss watch industry died, as did the phonograph makers and buggy whip makers before them.

If you do not have processes to counter the push back from the existing old thinking your new competitors that will grab it and you get creamed.

Budget. Where do people with good ideas go to get them funded in your company? Are you tied to budget processes that are based on ideas and proposals that are two years old? How is a new idea funded if you have already allocated your entire budget to admirable projects by your capital allocation process in your budget cycle? Do you say "If you have a new idea, put in for it in next year's budget"? Next year!? Too late!!

You should set aside seed funding to grow your new ideas.

If the idea is good enough and has enough potential, you should be flexible enough to interrupt the budget cycle. You should not do this lightly, because it sounds like instability. However, sometimes you are forced to be flexible by market forces.

Time. Who has got time to work on the new stuff? We have so much work to do just to do our daily job.

No outlet for unbounded creativity. What do you do when your creative technical people come up with a new idea way out in left field? Often when you get the creative juices really romping along, they find and develop products that just don't fit with what you do – at all. Solution? 3M use the new company solution. Provide the creative geniuses who made the invention with a new company. Pack skills around them (that they probably don't have) to make failure less certain (eg management, marketing, development, financing etc). Keep the ownership in place back to the parent. But break the main shackles with the old company – the old way of thinking. Such freedom has often turned out to be a significant incentive.

Control, habit, training and standards. As we described in the section on "Enemies of innovative ideas" we are driven by habit (the way we do things now and are comfortable with), training and standards and standard operating procedures. These and other controls not only stop new ideas emerging but they locked in the old ways and make change very difficult. Implementation must address changes to standards, training procedures and methods of enforcing them such as audit. As Carlopio has pointed out, we must apply systems thinking to the implementation and address all the issue that affect the innovation or that it affects.

Persuasion. The story about zippers (zip fasteners) is a good one – true or not. The story is that soon after the invention of the zipper, a bright young man thought it would be a good idea to replace the fly-buttons in men's trousers with a zipper. He made this suggestion to his boss – who saw not the potential but law suits resulting from caught anatomy. He rejected the idea. It was of course later taken up by a competitor. Possibly, a better presentation of the idea would have been to make up a pair of trousers with the zipper and let the boss use them. The convenience of the zipper would have made it the boss's idea.

Trouble free implementation needs good design

The trouble-free implementation of new products and services requires good design.

Design should include:

• merging external and internal customer requirements into the product or service
• taking advantage of the most recent stable technology
• designing production/delivery to provide the quality and operational performance requirements of external and internal customers
• following Carlopio's 5-step implementation process
• finding and addressing all the reasons the new approach will not work (Goldratt's Negative Branches)
• making time for an orderly change-over to the new procedures and supporting structures.

The amount of design needed will depend on the nature of the products and services; including whether the products and services are entirely new, variants, or require major or minor process changes. You must consider:

• health and safety (of employees and customers)
• long-term performance of the product and the company
• environmental impact of the product your waste stream and your raw materials
• unintended consequences
• how you will measure quality, performance to specification, meeting objectives
• process capability
• manufacturability
• marketability
• commercialization
• maintainability
• obsolescence
• supplier capability
• documentation
• cycle time
• delivery processes
• affect on existing products and services (for both production and sales)
• affect on all stakeholders in the value chain (including suppliers, strategic alliances, business partners, employees and the community)
• redesigning (`reengineering') existing processes

Coordination of design and production/delivery processes should involve all work units and individuals involved in production/delivery and whose cooperation and performance will affect the outcome. This might include groups such as research and development, manufacturing, production, distribution, marketing, customer service, sales, design and engineering.

Measure effectiveness of the innovation

You should measure the effectiveness of the new idea. You need to see if the new idea is successful. For example, measure to determine

• if the innovation is effective
• if it delivers the benefits promised
• if it provides value to the organization, its customers and other stakeholders
• if the costs are what were estimated