Innovation and productivity.
Is your business logistics function innovative. Or are you just getting on with ‘continuous productivity improvements’? That is the problem with what you are achieving and the terminology used.
Next month there is a conference in Melbourne with the title Creative Innovation – an attention grabbing heading; but what is innovation? A dictionary definition is ” to make changes by introducing something new”. The definition of productivity is ‘the rate at which goods and services are produced in relation to the input of labour, time and money’.
So productivity is improving what you are doing and innovation is achieving something in a new way. Unfortunately, because innovation is a ‘sexy’ term it is often used in business (and the media) to cover anything being done.
As an example, the adoption of ‘free’ telecommunications (e.g. Skype, Facetime, Hangouts) and social media in your business is likely to be a productivity improvement rather than innovation. Innovation is the new uses of Internet technology by software developers.
If your supply chain thinking is not already innovative, then why should it become so? – it is because of change. The driver for change in the past has been external pressures on businesses and technology development; now we have the additional factors of climate change and future resource scarcity to drive our thinking and actions.
Implementing an innovation culture
Given these four factors, an approach to innovation is to accept that the future supply chain and logistics scenario for your business will be very hazy. It could be unwise to put all your efforts into a ‘new big thing’ that eventually does not work; better to have an abundance of ideas from your team; mistakes will still be made, but more (and earlier) attention from stakeholders will reduce the total cost.
To achieve this outcome requires two elements that have existed for many years; the first is MBWA – management by walking around. You will not get innovation through sitting in front of a computer screen; better to allocate 40 percent of your time to be with your team promoting innovative thinking. The second is letting your team know that being innovative means accepting that not all ideas will work.
The outcome you will strive for is: 1. the team’s manager is not expected to always have the right or best answer 2. managing is allocating resources effectively to get the job done and 3. control is what the team does, not their manager. This will take time to achieve and sometimes appear a bit chaotic, but hang in there.
In an article about the Australian division of a multi-national food business, it said that three years was the time to achieve an innovation culture – I think that is wishful thinking. It can take much less than three years to destroy the culture of a business (change the CEO), but longer to build an innovation culture that can successfully address future challenges.