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Michael Balle

Michael Ballé: An Innovative Way of Looking At Innovation

By Michael Balle, co-author of The Gold Mine and The Lean Manager - Last updated: mardi, mai 25, 2010 - Save & Share - Leave a comment

Peter Drucker once said: “since the purpose of business is to generate customers, only two functions do this: marketing and innovation.” This doesn’t seem to leave much place for lean, since lean starts with operational effectiveness – in effect the ‘industrial smile” with engineering at one end, sales & marketing at the other and production down in the middle (all problems, no glory). Nonetheless, the lean approach extends way beyond manufacturing and into engineering and contributes in specific and unique ways to innovation.

Innovation is a vast word, and we can take it to mean three different things. First is the tech innovation – the killer app – coming up with something new on the market that does for customers what no other product or service did for them before. It’s pretty rare, and usually comes bootstrapped by technological evolutions and research. Second is the product range innovation: each new product replaces the preceding one, and has new features that should enhance the customer’s experience with it. This is a different kind of innovation – less breakthrough, but more of the bread-and-butter of what firms do. Finally there’s the process and organizational kind of innovation – inventing new ways of delivering products and services with increased effectiveness. This is the kind of innovation lean will be the most associated with as it explicitly aims at creating a new kind of business framework: the “lean enterprise”.

Working with engineering departments, we find that the lean approach helps to develop all three kinds of innovation – not just process improvement. Lean principles help firms solve some deep problems in engineering as well fostering day-to-day innovation on the shop floor through daily kaizen. Specifically, 1) takt time can be applied to innovation, 2) innovative solutions can be better integrated into new product design through set-based concurrent engineering 3) lea supplier inegration in the global value-steam will lead to better use of supplier’s innovation capabilities in our products, and 4) lean process innovation can be used to streamline the development process and move closer to the goal of no late engineering changes after start of production.

Engineering departments perennially suffer from stop-and-go: too much work, too little work, too much work, etc. Also, customer development work tends to absorb all the available capacity, so for many companies real product innovation is a struggle. The “takt time” concept is as powerful in engineering as in manufacturing. The key question to ask is: “what is the takt time of innovation in this industry?” what is the rhythm at which firms must deliver innovations to keep customers interested and competitors at bay. Clearly, if you’re in the tea bag business, innovation takt will be much longer than if you’re offering broadband services. The idea is to plan for a “takt” – we don’t know beforehand what the innovation will be, but we commit to having something innovative on the market at this rhythm – which opens the way to much better capacity planning in engineering (the same goes for product renewal).

Innovation is often hard to integrate in new developments because, well, it’s new – and no one knows exactly how to make it work. In this, the lean practice of set-based concurrent engineering is extremely helpful. Before jumping to the drawing board, the idea is to identify critical issues where industrial knowledge is just too flimsy and where things will typically fall over at production. Once these areas are identified, cross-functional teams are asked to solve the problem before actually designing the product – and to produce a wide range of solutions which will be progressively pared down as various cross-functional constraints are taken on board. This form of engineering is unique to lean, and critically important to bring innovation to the market place. The challenge is not to produce one working prototype, but to have a product that can be built right for every customer every time.

Lean thinking’s perspective on value-streams also paves the way to a far greater integration of suppliers in innovative activities. Lean thinking in development focuses on defining interfaces before fully drawing parts, focusing on compability upfront. This and a constant focus on solving problems makes it safer to use supplier’s experience and input in the development process.

Finally, lean is of course a key source of process innovation. The endless dynamic of standardized work, kaizen and kaikaku creates new process forms through the evolutionary pressure of every day kaizen.

Innovation in lean is no ivory tower moment of genius – it’s far more workmanlike. Lean’s innovation vision would be closer to Edison’s development of the lightbulb, and “not failing, just finding 10,000 ways that won’t work.” As with other aspects of the lean enterprise, Toyota has pioneered a different approach to innovation which has spawned both the Prius and humaniform robots. It’s an approach deeply rooted in kaizen and teamwork, which is a far cry from the lone genius inventor and the myth of the “aha!” moment.

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