Truly innovative New Product Development (NPD) is not a fad or a Six Sigma-like trend; it’s risky, messy and a bit unpredictable, and it doesn’t necessarily follow a straight line
by Mike Rainone, co-founder, PCDworks
 At the end of the day, those companies that master true innovation are the ones that will lead this country out of the mess that are in. We can’t manufacture our way out of this mess, but we can invent our way out. |
I have been thinking a lot lately about the multitude of trends that have hit the world of business over the last few decades.
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I remember, as do, no doubt, many of you; Management By Objectives, Theory Y, Theory of Constraints, TQM, and Quality Function Deployment. We were in awe of the Deming method, and just learning about the wonders of JIT, Toyota and Lean.
Then along came Six Sigma. It started small like all such “social movements in business.” No one could anticipate the impact, or the unintended consequences of Jack Welch’s wholesale embrace of Six Sigma, not only on GE, but on every aspect of American business.
But as I wrote in my last column, beware the unintended consequences of a social action, because one will almost inevitably bite you on the rump.
Lest you accuse me of being a Neanderthal, I want to say that I fully embrace the notion of continuous improvement, Poka Yoke and the underlying concepts of Kaizen. Just about anything that improves the quality of the goods and services that we produce, was, and is, dearly needed, especially as globalization promises to become the final nail in the coffin of American manufacturing. One can only wonder if the crisis in Detroit could have been avoided had the yutzes who run those companies really embraced “quality” back in the ‘80’s instead of turning it into a PR buzzword.
Remember “Quality is Job One!”? I can recall a candid conversation with a young, untainted GM engineer who, when asked about “Japanese” management, told me everyone there was a “true believer” in the GM way of thinking, that such heretical conversation was absolutely taboo, and the surest way to excommunication. This is just one of the reasons I am troubled by the current bailout requests from Detroit. How different might things have been if instead of opposing the increases of the CAFE mileage standards, the Big Dumb 3 had embraced them and produced lines of quality built, energy efficient cars? I know, I know, you’re thinking “fat chance”, but it’s a nice fantasy.
Back to reality, enter Six Sigma. We can probably all agree that GE really set the standard of adoption of the Six Sigma model. It succeeded, no doubt, due to the fact that GE’s top management, specifically Jack Welch, ordered it, adopted it and stuck with it through its entire adoption cycle. Welch deserves credit for understanding that only with his direct, day-to-day embrace of the Six Sigma program would it be promulgated from top to bottom in that organization.
He clearly understood that without the champion of the big boss, Six Sigma would have been adopted in a spotty way that would have most likely died out when he departed the scene. He knew that almost all organizational changes fail because of the lack of absolute, dictatorial support from on high, and he understood the Machiavellian dictate: Change will be fought by all who stand to lose, and half that stand to gain, because of fear of change.
In fact, Welch was so successful at implementing Six Sigma that it has become the formula for success for most big business, or at least that is the common belief. Jack’s acolytes were so good at preaching the gospel of Six Sigma that it has become the de rigor strategy for corporate growth to hire a Jack clone to run the business. Bob Nardelli went to Home Depot and is now at Chrysler; John Trani went to Stanley Works, James McNerney went to 3M, and then a year later to Boeing.
They were at the top, but throughout the land even more GE grads were given top billing, with the expectation that only their kind of discipline could rescue a company, or branch, or division from the clutches of chaos and disaster. It was going to take Six Sigma to standardize our processes, like Metamucil; make us regular, make us predictable, pacified and of course, profitable.
So, without trying I can count on both hands and feet the number of former GE’ers who flopped miserably at managing, and failed to bring about the joyous resurrection they had been anointed for, at ALL levels of organization.
My focus in corporate America has been through the lens of new product development and no place does the failure of Six Sigma shine greater than in NPD.
The aim for Six Sigma is continuous improvement, not leaps. But making us incrementally better, is not the recipe for creating better and more innovative new products. Though the rigorous discipline and metrics of Six Sigma, one can make orderly improvement in products, but no one should count incremental improvement as the true innovation that is at the core of NPD. True innovation changes the paradigm for the market. A new technology applied to an old problem, a solution that makes other NPD engineers smack themselves in the head with a “Why didn’t I think of that”- that is real innovation.
Six Sigma reinforced by “bean counter” mentality dictates that incrementally better NPD requires going after low hanging fruit, but we all know that low hanging fruit has been picked over, and has likely been rotting on the ground. This is not a strategy for success, it is an excuse for corporate laziness - an aversion to risk that causes us to take the easy road.
Low hanging fruit is like the notion of organic corporate growth. Wait for a start up to demonstrate value by creating the innovative new products that big companies can’t develop, then buy it up on the promise of current and future innovation. I challenge you to think of any successful integration of a start up into a big organization, and by successful I mean that the division retains its spirit, its innovation, and its drive to create. The reason this strategy fails is simple: The inventive ones leave. Most great creators cannot stand the stifling corporate environment that the swallowed up entity becomes. Those who stay are not the ones the company needs to create the brilliant new products; they are the ones who are afraid of risk.
To be successful at real NPD, it takes an agile, flexible, well coordinated corporate structure. It requires an absolutely dedicated and, above all, patient management team that is not averse to risk to pull off real innovation over the long haul. Unfortunately, doing so on a long term, reliable basis in this era of quarterly reporting and continuous profit improvement is almost impossible. It can be done, but it takes more than continuous, incremental improvement. At the end of the day, those companies that master true innovation are the ones that will lead this country out of the mess that are in. We can’t manufacture our way out of this mess, but we can invent our way out.
Truly innovative NPD is not a fad or a Six Sigma-like trend. It’s risky, messy and a bit unpredictable, and it doesn’t necessarily follow a straight line. Long after Six Sigma becomes an adopted standard and we don’t call it Six Sigma anymore — and the consultants are out selling another trend — we will still have to deal with messy new product development, without checklists, without formulae, without metrics.
As a new product engineer, you might want to be thankful for that over this holiday season.
Written with a tip of the hat to Eric Hoffer’s The True Believer. Mike Rainone, the co-founder of PCDworks, a technology development firm specializing in breakthrough product innovation. You can contact him via mrain1@pcdworks.com or by visiting www.pcdworks.com. Make sure to read Mike’s Final Thought in every issue of Product Design & Development.