Kaizen is Necessary But Not Sufficient

 

‘There are more things in Nature, Horatio, than are dreamt of in your philosophy.’ Hamlet

As a Toyota acolyte, I was focused on the factory. How could I not be? New factories & model launches, new processes & equipment, continuous problem solving in a splendid team environment. I experienced world-class management & leadership. A Toyota logo is forever emblazoned on my heart.

But I began to realize there were large gaps in my understanding. If TPS was enough, why were the Tech tigers so much more valuable than the great Industrials? And so, I went to Singapore seeking a sensei.

Finding the Blue Ocean

I found my Innovation sensei in Laurent Simon, my friend, co-author & East Asia Innovation leader. Under Laurent’s guidance I participated in Innovation sprints in a range of industries (Financial Services, Consumer Goods). We were trying to create something seemingly out of nothing – ‘Abracadabra’ Innovation. Twenty-five years after my Toyota apprenticeship began, I found myself on a new learning curve, one just as steep & just as exhilarating.

Kaizen entails making continuous incremental improvements to existing offerings & processes and can achieve seemingly magical outcomes not unlike those of compound interest. My Sprint colleagues & I were seeking the proverbial ‘Blue Ocean’, a place where nobody else was fishing – a very different challenge, though no less profound.

I Thought I Understood the Customer

At our great Toyota factory, we thought we understood our customer, and so we did – to a point. We understood the customer’s wide range of satisfiers & dissatisfiers. We set both process & outcome targets for critical items like water leaks, engine surges & stalls, squeaks & rattles and dozens more. We focused kaizen activity on hot spots, kept improving and repeatedly won the coveted JD Power Gold Plant Quality award (still a point of great pride).

But here’s the rub: Could my Toyota colleagues & I have imagined that the automobile would evolve into a ‘smartphone on wheels’ or a ‘living space’ designed for comfort & productivity?  Could we have imagined parallel developments like the Smartphone or AI?

Kaizen is necessary but not sufficient. Abracadabra Innovation entails creating something new & useful seemingly out of nothing. We were often in the dark regarding core innovation questions like:

1.     Who is the customer?

2.     What do they value?

3.     Why do they buy or not buy?

We had to create our own data by running quick, cheap experiments. We had to learn our way up the proverbial innovation curve.

Abracadabra Innovation is a Process

What have I learned about innovation?

It’s a process through which you gradually engage a prospective customer.  Process steps typically comprise some version of:

·       I Know, I Like, I Trust; I’ll Try, I’ll Buy, I’ll Buy Again, and if you’re lucky,

·       This is great, I told all my friends!

This so-called ‘customer funnel’ has three phases:

·       Awareness – (Who are these jokers?),

·       Bridge – (Hmm, I should check them out), and

·       Clubhouse – (I’m a fan)

The innovator’s job is to pull people from Left to Right, and into the Clubhouse. Like any process, this one has bottlenecks. As Eli Goldratt taught us decades ago in ‘The Goal,’ our job is to 1) Identify the bottleneck(s), 2) Understand the blockers underlying each bottleneck, 3) Remove the bottlenecks, and 4) Keep going till everything flows.

To create ‘flow’ we have to a) develop hypotheses around the core innovation questions, b) run quick, cheap experiments, c) thereby generate sound data, and d) continually adjust our offering based on what we’ve learned, without going broke.  

Experimentation has a bright future! More to come.

Best wishes,

Pascal Dennis         E: pascal.dennis@leansystems.org