Why Do You Still Follow A Losing Strategy?
“Good
management is the art of making problems so interesting and their
solutions so constructive that everyone wants to get to work and deal
with them.” - Paul Hawken
Innovation is about playing to win, while cost containment is about playing not to lose. Ergo...when you play not to lose, you are not purposefully playing to win. Think about it...there is a huge difference in strategy.
As I have stated before, I have nothing against organizations who deploy effective Lean, Six Sigma or other similar process improvement and cost containment initiatives. Nor do I have any particular complaint with organizations that follow "best practices" to get caught up with the competition. Some organizations need to play follow the leader to get themselves back in the game. Some truly do have bloated and wasteful systems.
The one thing that I have a HUGE problem with however, is when the leadership of those organizations say that they are utilizing these programs as tools for growth, competitive advantage or other similar nonsense. Unfortunately, they get away with it in most organizations. By continually showing numbers that seem to trend in the right direction in the short term, they are given a free pass.
But is all a fallacy...and if you've been in business long enough, you'll see the "growth shell game" that continuous improvement initiatives play. In the short term, the focus on processes and cutting costs will drive some improvement in the bottom line. The trend line on the graphs will all head in the right direction. Following the "projected" trend line up into positive growth territory, these "value engineers" will promise a rosy future. Unfortunately, you can only squeeze so much out of wasteful or inefficient processes. Over time, hard dollar savings are replaced by soft dollar savings calculations in order to demonstrate continued benefits of the program long after the real value has been realized. In the end though, the trend line reaches a point where it goes flat...far short of the promised land of growth.
When this happens, the organization has nothing to fall back upon. No targeted growth strategy. No innovation pipeline filled with ideas. No processes to move ideas to market. No culture of vision, risk taking or learned failure. And so, they find themselves far behind the competition again. They need to follow best practices to catch up...and the cycle starts all over again.
Instead, what if that same organization spent as much time and effort on an innovation management program as they did on their operational excellence program? What if employees, while they were looking for wasteful processes to attack, were also allowed time to collaborate and experiment with new products/services/business models? What if fast failure was just as important as lean operations? What if risky exploration was as valued as controlling unwanted variance? What if each employee, each manager and each senior leader had one eye focused on operational excellence while the other eye was on the horizon?
Then, and only then, will the organization escape from the best practices loop and jump to the next practices leadership position. Then, and only then, will the organization truly be playing to win.
Innovation is about playing to win, while cost containment is about playing not to lose. Ergo...when you play not to lose, you are not purposefully playing to win. Think about it...there is a huge difference in strategy.
As I have stated before, I have nothing against organizations who deploy effective Lean, Six Sigma or other similar process improvement and cost containment initiatives. Nor do I have any particular complaint with organizations that follow "best practices" to get caught up with the competition. Some organizations need to play follow the leader to get themselves back in the game. Some truly do have bloated and wasteful systems.
The one thing that I have a HUGE problem with however, is when the leadership of those organizations say that they are utilizing these programs as tools for growth, competitive advantage or other similar nonsense. Unfortunately, they get away with it in most organizations. By continually showing numbers that seem to trend in the right direction in the short term, they are given a free pass.
But is all a fallacy...and if you've been in business long enough, you'll see the "growth shell game" that continuous improvement initiatives play. In the short term, the focus on processes and cutting costs will drive some improvement in the bottom line. The trend line on the graphs will all head in the right direction. Following the "projected" trend line up into positive growth territory, these "value engineers" will promise a rosy future. Unfortunately, you can only squeeze so much out of wasteful or inefficient processes. Over time, hard dollar savings are replaced by soft dollar savings calculations in order to demonstrate continued benefits of the program long after the real value has been realized. In the end though, the trend line reaches a point where it goes flat...far short of the promised land of growth.
When this happens, the organization has nothing to fall back upon. No targeted growth strategy. No innovation pipeline filled with ideas. No processes to move ideas to market. No culture of vision, risk taking or learned failure. And so, they find themselves far behind the competition again. They need to follow best practices to catch up...and the cycle starts all over again.
Instead, what if that same organization spent as much time and effort on an innovation management program as they did on their operational excellence program? What if employees, while they were looking for wasteful processes to attack, were also allowed time to collaborate and experiment with new products/services/business models? What if fast failure was just as important as lean operations? What if risky exploration was as valued as controlling unwanted variance? What if each employee, each manager and each senior leader had one eye focused on operational excellence while the other eye was on the horizon?
Then, and only then, will the organization escape from the best practices loop and jump to the next practices leadership position. Then, and only then, will the organization truly be playing to win.
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