"If you were making LP records then it did not matter how much time you spent in quality improvement programs because CDs were going to wipe you out." - Paul Sloane

I've been thinking a lot about a fantastic blog article recently written by Paul Sloane called "Innovation and Quality - Allies or Enemies?" and how quality (think cost cutting) initiatives and innovation really do rely upon each other.  And while both are important aspects of running a thriving business, they definitely need to be managed separately to be effective.  The quote above came from his article and speaks volumes about the need to avoid standing still for too long.

But it also made me think about how you can, through effective strategy, visioning, horizon scanning or direct challenges to your employees, make your "now" obsolete before your competition does.  Huh?  Let me explain...

I have worked with a few organizations that were the absolute leaders in their industry.  One was an undisputed number one with little to no competition.  But they brought me in to help them find ways to stay number one.  Truth be told, there was some competition.  But they were so little, the common attitude of many senior executives and line management was that these "little gnats" couldn't possibly be a threat. 

And yet, the numbers didn't lie.  It started three years before.  A tiny loss of market share.  Then, the year after that, a little more market share.  Still not enough to hurt, but worth watching.  Again, the next year...last year...the market share had eroded even further.  This time, it caught the attention of the Board and CEO.  While the company maintained its rock-solid leadership position and everyone was basking in the sunlight, they lost 5% market share over a three year span to a tiny "nobody" of a company.  A 5% share of a billion dollar market.  Do the math...that's $50 million in lost market share.

Also, the organization had failed to capture the market's attention with any really new offerings.  A few line extensions, but nothing with any kind of "WOW" factor.  So what did we do to turn the tide?  Addition through subtraction.

After a rigorous review of their product development management processes and innovation culture, we determined that best way to shake this giant out of its funk was to force some change.  We did this via a number of attack fronts:

1. The CEO, with full, written support from the Board, led the initiative, attended the strategy meetings, personally communicated status and sat in on line level meetings about the need to bring innovative new products to market
2. We secured resources...human, financial, time and space
3. We established an Innovation Center of Excellence to organize and deliver consistent training, strategy, processes and communication on innovation
4. We invited every employee to play a part in the new initiative, either in their day-to-day jobs or as a part of a new idea development team

This, however, only gave us the foundation we needed to start the real transformation.  The most important next step was that we forced each and every division vice-president and key directors to develop an execution plan to decommission or sunset one product within one year and replace/upgrade it with something new.  This jolted the status quo.  Something HAD to go.  Something new HAD to be developed.  Addition through subtraction.  And the CEO promised that this was not going to be a one-time exercise.  This was expected to happen each and every year.  Measurements and metrics were established to track progress.  Performance goals were set to ensure compliance.

It worked...and through the capture of additional metrics, it was tweaked to be even more effective over time.  That 5% loss of market share was not only recovered, the organization began to add share in new markets and within new demographics.  It wasn't easy.  Change can be very difficult to master, especially in larger organizations.  It can be tempting to take the easy way.  I can be hard to fight the anti-bodies that resist change.  But in this case, the CEO gave not only a clear vision of the future, but more importantly, provided a vivid roadmap of how they were going to get there.

So...what can you subtract...so you can add?