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A Crisis is a Terrible Thing to Waste (Max Mckeown The Truth About Innovation)

A Crisis is a Terrible Thing to Waste (Max Mckeown The Truth About Innovation)

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Published by Max Mckeown
The Truth About Innovation by Max Mckeown
The Truth About Innovation by Max Mckeown

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Categories:Business/Law
Published by: Max Mckeown on Feb 07, 2011
Copyright:Attribution Non-commercial

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02/07/2011

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A Crisis Is A Terrible Thing To Waste
Samsung preaches the gospel of perpetual crisis. That’s why forty percent of employees work in research and development looking for the nextbreakthrough. That’s why deadlines are never changed. It’s why design teamsvolunteer to live and work 24 hours a day in their Innovation Center. Theypursue perfection against the clock until they deliver. The result? Over 1600patents each year, the industry’s lowest costs, highest profits, and weeklyannouncements of the "world's first" or “world's best".
People need some reason to make tough choices. Organizations find it evenharder to make progress without knowing that it "has to", and will usually waituntil a real crisis comes along before getting on with the hard stuff that isessential to moving forward.A crisis is not the same as a disaster (although a disaster may prompt a crisis). It isas a ‘crucial or decisive point or situation’ or a ’turning point’. Such turning pointsforce a choice between inertia and innovation. When faced with a crisis ask: Howcan we use this crisis to inspire innovation?IKEA’s history is a sequence of such choices. Competition with other mail orderfirms led to its first showroom. Supplier boycotts led to it designing and buildingits own furniture. Transportation problems led to the flat pack concept. Ashowroom fire led to a much bigger showroom concept. Insufficient numbers of sales people at the showroom launch led to the self-service idea. It would havebeen easy to waste each crisis but instead they inspired innovation.Waiting for a real crisis to drive innovation may not allow enough time orresources for new ideas to save the company. By the time anyone recognizes areal crisis, it may be too late to do anything about it. Even if the companysurvives, the real crisis does not happen often enough to motivate continuousimprovement, progress, or growth.
 
You can look into the future.
What may endanger your company? Whatproducts could your competitors launch? What new laws may challenge theway your company does business? How will customer-needs develop?What do you have to better to thrive in the future?
 
 
You can look into the past.
What has threatened your company in theprevious years? What has killed other similar companies? What threatshave there been to your country? Or your
 
You can look at the present
. What events of the day encourage a sense of urgency? How will political victories or losses impact on your plans? Howdo new discoveries challenge your markets? What can you learn from thesuccesses and failures of others?Intel also believes in using crisis to drive innovation. Since computers don’t reallywear out, the only way to convince customers to buy a new one is to make ittwice as good. To achieve this Intel aims to double the speed of its computerchips every two years. They decided that the only way of innovating fast enoughis to use fear of future events to motivate urgent focus. It did this by encouragingwhat it calls a ‘culture of paranoia’. Everyone worried about real and imaginedthreats. Everyone practiced ‘constructive confrontation’ to express opinionsbluntly to subject proposals to aggressive, desk thumping, red-faced criticism. Allin the hope that it would force tough action before a real crisis wiped out thecompany.There are limitations to such a culture. Being paranoid may mean that you noticethreats but it does not mean you know what to do about them. Nor does it meanthat you can get the company to do what you think has to be done.Paranoid Intel has known for decades that its success in chips for personalcomputers was getting in the way of developing new chips for other gadgets. Ithas tried and failed many times to do anything about the impending crisis. Yellingis not the same as open discussion. Vitriol is not an effective replacement forreasoned argument. Is it likely that people with the most valuable opinions willalso be those with the loudest voices? Won’t managers be most likely to win?The strength of the Samsung approach to ‘crisis culture’ is that it builds in urgencyand focus at the start of the project. This is where it has the greatest impact. First,it seeks to avoid the main reasons innovations fail – because they are late orincomplete. Second, simplifying and improving the design at the start helps everystage of production. Third, it only demands paranoia from small groups over ashort period. This is crisis culture that is attempting to be effective, flexible, andsustainable.

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