Let’s consider for a moment the corporate journey to improve innovation that has taken place, and where we are now.
Productivity improvement was driven into logistics in the ’70s and ’80s, into manufacturing and operations in the ’80s and ’90s, and into the supply chain in the ’90s and ’00s. As a result of those efforts, companies that create and commercialize products achieved the lion’s share of their improvement entitlements in the “downstream half” of the company.
Improvements in R&D and product development, beginning in the ’80s and extending to the ’00s, similarly focused on productivity via improved execution by striving for faster time-to-market and speeding-up product life cycles. By the early ’00s, companies could foresee that the opportunity for big improvements was also nearly exhausted. The only place to look for the next big opportunities was further upstream in the company.
In the early 2000s, companies began focusing on pushing the best possible portfolio of products through their fairly well optimized development and operations pipelines. The quest for higher-value, more-innovative portfolios began.
But alas, one commonality among the past three decades of improvement initiatives was that they primarily focused on improving the bottom line. Profit is no small thing, granted, but 30 years of corporate focus on the bottom line left many companies challenged to attack top-line initiatives with the same vigor and expertise.
The Journey to Mastering Innovation [Machine Design – November 2015] makes the case that the next great source of competitive advantage will accrue to those companies that master the ability to innovate, not innovation=execution but rather innovation=creation.