INNOVATION

2. INNOVATION Innovation is the ability to see change as opportunity – not threat Henry Ford

3. INNOVATION Ted Levitt Legendary Marketer; Professor; and Editor, HBR

4. INNOVATION “Never before in history has innovation offered promise of so much to so many in so short a time” Bill Gates

5. INNOVATION “If you aren’t failing every once in a while, it’s a sign you aren’t doing anything very innovative!” - Albert

6. INNOVATION “If you aren’t failing every once in a while, Do YOU have the “Right to be Wrong” (R2BW)? it’s a sign you aren’t doing anything very innovative!” Without R2BW, how can you have the ‘right 2B RIGHT’?? - Calder - Albert

7. MLCP: The Business of Tomorrow Explain the need for innovation on the shop floor; Describe the innovation processes that bring about positive change; and: Evaluate management tools and techniques that foster innovation. MODULE 4: MANAGING INNOVATION ON THE SHOP FLOOR On successful completion of this module, participants will be able to:

8. MLCP: The Business of Tomorrow MODULE 4: MANAGING INNOVATION ON THE SHOP FLOOR We are constantly hearing through the media these days about the decline in number of manufacturing jobs in North America. Manufacturers today are under greater pressure than ever before to improve their competitiveness. This becomes an increasingly difficult challenge as globalization intensifies, and off-shoring becomes ever more prevalent.

9. MLCP: The Business of Tomorrow MODULE 4: MANAGING INNOVATION ON THE SHOP FLOOR At the same time, we hear about the organizations that are successful, and how they attribute so much of their success to innovative approaches. These approaches range from product design innovations, improvements in manufacturing processes and services, to innovative merger and acquisition strategies. Companies where an innovative culture has been fostered look for innovations in all areas and aspects of their business.

10. MLCP: The Business of Tomorrow MODULE 4: MANAGING INNOVATION ON THE SHOP FLOOR Today, Continuous Improvement is essential in every manufacturing, repair service, and processing operation. Competition keeps getting tougher; quality targets are harder to meet; cost reduction is ever higher in priority; and technology keeps advancing. All of this in turn triggers further change. Successful companies rely more and more on their people to develop competitive edge through innovation. The key is to understand the basics of how innovation happens, and how the process can best be managed.

11. MANAGING INNOVATION - THE MODEL (the goal) is at the core of the model INNOVATION INNOVATION DEFINED: PEOPLE implementing NEW IDEAS to create NEW VALUE Managing shop floorinnovation has many key components: We’ll first build a model to identify the components, and then examine each in greater depth. A simple definition: INNOVATION ON THE SHOP FLOOR: A long-term activity with many interrelated facets

12. MANAGING INNOVATION - THE MODEL This involves selecting key areas for innovation It consists of formulating ‘Strategic Focus’ Having focused goals is a key enabler for determining ‘New Value’. The first of the major components: FOCUSED GOALS:

13. MANAGING INNOVATION - THE MODEL The ‘New Value’ component is where specific, quantifiable targets are set for shop floor improvements. These targets are aligned with the organization’s goals and objectives. Later in this module, we’ll explore a number of areas to investigate as enablers for New Value opportunities NEW VALUE:

14. MANAGING INNOVATION - THE MODEL Ideas are the very feedstock for the innovation process. New ideas may stem from any number of possible sources. Ideas may be inspired by individuals; may be the result of synergy amongst work team members; or may come from elsewhere within, or beyond company boundaries. NEW IDEAS:

15. MANAGING INNOVATION - THE MODEL This refers to the collective knowledge resource available to all involved in any given innovation. Shop floor knowledge is essential not only for innovation, but also for basic plant operation. The collective knowledge base is a resource that needs to be managed (Knowledge Management). KNOWLEDGE:

16. MANAGING INNOVATION - THE MODEL Learning is fundamental to supporting knowledge management and the flow of new ideas. A company with a good learning culture is what we popularly term a ‘Learning Organization’ Establishing a Learning Organization is key to supporting ongoing innovation. LEARNING:

17. MANAGING INNOVATION - THE MODEL This is the most important of the component resources. Appropriate leadership and management in this area are essential to promoting innovation. People respond well to challenge - that’s especially true if it allows for creativity and contributes to new innovation. PEOPLE:

18. MANAGING INNOVATION - THE MODEL A company with a good record for innovation invariably has a culture that supports innovation. It can take years for such a culture to develop. There needs to be commitment at all levels to foster this climate. CULTURE:

19. MANAGING INNOVATION - THE MODEL This is the critical process of turning ideas into Value. Having the right skills, knowledge and tools to implement new ideas into existing processes or work systems is of great importance. This needs to be done in such a way that the desired results are not just obtained but also retained. IMPLEMENTATION:

20. MANAGING INNOVATION - THE MODEL INTERRELATIONSHIP BETWEEN COMPONENTS: The matrix shows how no one component is independent of the others. Each has some degree of interrelationship with, and effect on, any one or combination of the others. A delicate force field establish, balance and maintain.

21. ESTABLISHING STRATEGIC, FOCUSED, SHARED GOALS. ALIGNMENT OF GOALS It’s important that the goals of the organization be in good alignment with its vision and mission. VISION A ‘hierarchy’ of goals and objectives should pervade the organization so that effort is aligned toward corporate goal attainment. MISSION GOALS

22. ESTABLISHING STRATEGIC, FOCUSED, SHARED GOALS. OVERALL ‘FIT’ Look at the ‘big picture’ to verify fit of goals with other departments and disciplines. RELATIVE IMPACT: Understand the cost/performance relationships between goals. Be on the lookout for possible ‘weak links’.

23. ESTABLISHING STRATEGIC, FOCUSED, SHARED GOALS. COMMUNICATING GOALS: Err on the safe side! Communicate goals far and wide! Sometimes innovative solutions come from people in other areas.

24. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Typically, attractive ‘New Value’ opportunities in manufacturing will take any of the following forms:

25. Through new technologies? By using new sensors? Using new control strategies? Via new operating practices? Other? NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Quality Improvements (Quite often, new solutions are only limited by our imaginations)

26. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Feedstock Yield Improvements: Getting more prime product per unit of input material is always an objective in manufacturing. Productivity Improvements: Producing more prime product per unit of time is always an ongoing objective, even in cases where your market may be restricted. “New value flows from breaking out of estab- lished patterns so as to look at things in different ways” - Edward de Bono

27. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Product Diversifications: - Extend the existing product range? - Other uses for existing products? Cost Reductions: Every dollar of expense or loss that can be trimmed reports directly to the bottom line!

28. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Safety Improvements: Employee safety must always be a #1 goal in any business. Safety improvements can be taken on as stand-alone items, but should always be factored into all other ‘New Value’ solutions.

29. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Product Environmental Footprint: Accountability for the size of industry’s environmental footprint is inevitable. Manufacturing sustainability will be critically influenced by this impact. This offers fertile new opportunities for shop floor innovation

30. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES Responsiveness to the Customer: An aspect not often considered at the shop floor level, and one where ‘New Value’ opportunities can abound. - Consider interfacing of shop floor people with customers on problems.

31. NEW VALUE: LOOKING FOR SPECIFIC OPPORTUNITIES KEY ENABLERS FOR NEW VALUE

32. NEW IDEAS - ENCOURAGING IDEA FLOW FROM ALL POINTS Ideas: the feedstock for Innovation “The way to get good ideas is to get LOTS of them” - Linus Pauling

33. Adapted from ‘Fast Forward’ By Michael LeBoeuf NEW IDEAS - ENCOURAGING IDEAS FLOW FROM ALL POINTS The ‘Creative Ideation’ Cycle

34. NEW IDEAS - ENCOURAGING IDEAS FLOW FROM ALL POINTS ‘Creativity’ & ‘Innovation’: Not the same! ‘Creativity’ means coming up with great new ideas: - It’s imaginative, exciting, and fun. ‘Innovation’ on the other hand means turning the ideas into REALITIES! - That’s hard work. Being innovators takes a lot of both!

35. THE KNOWLEDGE BASE, AND MANAGING IT Shop floor knowledge is essential not only for innovation, but also for basic successful operation of the plant. Here are some questions well worth contemplating: - What is the total knowledge base for your area? - Who responsible for it? - How measure, quantify, qualify it? - Who manages the knowledge base?

36. THE KNOWLEDGE BASE, AND MANAGING IT Knowledge: Two Basic Forms: ‘EXPLICIT’: - Computer files - Paper-based files and records - Books - Manuals - (Other formats) ‘IMPLICIT’: - Exists only in heads - Leaves the property at the end of each work-day - Will it always come back next morning??

37. THE KNOWLEDGE BASE, AND MANAGING IT More and more, manufacturing employees are becoming knowledge workers. As such, it is of ever greater importance to identify and manage the knowledge base as a strategic resource. Knowledge of all aspects of the operation is equally as important as the plant’s physical assets: Knowledge manage- ment programs and processes are now a high priority need.

38. Strong corporate commitment to, and investment in learning An environment that accepts mistakes as part of the learning cycle LEARNING AND LEARNING ORGANIZATIONS ‘LEARNING’: AN EXPLANATION LEARNING ORGANIZATIONS:

39. LEARNING AND LEARNING ORGANIZATIONS Prerequisite for an Innovative Culture: A prerequisite to creating and sustaining an innovative culture on the shop floor is establishing a ‘learning culture’. Knowledge management isn’t just about capturing the knowledge within its ranks: It’s about capturing the correct knowledge and skills that will grow the organization during future paradigm shifts. We often hear that ‘technology drives the economy’ - but what drives technology?? - Knowledge, through learning!

40. Four levels of learning & achievement KNOWLEDGE MANAGEMENT RESULTS LEARNING AND LEARNING ORGANIZATIONS KNOWLEDGE-DRIVEN ORGANIZATIONS: (Sustained growth & Value creation)

41. Purchase same raw materials Use same equipment makes Produce same product types Engage same consultants PEOPLE Different companies can: But what makes them unique is their PEOPLE

42. Hire the best people available! Hire with Innovation in mind! Give them reason to stay! Provide challenge Reward innovation Recognize success PEOPLE RECRUITMENT & RETENTION

43. PEOPLE TWO IMMUTABLE LAWS: 1. The Law of ATTENTION: The things that get looked at GET DONE; 2. The Law of REWARD: The things that get rewarded GET REPEATED!

44. THE CULTURE

45. ISBN 4-7700-2476-2 Kodansha America Inc New York, New York The 3M Innovation Wheel

46. per Ernest Gundling Types of Innovation: 1. New Market or Industry 2. Changing the Basis of Competition 3. Line Extension 2. Changing the Basis of Competition The 3M Innovation Wheel

47. per Ernest Gundling Openings to Innovation The 5 Openings: The 3M Innovation Wheel

48. per Ernest Gundling Levels of Innovation The 5 Levels The 3M Innovation Wheel

49. per Ernest Gundling The Role of the ‘Inventorpreneur’ The 3M Innovation Wheel

50. per Ernest Gundling Technical Innovation The 3M Innovation Wheel