Anticipate the book

Getting Lean. It’s Good for the Customer.

February 3, 2012 in Culture, Processes, Team Improvement

The term “lean” has been with us for years now. It was originally used to describe a particular type of manufacturing process that optimized production while mitigate the associated costs. It is good, basic common sense about how to get more with less. While it won proponents around the world, it did so primarily on the basis of how it affected company results. Money was saved; profits were thus encouraged.

What was left undiscussed in these years is the way in which this type of approach – not just to manufacturing, but to all areas of business – actually helps the customer. Obviously, the point is not to try to do more with less for customers by shutting down the call center a half hour earlier everyday because fewer customers call in that last half hour. Quite the opposite. It is about recognizing that additional resources are created through lean processes, and those resources can be devoted to improving the customer experience, either through new product development or even through keeping call center open another half hour later every day.

Thinking lean simply means thinking about optimal leverage, in all your processes, with the idea in mind that ultimately, you are in business to serve customers.

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Fighting the Good Fight of Differentiation

January 31, 2012 in Culture, Differentiation, Innovation, Product/Market Fit

Sometimes we are victim of our own success, and such has been the case, in one respect, with the modern company. We became so adept at producing – and mass producing – goods that we the trade-off between mass producing a version of an existing product became more appealing than inventing a new one. In the process, we gave ourselves a little heartburn, in the form of runaway price competition.

In some respects, of course, this is a positive development. More consumers have been able to afford more goods than ever before. On the negative side, though, the result has meant increasing pressure on profit margin growth for companies. Price competition inevitably reaches a point at which it no longer contributes to the ongoing health of the company.

Where companies have been able to successfully combat this trend, they have done so by getting off the price competition treadmill and on to a path toward innovative new product development. These companies, thus, have changed the conversation with consumers from “hey, I’ll give it to you for 10% less than the other guy will give it to you,” to one that sound much more like, “look at this great new product that will solve real-life problems for you and make your life better. I am the only one who can give it to you, and it’s going to cost you, but it’s worth it.”

Which conversation would you rather be having?

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Companies Change With the Right Focus on Innovation

January 27, 2012 in Culture, Innovation, Team Improvement

Procter & Gamble might not be the first name that comes to mind when thinking about a list of the Masters of Innovation. The company, more than 100 years old, makes products that most of us grew up with, and many of our parents grew up with. And many of those products hardly seem game-changing. Take Pampers for example. Or Crest. How about Tide? Good product, but hardly the iPhone.

With this in mind, when A.G. Lafley took over the helm as CEO in 2000, he saw that the way out of the struggles the company had at the time was through the portal of innovation. The process he took to do that is well documented in the book, The Game Changer, which was written with Ram Charan. A review of the book can be found in the April 14, 2008 issue of Businessweek, p. 73, “How P&G Pampers New Thinking.

As the article highlights, the distinctive feature of this book is the way in which it provides granular look at P&G’s process, elevating it above the typical philosophizing on the subject of innovation so popular in the press today.

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