See how formalizing innovation can create a whole other paradign for your manufacturing outfit
By Evan Pattak, Contributing Writer
The executives of Wilton Armetale Company, the venerable Lancaster County manufacturer of serveware, have gathered around the table for the meeting. Joining them by Internet are staff from the company’s Rochester, N.Y., office and one of the firm’s owners, Steve Wilton, from his home in Boulder, Colo.
It may seem like a typical staff meeting, one that will be replicated throughout the manufacturing sector on any given day, but this one is different. It’s called “Skunk Works,” a no- holds-barred, let-the-ideasflow free-for-all in which company personnel are encouraged to question all assumptions and brainstorm off-the-wall product and distribution concepts.
“People get excited about ideas,” says Ken Lefever, President and CEO of Wilton Armetale. “One of our rules is: No idea is a bad idea. We don’t laugh at it. Skunk Works determines if we’ll move forward.”
Skunk Works is Wilton Armetale’s answer to the challenge of innovation, which some observers project as the next great wave in manufacturing, one that is absolutely essential if America’s manufacturers are to thrive in the new global marketplace. For a variety of reasons, though, the sector has been reluctant to address innovation head on, even though developing new products and markets may be the surest route to continuing prosperity. Robert Tucker, President of the consulting firm The Innovation Resource and author of Winning the Innovation Game and Driving Growth Through Innovation, suggests that the modest economic upturn of early 2006 may have led manufacturers down a dangerous garden path.
“I see a creeping complacency because times are a bit better now,” Tucker says. “Companies may take their eye off the ball. They’re not hell-bent on innovation. It’s not a fun thing for them. Many companies haven’t completely grasped that we’re in this new era where ideas matter. They think approaching innovation on a catch-as-catchcan basis will put them ahead. But the winners will be those who are innovating.”
Other manufacturers, like stubborn generals, may be fighting the last war, the Great Cost-Cutting Campaign. Says Ron Mascitelli, author of Building a Project- Driven Enterprise and President of the consulting group, Technology Perspectives:
“There’s so much pressure now on the cost side that most small or mid-sized manufacturers have a tendency to be pretty much cost-focused. It seems like you can’t do both, contain costs and innovate. They say, ‘We’re just trying to avoid China eating our lunch.’ They’re not willing to saddle up the risk of designing new products. But it’s a false reality. You’ve already given up the game when you try to slug it out on cost.”
Petra Mitchell, Vice President of Operations for Catalyst Connection, the state’s Industrial Resource Center in southwestern Pennsylvania, observes that even manufacturers in the Commonwealth that are innovating may be doing so more tentatively than the situation demands.
“The bulk of their new product development efforts are minor modifications, enhancements, maybe a new addition to a product family,” Mitchell says. “Very few are doing substantial or breakthrough developments. There’s nothing wrong with incremental improvements. But we think there’s an opportunity to expand and do something a little more significant. There isn’t a sense of urgency around this. I think there should be.”
If Pennsylvania manufacturers haven’t embraced innovation, it may be because they’re laboring under the popular misconception that innovation is pure serendipity, a series of fortuitous “Aha” moments that can’t be scripted or scheduled. Innovation,Tucker insists, requires – and follows – a plan.
“We have a process for everything else,” Tucker says. “We have an accounting process, a training process, a process for oiling the machines. But we don’t have a process for this thing called innovation.
“Each company needs to create that process. Spend a little time designing it. Borrow from other companies. Study what it is and what it isn’t. Take a half-day or day, grab a pad of paper and get completely away from your computer, your staff, your cell phone, your BlackBerry, and think about three things:
1) What are the milestones of innovation of your company, the breakthroughs that put some top-line revenue growth in the company, and how did those ideas come to be?
2) What’s in your pipeline right now, whether it’s new products or new markets?
3) Where do youwant to take this company vis-à-vis products, processes and strategies? “When you have your answers, you have the basis for a blueprint. Write it out. Treat it like the Declaration of Independence. Otherwise, there’s too much room for wiggle- waggle.”
“When you have your answers, you have the basis for a blueprint. Write it out. Treat it like the Declaration of Independence. Otherwise, there’s too much room for wiggle- waggle.”
blue rather than formalizing a development process, now’s the time to create and implement your Declaration of Innovation – call it a “Declaration of Innovation.” Here’s some advice from the experts on getting it done.
BEGIN WITH YOUR CURRENT PRODUCTS
To be sure, a mature innovation process may take you far beyond your existing lineup. But there’s no reason not to begin with what you already have. A tweak here, a modification there, and you may have a wrinkle that can enhance the satisfaction of current customers and get you in front of new prospects.
“People think innovation is the breakthrough product, the iPod, the Walkman. In reality, that’s a tiny fraction of the innovation landscape,” Mascitelli says. “The vast majority of innovative products are evolutionary improvements with significant differentiation. You can differentiate without thinking in terms of big breakthroughs and high risk.”
If you bring your customers into the equation and regularly sound them out on their needs and problems, you may find that even slight product modifications can mean a decisive market edge. Says Mascitelli:
new products are those that can offer great differentiation, improved service, more customization, greater ergonomics or ease of use, maintainability or cost of operation. Another might be offering a suite of products that solves a customer’s problem as a collection. Innovation is about getting the highest possible price by bringing the highest possible value to market.”
MEASURE YOUR RESULTS
The outcomes of your innovation focus may seem difficult to capture, but once you’ve developed a discrete process, you can measure innovation as you would any other initiative. One way, for example, is to assess the time that passes from raw idea to implementation, pipeline time, if you will. If it’s too long, you know your process needs work.
You also can establish a goal for revenue that derives from new products or new markets – and offer suitable incentives for goal achievement.
“That’s an old 3M metric, but it’s got legs,” Tucker says. “A lot of manufacturing companies use that one.”
TO THINK OUTSIDE THE BOX, GO OUTSIDE THE BOX
Innovation means challenging baseline assumptions, questioning everything. The more diligent your employees, the tougher these tasks can be for them. After all, you’ve succeeded because of certain assumptions about production and the marketplace, and experience has proved you right until now. Ask employees to question all that and you may be looking at rows of puzzled faces.
So go outside the box to think outside the box. Bring in a facilitator to jump-start your innovation process.
“The key element is questioning assumptions – that’s critically important,” Mascitelli says. “Outsiders avoid the ‘groupthink’ phenomenon. An outsider can shine a bright light on the preconceptions and really help you be more open.”
When Catalyst Connection offers consulting services to help small- and mid-sized manufacturers institutionalize innovation, the typical starting point is the evidence that clients themselves offer. Says Petra Mitchell: “Many of them tell us that they could definitely do it better or quicker. They know where their pains are.”
Catalyst Connection couples its fresh perspective with a broad knowledge of successful techniques to help clients craft their innovation plans.
“We’re trying to enable firms to create winning new products while managing risks,reducing time to market and reducing cost,” Mitchell says. “Significant numbers of new product launches fail. We want to improve that success rate for our companies.”
“All the tools and techniques that we’re espousing are proven methods that have been used in larger companies. They need a little extra translation or simplification to make them relevant for smaller companies.”
CREATE A COMPANY-WIDE CULTURE OF INNOVATION
If innovation is a process that can be conceived, implemented and measured, it stands to reason that it should involve the entire company, not just those executives and staff charged with product development. The spirit of innovation should be inclusive and pervasive.
“A lot of small to medium-sized firms don’t have the resources to put together an innovation initiative,” Mascitelli says, “so it has to be integrated into the process, embedded in the DNA.”
When selecting your innovation team, cast your nets wide.
“You wouldn’t want to restrict it to certain people in the company at the exclusion of other people in the company,” Tucker says. “That’s a conceit that’s carried over from the previous century, that only a few people can contribute to the innovation process.”
If you’re the top decision-maker, your presence in any innovation exercise is vital.
“Attendees need to include the people who have both the market insight and the clout to decide if the requirements need to change,” Mascitelli advises. “It won’t do you much good if you don’t have the decision- maker there to say yes or no.”
Designating a process leader with senior standing will demonstrate how highly you value innovation. But the thrust for innovation shouldn’t end there. Remember, good ideas can come from anywhere in the organization. Instead of dismissing your most creative thinkers as oddballs and fringe players, thank and congratulate them . . . and encourage them to channel their creativity in fruitful directions.
“We need to train them in what kinds of ideas we’re looking for so they know the sweet spot,” Tucker says. “They are difficult to manage. They don’t dress for success or go along to get along. But they excel at innovation. We need to tell them what we’re looking for and ask, ‘What out-of-thebox solution can you come up with?’”
Case Study: Skunk Works
A casual observer might think that a company as successful as Wilton Armetale, with steady production, a host of reliable customers and repeat business, might not need much in the way of innovation. But Steve Wilton and Ken Lefever see their situation very differently.
“We have a very mature business,” Lefever says. “We needed to create a team dedicated to new product development and opening new channels of distribution and potentially creating new brands. When you look at the business landscape 10 years down the road, it’s scary. We believe that if we don’t innovate, we’re not going to be around 10 years from now.”
Early in 2005, the company adapted the Skunk Works technique (pioneered at Lockheed Martin) by forming a small team that soon grew to include others from the office and the foundry. To supplement its weekly Webcasts, the team meets face-to-face once each quarter. Ideas hatched in Skunk Works sessions are documented and placed in a product development book. From there, they’ll receive more formal consideration.
Some ideas are deemed impractical or otherwise unworkable. In those cases, the Skunk Works team so informs the originators to make sure they stay in the loop.
“If people submit ideas but have no idea what’s happening to them, they stop submitting ideas,” Lefever says.
Two concepts that originated in Skunk Works already are in production. One is an entirely new brand, called Tablo, that includes woks, fondue products, sets of shrimp and chili bowls, and sizzle and grill plates. The other is an extensive line of Gourmet Grillware. The common denominator: both are enabling Wilton Armetale to bust out of the Tabletop category and gain display space as Housewares. That may seem a subtle difference, but the new lines are introducing the company to fresh markets.
Also in the works is a potato stake that would eliminate the need to wrap spuds in foil before cooking.
A few ideas that emerge from Skunk Works don’t have that sweet smell of success. One participant thought he’d experienced an “Aha” moment when he drilled a hole in a Wilton Armetale bowl, inserted a piece of PVC pipe and offered up the contraption as a new sink. The sink sank . . . but only for now.
“Who knows?” Lefever says. “Down the road, sinks might work.”
After a recent series of workshops and talk shows for Pennsylvania manufacturers, Robert Tucker was interviewed by Pennsylvania Manufacturer magazine for his insights into developing a systematic approach to innovation in small and mid-sized manufacturing companies. In this article, Tucker and other innovation experts urged CEOs to assess how many potential breakthrough, substantial, and incremental innovations were in their pipelines, and to take other steps to build capability.