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Process innovation: A key to unharvested wealth
By Roger La Salle
Process innovation is traditionally viewed as more appropriate to the manufacturing sector, but in fact, process innovation applies to everything we do – manufacturing, services and even management processes. It aims at improving business outcomes by cutting costs. Properly implemented, process innovation comes with little risk.
Further, a dollar saved in process improvement goes straight to the bottom line as a full dollar, whereas increased revenue targeted from heightened sales activity translates to only some portion as a bottom-line increase.
The more common process innovation approaches include, Six Sigma with its aim for almost zero defects, lean manufacturing that focuses on cost-down initiatives and waste removal, and Continuous Improvement that aims to involve the entire organization in looking at ways of endless incremental improvement.
Innovate and remove market risk
If we accept that the single biggest risk in business is market risk – that is the risk that nobody will buy the product – then logic would have it that the best way to mitigate this risk is to find something people are already buying and simply improve it. This, in fact, is what innovation is all about and leads to the ideal definition of innovation as “change that adds value”.
Nokia is one of the world’s greatest innovators, with new improved, more-featured phones coming on to the market every six months. They understand this game perfectly.
Car companies are pretty good, as well, with facelifted models every 12 months and models bearing a new shape, aimed at rendering your present one obsolete, almost every three years.
Why should the message be different for processes?
Create a paradigm
Do you realize that some of the world’s great businesses have grown on the back of nothing more than improved processes?
FedEx, DHL and UPS did nothing more than look at the very successful postal service and innovate it to provide faster deliveries.
So, too, did Dell Computers, Reuters and even the Ford Motor Company. Henry Ford did not invent the motor car, he simply innovated the way they were made.
The list of such innovated process that spawned new global businesses is almost endless. And in the case of Amazon, they created a business with a negative cycle time, doing nothing more than finding a new way to sell books.
A structured approach to process innovation can identify complete new paradigms, if only conducted in the right mind-set.
Remember, there is always a better way.
About the author:
Roger La Salle is the creator of the "Matrix Thinking" technique and is a widely sought after as an international speaker on innovation, opportunity and business development. He is the author of three books, director and former CEO of the Innovation Centre of Victoria (INNOVIC), as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups, and in 2004 was a regular panelist on the ABC New Inventors TV program. In 2005, he was appointed to the "Chair of Innovation" at “The Queens University" in Belfast. Matrix Thinking is now used in more than 26 countries. For more information, visit www.matrixthinking.com.