Kaizen critics on Innovation: Sustaining Innovation is not Kaizen!

The rapid change of the world makes innovation a lethal weapon to become a big part of solution to bring about countries, companies, or communities to a useful change that hopefully take them to the top the leading pack in the world. Little research on the topic could give many hints that innovation is the key. There are now disruptive innovation, cultural innovation, reverse innovation and other terms that use innovations as the key.

However, the overwhelming topic of innovation that filled the market has overshadowed some important not so radical, slow and not extreme change that comes from continuous improvement that actually be the backbone of many leading companies in the world. The power of kaizen culture which embedded in top leader of the pack has been uncover in the book The high-velocity edge by Steven Spear seems to be undermined by the amount of innovation books and its varieties on the market.

Java Printing

I am not against innovation because I understand that without innovation no companies could ever bare their existence let alone leading. innovation is the key. I really enjoy reading books on innovation especially books by Clayton M. Christensen which really is the result of his in-depth research and reflection about the world of innovation.

My argument about innovation is that most of the books on innovations discussed about big changes that will lead to strategic/big step. My take on current innovation paradigm is that innovation is not enough because we still need kaizen. Some people say that kaizen is innovation also, but it really is not. The rule of thumbs is what your mind perceived what innovation is, reduce it by factor of at least 100.

When for example Clayton M. Christensen tried to detail innovation into a more elaborate by dividing it further into Disruptive and Sustaining Innovation. People get confuse because first, where is then Kaizen? Second,  a strange combination of words is used (Sustaining Innovation!).

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The Innovator’s Dilemma (Christensen 1997) identified two distinct categories—sustaining and disruptive—based on the circumstances of innovation.

  1. Sustaining Innovation : when the race entails making better products that can be sold for more money to attractive customers—we found that incumbents almost always prevail.
  2. Disruptive Innovation :when the challenge is to commercialize a simpler, more convenient product that sells for less money and appeals to a new or unattractive customer set—the entrants are likely to beat the incumbents. This is the phenomenon that so frequently defeats successful companies. It implies, of course, that the best way for upstarts to attack established competitors is to disrupt them. (Low end disruption and New market disruption)

Confusion happen among the practitioner of whether Sustaining Innovation is Kaizen because it is also about making better products to attractive customers. Additionally, two words of sustaining and innovation are both contradictory in nature in a way that when innovation happen, change happen and it moves the object of innovation to some future state.Thus actually it is inappropriate to give the name “sustain”. Sustain means almost equally to maintain. Hence it means the innovation going nowhere but only maintain and hence going nowhere.

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History wise, the Kaizen term exist already since 1986 which is kaizen/continuous improvement which small incremental improvement. However, it seems that the founder of kaizen concept had predicted that confusion between Innovation and Kaizen will likely to happen.

This big misconception has been cleared before by Masaaki Imai in 1986, a notable quality philosopher and practitioner and the founder of Japanese consulting company namely Kaizen Institute or best known by the west as the father of Continuous Improvement. Misconception of innovation happen when people associate immediately innovation with improvement. The truth is that innovation indeed is improvement but improvement is not just innovation. Improvement consist of Kaizen and Innovation in which until the next innovation, kaizen will improve the system little by little.

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From the graph it is clear that Kaizen perfected Innovation. It means that any types of Innovation whether it is disruptive innovation, cultural innovation, reverse innovation will be make perfect by following through with Kaizen afterwards. Kaizen will target improvement until next innovation.

Hence it is very clear that innovation itself is insufficient to create a winning edge and that innovation coupled with relentless kaizen become the ultimate answer. This is why in my opinion, despite of the effort to rally with other companies toward Innovation from generating, managing, until applying innovation many firms still happen to be in the lower league. Because Innovation without Kaizen is just like “Pound Saving, Penny Foolish”. It seems good that you get to save many Pounds, but other companies take care also every Pennies possible with Kaizen and overtime they who cares for both thrives.

Supermarket Stocktaking, Happiness in Working and a Lesson of Variation

I am considered myself as a kind of person who is so interested on listening more than speaking. For me, being able to listen to ideas, a glimpse of someone else’s life experiences or a feeling of someone about something is so inspiring. I can learn from the story and get an idea of things that I had not realize before because I just never thought it would be possible, never experienced it myself, or simply didn’t know that such a thing could exist. By listening more, I can open myself to the presumption world that I previously held  to a new perception of the world as I listen to the story of people around me.

This post is referring to my comment on my dialogue with one of my friends. He has an interesting experience in which I had not any experience on  being employed in the type of industry he was in. It was all begin in a totally normal day. After lunch, we had a normal afternoon chat that suddenly led to a story of his previous employment in Supermarket Industry. Due to my curiosity, I started to ask probing questions that led him to tell his own experience working in a supermarket with a role as an assistant store manager with most activities that deal with audits.

What caught my attention was when he talked about his experience in stock taking procedure and penalty that he did in his time (and I believe still many also have the same principles even until this time). He told me that in his company, stock deviation from the ideal value of difference between beginning of month and end of the month in comparison with actual reality value of difference between beginning of month and end of the month difference will be assigned to store employees. It means that, if beginning of month stock minus sold product in that month ( which this become ideal end of month stock) is not the same as actual counting at the end of month stock, then the difference between ideal and actual counting in the form of amount of money will be paid together by employees from their salary to substitute lost products .

When he told this, I quickly recalled a wise words from Dr.Deming. Then, I found the exact same story that happen in Deming’s book titled “Out of The Crisis” in 1982. Deming has already elaborated what is wrong with this kind of system setup and why management not only in manufacturing industry but in all industry, even government, education, and any systems that has management on top of it has to learn the knowledge of variation.

Stock counting at the end of the month, if deviated from the ideal amount, can cause from many factors. the accuracy of inventory system, security of store from thieves, logistics in store, and still many other factors. It is indeed easy to directly attributing lost of stocks to employees for replacing the money that lost with the assumption that all lost rooted in the negligence of employees to prevent it from lost without looking into details about the root cause. However, by doing this, it is also easy to get trap into a bad system where everyone is dissatisfied, work is stressful, and at the end surviving will be impossible if not very difficult without sacrificing employees.

Actor businesswoman express sadness isolated in white

Imagine a staff that start to work in a company with a good pride. He and the company both have an expectation on both sides. The employee starts with a willingness to contribute to the company maybe even thinking that this company that he will start to work will be even better, fun and fulfilling. It is also the same good expectation that come from the company that hired this employee, because after all resources available in company’s labor pool has been filtered, this man has the best fit with the company to help reaching for the company’s goal. The new employee is ready to grow with the company and contributing the best effort possible. Isn’t that exactly what we feel when we want to start working in a new company? Excited! Happy! Want to prove ourselves! and having better a time? Sadly, this man so shocked to find the fact that even though he begin his job by working as hard as he can with the will of contributing his maximum effort and with their own heart and soul trying to be nice to every customers coming to the shop, he finds himself at the end of the month getting paid with less salary than promised and that they ought to receive it due to stocks lost that they don’t have any ideas at all of  how it could be lost, why they have to be the one who take the risk of something they just don’t have any idea about, and the fact that he cannot improve or doing anything about it.

Drawing from the world of manufacturing, this could be seen as assigning defect of products to the workers that works in assembly line. Whenever there are defects, put the blame on workers with the reason that workers are the one who actually works assembling all parts into a product. This obsolete philosophy have proven to be a downfall of manufacturing industries before Japan could set the pace again and followed by a reparation to systems of managing manufacturing in other countries and companies.

People in management should as Deming urge long time ago and yet still valid, realize that there are two types of variation (natural/normal variation and assignable/special variation) Classifying defects in case of lost product in supermarket into these two kinds of variation classification will give us more insights. If a defect/lost product happen, manager should be able to determine if this will attributable to workers/store employees or to system that managed by management. The action directly blaming workers for a system problem then is not a wise act of management because normal variation and special variation should be handled in different ways. .To learn more about differentiating this, I would suggest reading “Out of The Crisis” or “The New Economics” by Deming.

Young business woman presenting colorful charts and diagrams

As we came to know that those defects or lost of products are caused by system, then improvement to a system could reduce the lost of product. In relation with supermarket system, let’s take one defect example of lost product. Previous assumption is that employees should watch closely everyone on the store so that no product is lost, but employees indeed can be forget or not paying attention to someone stealing because fatigue which so normal. What is not normal is to assign tasks that obviously normal people with normal capability cannot do and give them penalty for it.  In fact, lost product happen also because the environment provided thieves to steal some products despite of the hardworking that employees have done in preventing it. This environment setup is management job. A system should be setup by management to prevent lost from happening by creating a better environment for employees to work and a better system to prevent lost of products. Usual flow is that mistakes that management makes is attributed that should be management responsibilities (system design and improvement) are all assigned to employees.

What can we learn from Indonesia’s Governor Jokowi : Leadership and System

Jokowi is a name that is probably unknown for people that lives outside Indonesia. It not uncommon that his name was not being heard, because even in Jakarta, the capital city of Indonesia, his name could only be heard for first time in the late of 2012 where people started to get awareness of him. Currently, he is a newly elected Indonesia’s Governor which for many people sparks a new light of hope in Jakarta City.

 

I am not interested to discuss about government or the best ways to manage a city. Instead, we will use him as an example of how a high velocity organization could arise not only in manufacturing, service industry, or military, but also in public administration system. Yes, yes,  I know that Jokowi has just been elected as a Governor of Jakarta around fourth quarter of year 2012. But we will later see, as I elaborate later, why I think that his management system will end successfully.

Watching people managing any systems is the same as watching a football match, you knew already who will win the match before the match over by watching both teams play. But you will still wait ‘till the end of the game to make sure that there is no coincidence that the other team unexpectedly win. Good managed team will win 90 % of the time while the rest of 10% is attributable to special variation.

In football game, those persons that often watch football match will know that a particular team will win against another before the game is ended. The way strategy is being executed in the football field will shows how the players play together, using each persons’ skills and combining strength to reach synergy that collectively create a good play. A good team come from a good manager. A good manager might not be the best player in the field. He could be the best player, but for sure he is at best at managing system. A good system will triumph most of the time, with some special minor exception of good system that failed to succeed. 

Companies in any industries has a role of managing its system. The unique things is that they all have different products as well as customers. Hospital, Manufacturing, Tourism, Public Administration. Thus, there are different ways to deal with managing system in each of these industries. However, managing a system is always have the same principal across industries, with some modifications to the industry we are trying to apply it in.  Here, I will present some facts across industries that mainly drawn out from my main industry of expertise which is automobile and try to show you how Jokowi acts matches with what has been a successful and proven philosophy in the world of automobile.

1. To change a system, you cannot be inside it.

Jokowi know this very well. He is not trying to change the system by being inside it, but he directly go “on top of it”. Unless we have one person that can changed the system on the top of organization’s pyramid, we cannot changed it by entering into it. We have to be above it. There is no use if you have an idea that could significantly changed the system when you are down below pyramid in a bad system. It is because in a bad system, your good idea considered as bad. because bad system nurtured bad ideas. Thus, only bad ideas goes into the top of the pyramid and got heard.

Jokowi is not trying to be hired as an employee, but he aimed for the top. He knew that if he want to changed the system, it has to be from the top. Many times good and diligent people got into a bad system and in no time these people tired of challenging bad inertia in the bad culture that has already ingrained and these good and diligent people become adapted to a bad system by producing bad ideas and doing unproductive activities.

Many cases that geniuses that have great academic records, or good carrier in foreign country, when they tried to come back to build their own country, they are shocked that they found their brilliant ideas are not working. People do not agree, not supporting it, or maybe no one believes it.

Mr. Habibie is so great at anything about airplane. He foretold “I want to make an airplane for my country”. He is more than a genius. But again,  in a bad system, he just not fit. He successfully created PT.Dirgantara, but it wasn’t successful because that time he has to interact with a bad system that exist in the country. Bad system is like a disease, it spreads to others around it so quick.

 

2. Create a system perspective for everyone

Everyone could work hard and do their best but still at the end the result is failed. As Dr.Deming said, it is no use to do your work as best as possible. We have to do the right things before we do our best. To make people able to evaluate themselves that they have already do the right things, people has to understand their position within a system and hence they know how to contribute to it.

In Toyota and in high velocity organization such as Pratt & Whitney’s, Southwest, Alcoa, and other leader in their own industries, knowledge of how a particular section or job fit into a whole system is very important to know for all the people inside the system. Toyota have always explained and educated a new employee about his role and responsibility. But in addition to that, Toyota makes sure that this new employee also know about how his role and responsibility will impact the whole system by explaining the whole system from manufacturing, quality , engineering ,design and so on.

Taking complex system, then divided it into parts, try to manage each part as best as possible is absolutely false. Because it tries to improve each part taken separately and destroyed the system. It is like taking a big mirror from store and you break the mirror into parts for optimization in carrying it to your house and when you reach your house, you reassemble the mirror again, and you are then shock that the mirror looks different, it do not work when you want to look at yourself and the parts seems not fit together as it was in the store. Because It simply have broken.

Jokowi tries to fit everyone to the whole picture by not only making everyone realizes their role and responsibility within a system of public administration, but also that he shows to all employees about the whole system. For example, he put out a YouTube channel that could be seen by all employees so that employees know what really governor do and what really happening in other sections of public administration so that they can really contribute by doing the right things at their best.

3. Going to “Gemba” and “Genchi Genbutsu”

Gemba is a Japanese term that means real place while Genchi Genbutsu means to look by yourself the particular physical things that being a concern. People in automobile always use this concept of management extensively. Managing from office is not enough because paper based management neglect real concerns. By the time the problem is translated into paper and travel to office as a report, many things has already been happened and information may also lost in the way or got distorted by the time it reached office. Additionally, information, if not getting distorted it will somehow go perish and by the time people from the office try to reconstruct the problem, all people connected to it has forgot about it or the environment has already simply changed. It is because Information has a characteristic of sensitive to distortion and perishable. 

Thus, going to Gemba will means getting problem found from the right persons in timely manner, isolate as quickly as possible before spreading, and solve as soon as it arise. Going to Gemba also means Genchi genbutsu or seeing the real thing as it is.

Jokowi really knows the values of going to Gemba and Genchi Genbutsu. He first of all realizes that civilian in Jakarta is his customers and the success of his organization is the satisfaction of customers. Therefore, getting the customers’ concern is a top priority. He knows very well that customers is where he could really get the real problem on time without distortion and therefore despite of all the accusation that he is wasting time, he still do go to Gemba.

 

In addition, Jokowi’s success in Solo city where he lead for several years as Governor before he became governor of Jakarta is not merely because of he is a superpower person or a very genius person. He might be one of them, but alone, only destructive change that could result ( firing, hiring, penalty, force procedures). Instead, he manages the system with constructive change that can only be achieved through collaboration and cooperation that obviously not a work of a single hero. Thus, those leader that could really turn the situation is good at managing collaboration and cooperation as a vehicle to constructive change. Instead of using power to generate policy that is destructive to system. These leaders can use it to create collaboration that will be fruitful as these leaders believe that change should come from collaboration that arise from a system management. This will make a lasting change even after the leader is not anymore responsible for the system because the system has already built, run, and improve itself.

Leader’s Job is to lead not merely giving orders.

Join Green Movement in Urban Area

Last post, in my personal article focusing on plastic bag, I have elaborated the importance of the role of Industry in determining the progress of  transformation into green and sustainable living. In addition to the Industry effort, we as a customers in any supply chain, a human that lives in the earth and a parent that will have to pass on the living environment to our future generation, has an obligation to the progress of green and sustainability of living around us.

For those of you that live in Urban area where people bustle everyday, tall buildings occupying most spaces  and transportation seems never stop their activities, the hustles will be more intensive than people that live in suburban or small city area. However, I can convince you that it is possible to still join Green Movement to preserve the good side of the city that we have know and to fix those that have already been destructed by pollution and other matters. Below are several tips for you to get to move and participate in small act to make our city Greener and more comfortable for a living.

1. Electricity and Water Use Awareness

By saving energy and water, we actually will in the end save our money.The US Department of Energy has statistically calculated the hundreds of dollars savings that could be achieved by smartly using energy and water. From Coffee Maker, Refrigerator, Fan, Clock Radio, Cell Phone Charger, Personal Computer until Printer, there are still a lot of possibility that we can cleverly reduce our consumption.

One great example is to turn off the lights if you know that you will leave the room for more than 15 minutes or you can also put a sensor to further save electricity. Another is sharing fridge. Sharing fridge seems have a little impact, but in reality, the cost of electricity from fridge itself is consider as large in comparison to other home appliances. So, instead of buying small fridge for each of rooms in your house or apartment, you can plan to share a fridge.

2. Buy Green Products

Eating organic, free-range, local and fair trade are also a great options that will definitely have a positive impact. However, because those products are rather expensive, an alternative is to to eat less meat, use canvas bag when you can, use recyclable plastic bag and buy from your local to get anything from fishes and meats to vegetables or fruits and still contribute to environment.

Buying green products will also unconsciously lead you to healthier living by avoiding more and more consumption of junk food which have bad effects that will later take away money from your pocket due to obesity, diabetes, depression and nutrient deficiencies.

3. Urban Farming

The previous two tips are all about getting better at managing what we already have. The next tips will be about making small changes that have a big impact. It starts with Urban farming. It is the practice of cultivating, processing, and distributing food in or around a village, town, or city.

Urban Farming is very fun activity to do. If you have a garden in your house, you can use it as your own farm. Even if you have only a roof (flat roof ones), you could turn it into a space for farming. Urban Farming is so easy as you can simply use your window as a medium for farming which Urban Farming Communities called windowfarms.

Urban Farming communities is now everywhere in the world, you can find communities around you with the like minded purpose and the good thing is that all that effort you spend in your farm will be fruitful as you can sell it as an organic product through Urban Farm communities and organizations. The organization also has good resources for education from methods of urban farming until ways to plant a certain plant and dealing with issues like watering and soon.

4. Cycle to Work

Another fun way is Bike to Work scheme. Using bicycle to go to work is a very effective method to achieved so many things. It is not only contributing to a more greener and sustainable environment, but also saving money for gasoline and make you more healthy. For some people, indeed, Cycle to work could also save life.

If you have a road bike, you can go to work riding it and take a shower in your office and you will be fresh and energetic to start your day. Another good alternative that I found very compelling is to use Folding Bike. I love folding bike because it gives commuters so much flexibility on the way. There are many combination of method that can be done using folding bike to get us to workplace in no time.

5. Change our Mindset from “WANT” to “NEED”

Our mindset is a powerful thing. Have you heard about feeling lonely in a crowd ? This is exactly what mindset is able to do. It can make you happy or unhappy when you decide that the circumstances seem to prove that you should have it. The fundamental change in mindset could change the way we behave and how it affects our surrounding.

To change mindset, the key is to know what our currently mindset is toward a particular situation. Oftentimes, in relations with buying or shopping, we as a customer has been automatically set our mindset into “WANT mindset”. The reason is, this is the right mindset that all retailer shops want customers to have so that customers will more likely to buy their products.

So, now we should change our mindset to NEED instead of WANT. Think before buy is a good step to take. Do some researches before buying anything instead of getting tempted on the spot when you see a very nice advertisement. Go online, watch videos, read articles and make sure that you purchase good stuffs that you need. Then, you will be surprise by how much stuffs you really need and how much stuffs you already have that are actually got there and hanging around since you first bought it.

Transformation to Sustainability : “Green” tagline is only for the Customers.

Several years ago, human was so interested in the extraction of nature to support the life of people in the earth. It was before the decreasing supply of nature due to over-extraction that the necessity to find alternative of sources to make the earth more sustainable take place. Today, we see in many places taglines of green living, sustainable earth or care nature that urge people to preserve and even cultivate again our nature that has been destructed by extraction without control.

plastic bag

This week, I went shopping as part of my regular “ weekly things to do” except, this time I got in into a very long queue line in the supermarket’s cashier. Then I realized that it is 5p.m. and as usual in this time many people going back from work and stop in supermarket for quick shopping for dinner or just grab some foods for their stock. In this long queue, I saw a plastic bag that I took the picture of it. During the queue, I reflected in my mind about how this plastic bag could be there in the supermarket, when people outside have put a large banners and costly commercials of how people should live by “going green”.

What caught me right away first of all is how the plastic bag could be there, but then having take a look into the detail, I could also see a text that stated Reduce Use of Plastic Bag..Refuse, Reuse, Recycle”. Those two reasons are quite provoking to start a post in this blog for it is an example of going to the wrong way from kaizen or continuous improvement. An example of a good and right  intention that wrongly planned as well as executed.

So, why not begin from looking at the supply chain. All products will have the same flow which basically begin from Supplier to Manufacturer to Logistics and at the end to Retailer that directly has contact with Customers that is us. Then, we have an issue that plastic bag is bad for the nature as we have seen before in the text located in the plastic bag ( “Reduce Use of Plastic Bag..Refuse, Reuse, Recycle”). From this, it is clear that the plastic bag is bad for nature, and that people should refuse it.

Then the question came up of why they place the decision on customers? Does customers do have bigger impacts to preserving nature by making choice of use or not use plastic bags?

I would say that if plastic bag is bad and customers should refuse it, then it should not be produced in the first place.

Supply Chain

By not producing plastic bag at all, customers will not be blamed for choosing plastic bag. Today, it seems like buying a plastic bag  is taboo for customers and plastic bag is the temptation that will always exist. It should not be like that, eliminating plastic bag from the early in supply chain could substantially decrease the problem since at the end of the day there is no plastic bag that could be bought by a customer.

Frankly, the current situation that happen is that customers go on shopping to a certain shop, they buy their product that they wish to buy, and then at the end either the cashier will ask “do you want a plastic bag ?” or in the cashier you can pick one. Either one you will have temptation to use plastic bag and most probably some people will somehow choose to use it.

Go Green. Hand with words cloud about environmental conservation

This is a system that has a flaw, if “green” means not using plastic bag, why you have plastic bag offered to you that tempted a customer to use it. Can you imagine one time, a customer that life 2 km from the shopping area and buy 3 kg of whatever it is and he/she has to carry all of his/her stuffs from the shopping area to his/her home by walking? it is certain for this type of person that if the plastic bag is offered to them, they will definitely use it.Additionally, it is not rare that some companies even put a blame on this poor guy by saying that if he knew already he has a pretty far distance to travel with huge amount of weight he should by himself be prepared by bringing a backpack or trolley.

But it seems still this solution has its flaw because since when the customer become a servant? customer is a king while the best is a partner. but it is not rational for the one who will sell product to customers to blame customers for their living condition.

It is true that apparently the existence of plastic bag is for helping this kind of person that really need to carry their stuffs. But, going green means not only customer being pushed by all the supply chain to act in terms of taking step in making a choice, but all of them that is inside the supply chain has to commit together in the green movement. Just imagine, if Supermarkets determined that they will not buy plastic bag from Logistics that is not green or not recyclable or biodegradable or even they will not use plastic at all and  buy other alternative bag, then there will be no customers that will be blame. Imagine that Logistics will also commit of not delivering these plastics and later the manufacturer will not produce it and at the end the suppliers will not supply it. Then there will be no finger pointing about who is wrong because the plastic bag simply do not exist anymore.

In plastic bag industry that relate closely with supermarkets, taglines of green line actually still aim solely toward customers. But we can take a very very nice and successful act from several other industry that prove to be work.

A company or industry that decide to support the conversion to green and sustainable living has two options:

  • Increasing the awareness of customers then produce product
  • Produce a product and then offer to customers

In the first approach, it bases on presumption that customers’ awareness of green living could influence what product that they will buy and this is one of the many ultimate reason of not beginning the transformation to green product early in the supply chain but instead delaying it by forcing customers to suffer by giving them a right and wrong choice.

Web

The second one, is to invent a product and offer it to customers. Basically, when we think about a product, there are two kind of how manufacturers could make a product. First type is making a product by looking at the market needs, getting the voice of customers, trying to figure out what they need and improve the product based on it. This is the first approach based on. Then, there is a second one which the customer has no idea about the product that they need at all.It is totally unimaginable for customers that before this product being produced and sold, customers have no idea that they will actually will need this and use it. (like computers, ipad, hand phone, and other product)

Many companies have gone into trap in this first approach which will bring a suffering to customers for a very long terms by trying to make them realize that green is the way of living.

Some companies is already following the second approach to transformation to a green living. There is some good examples, but let me just take two of the most important one. The first one is in the field of energy that basically try to invent green power that will later replace fossil power in the future and also in the field of transportation that replace oil power with electro or hybrid power. Both of this has taken the second approach of offering to customers a fundamentally new product that customers have not yet even imagined before.

Green power will make customers not feeling guilty anymore of using fossil power without clear alternative in front of them that they can have a much better and greener alternative. It is also the same for hybrid power. Customer will have the options to contribute to the sustainability buy buying it instead of gasoline power. For both cases, it is not easy for both industry to innovate into green power and also hybrid power since it has very big risk of replacing gasoline supply chain with hybrid supply chain and fossil with green power.

One example is Toyota hybrid car. the company has philosophy of making customers their first priority and not letting the customers to suffer between choices that they should make. The company realize that it is not right that the customers should resist themself in buying a particular cars, but it is the manufacturers that should come with alternative that still serve the same purpose but will be more incline toward caring of environment. In the first place, Toyota didn’t know that Hybrid will ever become alternative that will works, even the company didn’t know at the time of first launched. But the brave initiative for the purpose of serving both customers and the sustainability of the world leads to a solution that works for both releasing the suffering of choice that customers’ have and also contributing to sustainability of the world and society.

This way of thinking and brave decision toward green and sustainability should also emerge in other industry because to begin with the green transformation, it takes big courage from manufacturers and enormous believe that the company themselves has a will and able to contribute to bring society to green and sustainable living by starting by themselves with their own innovative product or solution. Once a manufacturer has a strong believe on this, they are most unlikely to claim to the world that they are a green and sustainable companies but what they are actually doing is putting the customers as a verdict to put a blame on.

Marketing in Disguise: Transcorp 11th year celebration

Transcorp is an Indonesian Television corporation that runs its business by owning and managing several biggest television stations such as Trans TV, Trans7 and also online news called DETIKCOM. Transcorp recently had a birthday celebration which is pretty awesome. Every viewers could experienced the huge stage, famous artists and magnificent lightning effects and on top of all that, it was a well crafted program that could entertains both live viewers on the site and also at home. I was not currently in my home country but I was able to watched it through a website called Mivo.tv.

trans

Point that worth shared is that beyond the well presented concept, grand event, fabulous design and the overachievement result, I saw the event as an eye opening inspiration for many of Small and Medium business especially in a profit base organization. In this segment of Business, they tend to celebrate the success year by year with their own staffs, have a big cake, decorating rooms in office or probably have a adventurous outing in to celebrate it. The mainstream of owners in a small business will and in general have a good logic of giving back to their employees and of course to the owner himself a reward of this achievement by spending a certain amount of budget for company birthday celebration.

On the other end of the world, when we go to a typical birthday celebration as a person, we usually invite all the persons that is close to celebrate together. It could be our family, close friends, girlfriend/boyfriend, relatives or any persons that we deemed important in our lives.

What is wrong with this? I assume nothing is wrong, except sometimes when we run our Small Business, we become carried with the ordinary and natural action that we take as a person and forget that we are actually running a business.

Unconventional approach to a “Birthday” for a company is the exact example of Transcorp. This company definitely is not the only company that take this approach, and many other big companies take similar approach to celebrate their birthday. The mind blowing fact is that the event just did the reverse of what is considered regular approach of celebrating a birthday. Instead of only taking all employee to vacation or give treat to them, Transcorp additionally also launched an event.

birthday

I immediately think of why they did all of that? Why they spent so much for a big event when all they should do is celebrated their success for that particular year that they have achieved so hard? By launching this event, they actually throw out their possibility of a bigger celebration because the budget for event can actually be use for their own internal celebration or outing.

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Then I realized instantly that when I saw the event, I feel like become more “attached” to this company as a viewer of this event because of the event that they held is so magnificent and beautiful. Now the reason is obvious, it is because the customers that make their business run. Big business put greater attention to maintaining their customers and this is exactly why they become big in the first place. There is actually no advantages of making a huge event called a celebration of a particular company for public. But the unmeasureable value of future profit is very certain. People perceive better image of the company and the effect is growing loyalty. This event is a “marketing in disguise” which is a very genius approach that could also be use for Small and Medium Business.

Some big companies or small companies usually do not recognize this seemingly covered opportunity by building more image into customers and expanding awareness with the motives of celebrating birthday. For Small and Medium Companies that have more limitation in their budget, a small event is more than enough than nothing at all.

if we can’t measure it, than we can’t manage it. But the most important things in business are those things that cannot actually be measured. –W. Edward Deming

It means one should not stuck only to numbers and quick profit, but also subjective matters that can guarantee our business in the future.

Managing by Heart: What Leaders Should Learn from Toyota

Toyota has come into test by recall of its vehicle all around the world. From the lens of customers, recall means a bad action because it looks like Toyota has so many defects. In fact, not in all recall Toyota found defective parts. But why Toyota do recall that actually give a bad impression to customers?

For those who oversimplify business and looking only into short term action, this bad impression will persist. However, the actual reason of this recall is to better satisfy customer in the long term. I would not talk here about recall issues in specific, instead, the focus on the long term and the focus on the satisfaction of customers, even when the customers still do not know that the action will satisfy them in the long term because it disappoint them in the short term.

Toyota-Logo

This ideal principal of Toyota is not only mere a tag line to make its company looks professional, but it is a living system that proves it consistency on focusing on satisfying customers in the long term.

This is the reason that Toyota is one of the leader in Automotive Industry. To be a leader, we have to focus on satisfying customers and on the other hand those who do not focus on satisfying customers in the long term will soon enough perish. This great ideal philosophy has been around us for decades.

In the Bible for example those who will be a leader has to be a servant.

Matthew 20:25-26
25Jesus called them together and said, “You know that the rulers of the Gentiles lord it over them, and their high officials exercise authority over them. 26Not so with you. Instead, whoever wants to become great among you must be your servant,

In addition, Scientifically, This term has been coined by experts to be called servant leadership.

Servant leadership is a philosophy and set of practices that, together, enrich the lives of individuals, build better organizations and ultimately create a more just and caring world. A servant-leader focuses primarily on the growth and well-being of people and the communities to which they belong. While traditional leadership generally involves the accumulation and exercise of power by one at the “top of the pyramid,” servant leadership is different. The servant-leader shares power, puts the needs of others first and helps people develop and perform as highly as possible.

Pillar of Toyota which is Respect for People and the principle to contribute to society has make Toyota a serving leader among all Automotive companies. Additionally, this behavior of serving leader not only shown in the big area as a company but also reflected in the response of the CEO Akio Toyoda when storms face Toyota.

The video below shows how servant leadership of Akio Toyoda to many segment of communities.

 

This video declare his intention on being a servant companies to the public. Not enough doing this, he also made 2 additional steps to deliver the message to customers by doing apologize talk show in television and also making a TV commercial which will incur additional cost for Toyota.

 

Surprisingly, what many customers do not know is the truly profound act from Akio Toyoda that proves his quality as a Servant Leader. Instead of getting mad and talking about profit and losing money, he went to America team and greet the assembly workers. He also delivered a really deep gratitude to all his employee to support him in the difficult situation. He knew that he is a servant to a customer. but he also knew that he is a servant of his employees and therefore he is the leader.

The servant leader will says thank you to all who support him, but an ignorant leader will get mad to all his subordinate in order to get profit get into the company back. Ignorant leader will obviously get back the profit on the short term but not in the long term due to his ignorance to all employee that experience additional suffering in the crisis from their leader. But the servant leader will get back slowly but certain. The company not only will getting back on its foot, but all employee will go forward together because the culture of servant leader is embedded and spread inside the company with its CEO as a living guide. The effect is an enormous viral movement inside the company that makes everyone in the company to try hard to be a servant leader and in the end helping in serving customers and bring the company into number 1.