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.

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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.

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.

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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.