why integration of continuous improvement with...

WHY INTEGRATION OF CONTINUOUS

IMPROVEMENT WITH LEAN AND INNOVATION

IS SO IMPORTANT

THE CHALLENGES OF THE NEXT DECADE

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Short of Breath Syndrome

• … In many organizations today, we observe that managers are more and more breathlessness in their effort to continuously improve their competitivity…vs international competition!

• … Dr Feigenbaum, a famous quality guru, said a few years ago: I want to reassure you, it is only the warm-up period!

• The actual level of competitiveness is still low compare to the next 10-15 years!

Need for improvement and innovation!

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Why we need innovation… now?

Your organization “X” achieved great progress over last years

•Sustain demand for your products

•Increased business

•Growth activities in USA market

•More significant power un your market

•Good business years; good EBITDAS

. . . But you’re still facing important challenges

•But you are still facing:

– Variation of CDN $ vs US $

– A cost of your raw materials

– Uncertain economy

– Growth level is diminishing

– Pression on prices

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Why we need continuous improvement today? (example)

Raufoss achieved great progress over last years

• New type of product for automotive industry

• In a growth market share for aluminum

• Future demand is good

• Being present on European /North American and Asian market

• Raufoss has a technological advantage

• With good manufacturing performance (OEE)

. . . But you’re still facing important challenges

•Variation in money change rate

•Since 2008, more economic challenges…softer demand

•Old (steel) competitors back

•More pressure on the costs

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…need to operate at full potential…

• Your company and your products Have very good reputation

• You have new well equipped lines, Canada, China, Mexico…

• You are innovative

• At first glance, you’ve slowed down in your continuous improvement

• You don’t operate at your full potential

It is why you need to be ahead of competition

• Need to have an improvement plan to achieve your full potential

• Need to improve your competitiveness

• Need to introduce “stretch targets”

• And turbocharge your continuous improvement

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Market Survivor Profile

Price

Plants

type

A

Plants type

B

Plants type

C

Futu

re

Costs

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A challenging Economic environment

In most companies, we observe a systematic reduction of EBITDAS

$ M

illio

ns

of

do

llars

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Due to Slowing Growth

And increased costs of your raw materials,

…Critical need to innovate

to

Create margins of tomorrow

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What Makes the Difference ?

The genetics of your plants

The DNA Factors

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Impact of a Successfull Strategy Lean

Time

Performance

Benchmark

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Strategy for Financing your Innovation Initiative

First,

get your full potential

of business

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Synergy of Means

…to finance your innovation!

Achieving your full business

potential/ value added

activities

Sustain your improvement strategy and

effort to sustain your financial performances

Multiply innovation in

new and existing markets

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Implement an innovation strategy to maintain your best performance of

past years

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Quote

“…promotions may win quarters, innovation wins decades.”

Bob McDonaldChairman, President and CEO, P&G

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What is innovation?

• Innovation: (noun) a new idea, device, or method; the act or process of introducingnew ideas, devices or methods. Source: Merriam Webster Dictionary

• The word « innovation » itself descends fromthe Latin words in and novare, meaning ‘tomake new’.

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What is needed??

Innovation is difficult for well-establishedcompanies. By and large, they are better

executors than innovators, and most succeedless through game-changing creativity than by

optimizing their existing businesses.

McKinsey

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By definition, Innovation must be…

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It’s not…of compromise

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Lean Culture?...in Innovation

• Startups thrive in extreme uncertainty

• The future is unpredictable, customers face a growing array of alternatives, and the pace of change is ever increasing

• Startup do not use standard forecasts, product milestones, and detailed business plans.

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« In a startup ‘fear of failure’ drives speed and urgency.

In a large company ‘fear of failure’ inhibitsspeed and risk. »

Steve Blank

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Since 2008,

• We have entered in an economy of soft growth…

• …that is not good for prices.

• So you need the support of a powerful innovation strategy to stimulate your growth and increase your profit margins.

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But Mainly Organizations will have to Reinvent Themselves

• Need to revisit your “why”

• Need to rework, redefine your mission.

• Improve the role and involvement of your employee:

– Needs of a new type of employee/partner…

– …Co-creator of your business of tomorrow(In partnership with your clients)

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Main Options

1. Transfer of resources in surplus toward value added activities. Ex.: Transfer them toward new jobs with more value added…

2. Free new resources to invest in innovation.

3. Free “X” number of people and reinvest them in an innovative project outside of your organization.– Journey: Out without return

– Obligation to create their new future

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Create an Innovative Project Outside/Detached from Main Organization/Head Office

• Type of mission toward Mars – aller simple

• Mobilize a team of 50 peoples to create a new business from scratch

• Locate them outside of existing places

• …make it a true mobilization project

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Mobilization teamChange leadership

“The exercise of power alone in the presence of witnesses...” H. Sérieyx

ManagementUnion

executivesOpinion leaders

Management proposes

Trust at issue Weakened

leadership

Employees dispose… Videos on demand Cafeteria referendums Taking charge of their plant…

The mobilization process…

• …Enables change quicker than what is typically expected…

• …Creates a real “shift” in the plant’s energy…

• …Highlights the emergence of new opinion leaders, who are extremely supportive of the process…

• …Can only be created around a uniting factor for all: The future / the plant’s survival (archetype)

• …Gradually moves you away from traditional modes of negotiation… Towards a model of cooperation.

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Project over 18 – 24 months

• To create a new business with a new “WHY”…outside of your traditional activities

• To put positive pressure oh both side…– Your organization(-50 people)

– New business (+50 people)

• New business

• New offices

• As Saturn within GM– New rules

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• New business modes of co-creation of new activities

• Imagine “the context of a journey toward mars - one way trip”

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http://fr.slideshare.net/trevor/the-lean-enterprise-keynote-from-lean-ux-nyc-2014 40

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• Utilisation of mobilization type process to facilitate a new group or unity of people outside of the organization.A mobilization type would be very useful to channel the energies of the group. Redefining a new “why” would be very useful too.

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It was Mr. Paolo Azuela, a housekeeper at the Ritz

Carlton Hotel in San Francisco.

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• Mr. Azuela…And the bellboy who picks up your bags…And the doorman who hails you a cab…are authorized, on the spot – no

signature from above…to spend up to $2000 to fix any customer problem.

There are many people with exaltedtitles who cannot spend $2000

without six signatures!

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Innovation: We Must Involve Everyone!

•Safety 25 years ago, one in charge

•…Safety today, everyone’s job!

•Innovation today, one in charge…

• …Innovation of tomorrow, a structured process, advanced tools and everyone’s involvement…

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“When you are impacted by new paradigms,…

…it is the return to point zero!”

Joël Barker

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Managing Innovation

• Management of innovation will be to the nextdecades what was quality management in years’80-’90

“Organizations that will survive will

have integrate innovation as their daily

activity!”

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A company with an innovation culture has institutionalized a reproducible, reliable, lean operating system for generating solutions to problems and creating process/product innovations for gaining and sustaining a highly competitive edge

All organizations have “innovation workers” trained in using the operating system for directed continuous innovation

Innovation Culture

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WHAT IS INNOVATION?

Implement creative ideas

into valuable and profitable

solutions

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A SYSTEM FOR MASS INNOVATION

THE NEXT BIG THING

Continuous InnovationThe Next Big Thing

The Innovation Age Has

Arrived!Are You Ready?

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GLOBAL WARNING

Due to rapidly evolving global competition, CONTINUOUS INNOVATION will become as

necessary for business survival as the ability to read and write!

Do you have the infrastructure to continually adapt in your future business world?

How are you creating or directing your future business

world?

Innovation Age Law:If you’re not innovating you’re disintegrating!

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CREATIVITY VS. INNOVATION

Creativity is idea generation

Innovation is implementing ideas in ways

that create economic value

We are all creators,

but innovation requires implementation

in your business world $

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INNOVATION MANAGEMENT?

Corporate innovation management is where

quality management was 20 years ago

Billions spent on R&D each year with uncertain

ROI and time to market measured in years for a

typical company

Innovation is viewed as “R&D’s job”

Innovation requires broad & specialized knowledge

Lack of innovation operating system for all to use

Risk averse culture and physiological inertia

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A high performance organizational system that

continually creates promising ideas or solutions and

transforms them into powerful new ways of creating

value and wealth

“Most companies lack an “Innovation Engine”

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INNOVATION CULTURE

A company with an innovation culture has

institutionalized a reproducible, reliable, lean

operating system for generating solutions to

problems and creating process/product

innovations for gaining and sustaining a

highly competitive edge

All organizations have “innovation workers”

trained in using the operating system for

directed continuous innovation

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BUSINESS AGE EVOLUTION

Time (Wave)

Bu

sin

ess

Age

Land Worker(Farmers)

FactoryWorkers

OfficeWorkers

InformationWorkers

KnowledgeWorkers

InnovationWorkers

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Innovation Engine (I-TRIZ)

Inventive Problem Solving (IPS) Generate multiple

innovative solutions to meet consumer’s spokenexpectations

Anticipatory Failure Determination (AFD) Reduce failure risk for

consumer’s spoken & unspoken expectations

Directed Evolution (DE) Strategically evolve future

generations of technological systems & products to drive consumer excitement!

Control of Intellectual Property (CIP) Maximize IP value and

create patent fences around the directed evolution of technology & products

®

©Ideation International Inc. 2012 96

Foundation:

TRIZ, the Theory of Inventive Problem Solving

Russian acronym for the Theory of Inventive Problem Solving

Genrich Altshuller

Systematic, structured way of thinking

Science of technological evolution

Results of over 55 years of research analyzing over 3 million worldwide patents within all engineering disciplines

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TRIZ HISTORY “EVOLUTIONARIES”

Charles Darwin1809-1882

Natural EvolutionNature’s Inventive

Problem-Solving

Genrich Altshuller1926-1998

Technological EvolutionHuman Inventive

Problem-Solving

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Patterns of Evolution:

The Primary TRIZ Postulate

Systems evolve not randomly, but

according to objective patterns

These patterns can be revealed from the

research of the history of technology,

markets and society and purposefully used

for systems development without

numerous blind trials

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Patterns of Evolution

1. Evolution toward Increased Ideality

2. Evolution toward Increased Dynamism and

Controllability

3. Increased Complexity Then Simplification

4. Evolution with Matching and Mismatching Elements

5. Evolution toward Micro-level and Increased Use of

Fields

6. Evolution toward Decreased Human Involvement

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Innovation Management

“Innovation has nothing to do with how many R&D dollars you have…it’s not about money. It’s about

the people you have, how you’re led, and how much you get it” – Steve Jobs, Apple, Inc.

PersonalCapabilities

SubjectKnowledge

PersonalMotivation

x x

The people you have

ManagementSupport

x

How you’re led

x 1 + CI-TRIZ

How much you get it

Innovation Process Capability =

I-TRIZ Acceleration Factor

©Ideation International Inc. 2012 101

Innovation Culture

A company with an innovation culture has

institutionalized a reproducible, reliable, lean

system for generating solutions to problems and

creating process & product innovations for

gaining and sustaining a highly competitive edge

and new ways of creating value and wealth.

All organizations have “innovation workers” using

a system for directed continuous innovation.

©Ideation International Inc. 2012 102

Reinventing the wheel?

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Innovation: The new face of Quality

For more than 70 years, we increasingly pampared ourcustomers by giving them what they want. Customer nowassume that quality is a given……Quality has peaked from the line worker on the shopfloorto the corporate executives.In the future economy, we must deliver competitiveadvantage based on features rather than quality alone.The quality of innovation will become a differentiatingfactor……So our businesses will have to move from qualityimprovement to innovation improvement.

Praveen Gupta

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•“Me too product”•Price wars•Price reduction request•Variable/thin margin

•Distinctive product•Branding that need constant marketing support•Prices over average•Margins still aceptable

•Need for new innovation•Product breakthrough•Rapid evolution vs existant•Directed evolution•Optimum margin•High prices/without competition

Product Maturity Grid(S curve)

B

A

C

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• For most organizations, the ability to deliver innovative solutions on a sustainable basis requires a strategic organizational architecture optimized for business growth.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Ambidextrous Organizations – With “starved resources” a reality at many large

organizations, functional managers are often reluctant to allocate funding and staff to projects they perceive as risky, or that don’t help them achieve their short-term performance metrics. Ambidextrous organization designs create distinct units that have their own unique processes, structures and cultures that are specifically intended to support early-stage innovation. These units, often comprised of one or more innovation teams, reside within the larger parent organization but have been set up to support the unique approaches, activities and behaviors required when launching a new business.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Venture Boards – Organizations such as Procter & Gamble, Johnson & Johnson,

Nokia, and Kimberly-Clark have established formal venture/advisory boards focused on bringing external perspectives inside, which ultimately drive innovation and guide strategic investments. Unlike a traditional advisory panel that provides industry and market-related advice, Venture Boards pull together the best thinking from both inside and outside the firm, all within a flexible structure that focuses on a single goal – to discover, evaluate and drive enterprise growth opportunities. Innovation Councils An Innovation Council is a small, cross-functional governance body of senior managers that enables cross-business / function / geography decision-making and coordination.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Innovation Councils – An Innovation Council is a small, cross-functional

governance body of senior managers that enables cross-business / function / geography decision-making and coordination. Innovation Councils ensure that innovation-related activities in various parts of the organization are strategically aligned and coordinated, and are supported by appropriate processes and resources. From a leadership standpoint, council members’ roles involve removing internal roadblocks so that enterprise innovation can be effectively managed.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Cross Group Solutions Teams – Cross Group Solutions Teams are self-directed teams of

individuals chosen from selected business units, who work together for a period of time and have a specific charter, often looking to identify new opportunities that combine the competencies of discrete businesses. These individuals, (technologists, consumer insights experts, marketers, manufacturing specialists, etc.) are assembled to help identify or pursue white space opportunities for which no single business group has formal accountability. In some cases the individuals relocate and reside within a single physical location for the duration of the project.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Thought Leader Resource Networks – A Thought Leader Resource Network is an external network of

expert practitioners and thinkers that can tapped at any time. Thought Leaders within the network come from companies, universities, consulting firms, research institutions, contract manufacturers, think tanks, and other organizations. Often under a non-disclosure agreement or as-needed consulting contract, at a moment’s notice they provide specific knowledge, foresight or recommendations to specific issues, challenges and opportunities. Because they are all connected to their own knowledge networks, they can also become the doorway to additional strategic resources and relationships.

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Organizational Models for Innovation Organizational Designs that Support Strategic Innovation & Growth

• Open Innovation Networks

– Proctor & Gamble has leveraged an Open Innovation strategy with great success in the past few years. While many companies have historically looked to their own R&D efforts to drive innovation and growth, Open Innovation proponents argue that today’s business logic has changed and that companies today must embrace new strategies for systematically tapping into ideas, resources and technology from the outside.

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114© 2009-2013 Ideation International Inc

China’s President Mandate

to increase Innovation

Chinese President : “We have to adapt to

the developing trends, keep up with rapid

advancements. This requires driving

innovation, systematic innovation,

technological innovation and other areas of

innovation.”

115© 2009-2013 Ideation International Inc

Systematic Innovation What is common between Iran and China?

Both have implemented government-directed Knowledge-

based System for economic innovation

Government oversees both Academia and Industry

Chinese President Hu Jintao and Iranian

President Mahmoud Ahmadinejad during the

12th Meeting of the Council of Heads of

Member States of the Shanghai Cooperation

Organization (SCO) in June 2012.

NIS - National Innovation System

Government

IndustryAcademia

Knowledge-Based

System

116© 2009-2013 Ideation International Inc

China’s NIS Results to Date

• Aerospace manufacturing has advanced 2

generations of technology in the past 10 years

• National Innovation System (NIS) Efficiency

rankings:

– China # 3 (99% efficiency)

– US # 19 (26%)

– Sophisticated cyber warfare capability

– Obtained F-35 plans in 2009, updated designs, built

for 25% less than F-35 and flew first flight in Nov

2012.

117© 2009-2013 Ideation International Inc

US National Security Issue China apparently reverse-engineered the JSF F-35 from

blueprints that Lockheed Martin found were stolen in 2009.

Lockheed Martin found “6 to 8 companies” among its

subcontractors “had been totally compromised – emails, their

networks, everything” according to Lockheed Martin chief

information security officer Anne Mullins.

China then made technology changes to the F-35 design.

Their J-31 does not have a STOVL (Short take-off and

vertical landing) version like the F-35 does.

This eliminates the need for a single engine, and allows the J-31

to have an improved weapon-bay volume, shape, heat signature,

and noise, according to Aviation Week & Space Technology

reports.

J-31 F-35

118© 2009-2013 Ideation International Inc

Iran’s NIS Results to Date

75% of all research funding is from government

In 2007, Iran was 25th in Nanotechnology articles.

By 2010, they were 15th. By 2012: 10th

Iran has 31 National Science and Technology parks

Iranian scientific and technological advances in recent years

2nd to Russia in underwater anti-submarine rocket technology

1 of 5 countries to develop ammunitions with laser targeting

9th country to launch domestically-built satellite into orbit

Iran is on track to be 4th in world for research output by 2018 Aerospace, Nuclear Science, Medical, others

Possess UAV scanning and recon systems technology Determined from crashed U.S. UAV. Cracked encryption codes.

"The Americans should be aware to what extent we have infiltrated the plane,"

General Amir Ali Hajizadeh, military aerospace chief said. He said that Iran had

managed to hack the controls of the drone, thus enabling the Iranians to

reverse-engineer the aircraft to make its own copy. (from BBC)