Thursday, March 24, 2011

Discovering Innovation

My son, an aspiring video game designer, was one of some 65,000 attendees a couple weeks ago at the PAX East trade show in Boston. In case you're not familiar with it (I wasn’t), PAX is short for Penny Arcade Exposition. 
            It may be an antiquated name and, no doubt, dates back to the days of mechanical pinball machines, which is probably why it has been shortened to three letters. But the show, its exhibitors and attendees were anything but old-fashioned.
            A sophomore studying interactive media and game development at the university level, my son used the opportunity the show provided to mix with people he soon hopes to be working with. He dropped his business card around and picked up a few. He got insights into jobs in the industry, tried to meet the right people, attended various relevant forums on the state of the video game industry – which is exploding – and learned about where the new ideas and evolving companies are taking the state of the art.
            One forum allowed audience members to question some of the leading lights in the industry, including some of the most respected reviewers, people who can make or break newly introduced games. My son asked one reviewer what kind of games he thought would be the big sellers in the near future, the kind of games designers should be concentrating on.
            The answer was not what my son expected, but I think it revealed a lot about this person’s good business sense. In essence, he told my son not to focus on improving or expanding the current genre but rather to be innovative, to take risks, to try something new. He insisted that the industry has always thrived because of the unexpected and innovative ideas from daring pioneers.
            That points up what is truly special about this business and why it is booming. His answer intrigued and excited my 20-year-old son, and gave him hope that the oddball ideas he has that may in fact come to fruition some day.
            Do you remember that point in your career when you realized that those who are truly successful are those that take risks, rather than play follow-the-leader? I think that’s what dawned on my son. I could hear it in his retelling of the encounter. In fact, his experience provides a lesson to us all in business, no matter what we do for a living.
            As businesspeople, we can try continually to one-up our competitors by doing what they are doing, but just a little bit better, differently, faster, more cheaply, or with better marketing.
            What makes customers and prospects sit up and take notice, however, is when innovators shake up the world with something completely out of left field, something unexpected, exciting, and daring, something that challenges the status quo and our definition of “good.” Instead, they give the world something GREAT, something that blows our minds, that makes the chattering class chatter.
            My personal favorite, of course, is Apple, a company that has done this so many times that we are disappointed when they fail to startle us. Even when they just introduce updates and improvements to existing products, they excite their fans, and confound their competitors.
            But Apple doesn’t just introduce new products. They shake up and turn entire industries on their heads, in particular, the record/CD music business.
            What does it take to stimulate this kind of innovation and risk-taking in an organization? It starts at the top with leaders who lead by example rather than words. Words on their own are just words. Action gives them meaning.
            I remember once following a semi-tractor-trailer going down the highway. On the back door of the trailer were the company’s name, logo and tagline. I had never heard of the company, and its tagline didn’t reveal much about it either: “Service is Our Business.” The truck could have contained auto parts, foodstuffs, clothing, or any number of other consumer or industrial products.
            Whether the company provided remarkable service or not is beside the point. It is akin to the company that plasters “Innovation” on its signage and advertising. Is that company trying to pass itself off as innovative by including the word in its signage, or is the nomenclature in fact driven by the internal innovative climate? I suspect it’s the former case.
            “Innovation” is a fact about an organization discovered by its customers. It is not something to brag about, or to incorporate into a logo. Let the management lead by example, by being innovative leaders, by taking acceptable risks, and by allowing failure in the quest for greatness. That is how innovation happens.Not by calling one's self innovative.
            That, I hope, is the experience that my son gets to have in his chosen profession.

Monday, March 7, 2011

When "Bringing the Outside In" Means China

"Bringing the outside in" is a recurrent topic in this blog because of its central importance to a business' long-term success.
                  But these days, for an American-based manufacturing company, it can mean so much more than just keeping your employees apprised of what the competition is up to, or the state of the economy and its impact on them and your company.
            It can also mean helping them understand the people they're competing against—particularly the Chinese, who recently surpassed the Japanese to become the world's second largest economy, second to the USA.
            American workers are paid more than Chinese workers and have a better standard of living. But do they work better, harder and smarter, too? Can they make better products at lower cost than their Chinese counterparts who are paid far less and live in less desirable circumstances? If so, how soon will it be before the Chinese surpass us in productivity, quality and sophistication?
            How (and why) do we communicate that difference to our organizations? Frankly, that's a picture that has never (or rarely) been presented to most American workers. Instead, they are urged to work harder and smarter because their company is struggling to compete against cheaper Chinese imports. Or, worse, one day they learn their jobs have gone to China—or Thailand, or India, or Vietnam, or....
            The other day, I caught a snippet of a radio commentary that insisted America's manufacturing base, while not what it once was, still leads the world in productivity and output. Assuming that's true, it's not too late to save what's left, and make it better and more competitive. I believe we can always do better, and that communications can play a big role by helping raise awareness and understanding among our employees of exactly who they are competing against.
            American workers are not competing against some amorphous, nefarious Chinese company. They are competing against people not unlike themselves: people with families to support; people able and willing to work hard; people who may have low short-term expectations, but high long-term hopes and dreams.
            Let's imagine we're living in a modest hovel in central China. The government announces it is going to build a new factory in the nearby village. Instantly, thousands of new jobs will become available. No longer will we have to scrape out a living. There are real jobs coming to our corner of the world.
            As the factory is built, we and many of our neighbors are trained, prepared for a new career on a manufacturing line. And pretty soon, we're part of a large operation to manufacture a modern product for sale in the global marketplace.
            We may still be living in our hovel, but we can foresee the day when we will move into a government housing complex now under construction near the factory, and we can hope for a better life for our children.
            Back to America... We must help ourselves and our employees examine and understand this lifestyle of the people we are competing against, how it differs from our own, the life of the people who work for our foreign competitors, the workers in foreign lands who do what we do.
            Americans have a lifestyle that is the envy of the rest of the world. Is it in danger, threatened by people who today live in hovels, who aspire to government-built housing? Will these people, or their children and grandchildren be leading the lives of comfort and health comparable to that with which Americans have long been accustomed?
            We need to better understand their lifestyle, and their aspirations, their history, culture and background that they bring with them to the 21st century. To what do they aspire? How much money do they make? What does that buy them? What are their benefits?
            We can educate ourselves by reading books about China and its recent history, by staying abreast of the news, and by seeking documentaries about modern China. Fact-based films, too, can enlighten us.
            I like the Chinese film, "To Live." The story follows the lives of a man and his wife through the various transformations of 20th century Chinese society, the Maoist revolution and the subsequent cultural revolutions—from the 1940s through the 1970s to their old age, just prior to the nation’s emergence into the modern world. They were survivors. These people, or rather their grandchildren, today, are our competitors.
            In fact, their little granddaughter, who is born toward the end of the film, could well be a peer of Yu Shui, the central character in another excellent and relevant film, “Up the Yangtze.” A fictional story of the impact of the Three Gorges Dam on the people of the Yangtze River valley, it’s the tale how a young woman, Yu Shui, must take a job aboard a cruise ship to help her struggling family. There, she enters into a dizzying microcosm of modern China. She’s an unsophisticated country girl, swept up, and confused and overwhelmed by modernity. Meanwhile, her parents face the rising waters of the Yangtze, dependent on the meager wages she sends home.
            Educating and exposing ourselves to this outside world by reading and staying abreast of cultural differences by watching such films and documentaries is an important exercise. While yesterday the Chinese were manufacturing cheap toys and trinkets, today they are making our iPhones and computers, designed by Westerners.
            Tomorrow, no doubt, they will design, develop, and produce advanced jet aircraft and avionics, robotic medical devices, advanced medicines, and numerous other cutting edge technologies—the very businesses that will have to drive America’s future economy, too.
            We need better, more complete knowledge of what’s driving China and its people as well as other developing nations in order to understand how best to prepare for and respond to this evolving and improving competition. Only through those means will we be better prepared to share that understanding with our employees and excel in our increasingly competitive world.