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the
innovative LEDGER
An e-Newsletter from The Innovative Edge™ Inc. Vol.
3, No. 1, Spring 2003 A recent news commentary by auto industry analysts David Welch and Kathleen Kerwin appearing in Business Week bemoaned the fact that the Big 3 U.S. automakers are squandering their decades-long dominance in the light truck and SUV market by failing to recognize the impact of rising gasoline prices on consumers' buying behavior. Though sales of smaller, car-based SUV's - produced mainly by foreign automakers - increased a whopping 23% last year, Detroit has continued to put out hulking gas guzzlers such as the Hummer H2 and Lincoln Navigator because profit margins are larger and they've sold so well in the past. Stick with what's working and brings the highest immediate gains, the thinking goes. Eventually (assuming gas prices aren't coming down anytime soon), Detroit will be forced to market the smaller models too, but by then they will be playing catch-up to well-established brands from Asia and Europe. Putting aside the recent, increasingly vehement diatribes against them, it can be argued that the SUV was an innovation in family transportation when they first became popular. Not overly large, here was a vehicle that could serve as a hauler of people and things, go through snow and mud better than a sedan, and even do an occasional off-road excursion (very occasional for most). As people snapped them up, carmakers came out with new versions that were bigger and more luxurious, with ever-higher profit margins. The money rolled in; shareholders were happy. Probably no vehicle type was more responsible for Detroit's resurgence in the 90's than the SUV. But there's a big difference between AN innovation, and a culture of continuous innovation that recognizes the dynamic nature of the marketplace and the need to change with it - or even ahead of it. There is risk involved; hopefully through good market research and financial planning it is prudent risk. It also takes a willingness to forgo short-term gains in favor of investing in forward-looking technologies, even though they may not pay off for some time. Toyota and Honda reportedly lose money on every gas-electric hybrid car they sell. In time this will change, but by then other manufacturers who jump in with their own versions will be playing catch-up from both a technology and brand identity perspective. A
recent sign at a California gasoline station shows prices listed as:
Regular: $2.23, Plus: ARM, Premium: LEG. I suspect that when giving
up one's body parts is no longer a status symbol, this particular
innovation will have run out of gas. Hopefully there are enough forward
thinkers at the Big 3 to re-fuel their companies' product pipelines
and keep them competitive. *
* * * * * * * * * * * * * * * * * * * 1. Work on initiatives that are relatively focused and manageable. Large-scale innovation initiatives may need to be put off for more robust times. In the meantime, the same quality of creative thinking and collaboration can be aimed at modest goals that are more easily (and inexpensively) implemented. 2. Reward employees or teams for creative ideas that are adopted - and for those that aren't. Keep people flexing their "creative muscles" on a regular basis. They'll be more ready to help discover the big breakthroughs when the economy finally comes around. 3. Executives, managers: show 'em your own creative side. Few things convey your own receptivity to new thinking as engaging in it yourself (at appropriate times, of course). It's also fun, and a great release from daily pressures. 4. Use facilitators to lead brainstorming sessions. Unfortunately, many people are more adept at quashing new ideas than generating them, and the naysayers seem to get louder during lean times. An experienced facilitator will help ensure that ideas are given a fair chance, and that those offering them stay in the game. 5. If you can't
use an idea now, put it in the bank. Create an idea bank, accessible
to every individual from the president on down. Besides what it tells
them about the value of thinking creatively, you may in fact find something
well worth pursuing when the economy rebounds. * * * * * * * * * * * * * * * * * * * * Names We Like We're always
on the lookout for creative business or product names. If you know of
any good ones, send them along! You may see them in an upcoming issue!"
* * * * * * * * * * * * * * * * * * * * Innovation Quotation "Creativity,
my students learn, is as natural a function of the mind as breathing
or digestion are natural functions of the body." John Kao, Author
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* * * * * * * * * * * * * * * * * * * The Innovative Edge™ Inc. is a consulting firm based in Massachusetts that helps client organizations tackle tough challenges through creative problem solving. Its president, Jeffrey A. Govendo, works in a broad range of industries as a project consultant, group facilitator, trainer and conference designer, enabling organizations to achieve their goals by increasing their capacity for innovation. Contact
The Innovative Edge at: Copyright © 2003 The Innovative Edge, Inc. The
Innovative Edge, Inc. |
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