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AAM Plant Tour: Don’t Underestimate Incremental Innovation, Says ML Council

Posted By David Brousell, August 15, 2014 at 8:53 AM, in Category: The Innovation Enterprise

The idea of coming up with a breakthrough innovation that can create competitive advantage captivates many companies these days. The success that companies such as Apple, Amazon, and Google have had with market-defining, breakthrough products and services sets the bar and motivates others to go for the biggest prize possible.

AAM2.jpgThat bar is both necessary and useful as an aspiration, and some do manage to grab the brass ring. But the message from members of the Manufacturing Leadership Council, who convened earlier this week to discuss the many dimensions of innovation, as part of a special plant tour at American Axle & Manufacturing’s Three Rivers production facility in Kalamazoo, MI, was that companies shouldn’t overlook what can be gained through incremental improvements in processes and products.

In fact, breakthroughs often don’t happen immediately but are often achieved over time as an initial concept is refined and improved. As a result, breakthrough innovation and incremental innovation can be joined at the hip, so to speak; the former needs the latter process to truly become a game-changing product or service.

“We need both continuous improvement and breakthroughs,” said one Council member from a large U.S. consumer products company. “Breakthrough is what keeps you ahead of the curve. Innovation needs to be something that adds value to stakeholders and customers.”

AAM4.jpgMore than 40 Council members and invited guests met at the 800,000-square foot AAM Three Rivers plant this week to see first-hand how the tier-one automotive supplier manufactures advanced car and truck axles and driveline components. The hour-long plant tour showcased AAM products for the Chrysler Jeep, GM Chevrolet Silverado and the new Chrysler 200 sedan. AAM also discussed one of its own recent innovations – EcoTrac, a “disconnecting” all-wheel drive technology that can reduce vehicle fuel consumption, which, along with lower emissions, is a major market driver in today’s global automotive sector.

Being able to innovate quickly and effectively in reaction to market forces, of course, often depends upon how well organized a company is around the process of innovation itself. The results of a recent exclusive innovation survey (Innovation: Still More Art Than Science), conducted by the Manufacturing Leadership Council and presented at the AAM meeting, revealed a significant disconnect in some companies between innovation intention, and the ability to execute. While a number of Council members at the AAM debate said they felt their companies are well organized internally today, some also noted that the innovation landscape is changing, particularly when it comes to how they engage with customers.

Some Council members said they are using social media, for example, to help identify new customer needs. Others, however, said they have recently scaled back their social media efforts. “A lot of social media for manufacturing is not as interesting as it was some years ago,” said one Council member. “Now, it is so diluted.”

And how do Council members balance innovation with other strategic objectives such as operational excellence? While Council members point out that a company’s strategic focus is necessarily determined by its business model, a number added that various strategic initiatives should not be thought of as being mutually exclusive.

“You have to be good at all of them,” one Council member said.

Being able to successfully innovate also depends on doing a number of things well within the innovation process. Taking a good idea and creating a great new product or service requires great execution. And thinking holistically about the innovation process is mandatory, too. But when asked if they could improve one thing about their companies’ own innovation process, Council members had some interesting advice:

“Kill ‘not invented here’ behavior. Don’t be afraid to fail. Create a culture of empowerment. Train, train, and train some more. And don’t call it innovation; call it product leadership.”

The Manufacturing Leadership Council’s next plant tour and roundtable discussion will be at Campbell Soup’s Pepperidge Farm plant in Denver, PA, on October 16. The topic of the roundtable discussion will be – Next-Generation Leadership: Creating a Culture of Engagement.

Click here to register for the Council’s upcoming Campbell Soup special plant tour and live debate.


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Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council



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David, great article. I would be interested in your perspective on engaging employees to further drive incremental innovation by making their business economics transparent, and empowering the employees to understand and drive improvement. Over the past 20+ years I have seen this common sense approach to business, (often referred to as Open Book Management), consistently improve financial results and the lives of the employees who drive those result in over 350 different companies, from small / medium sized privately held to companies like Southwest Airlines, Capital One, Starbucks and BHP Billiton. Are you familiar with OBM and if so, what is your perspective, as I would think it would complement your thoughts?
If you are interested, more information can be found in these Harvard Business Review articles: http://blogs.hbr.org/2014/06/share-your-financials-to-engage-employees/ http://blogs.hbr.org/2013/12/a-winning-culture-keeps-score/
Alternatively, case studies can be found at www.openbookcoaching.com. If you would like to discuss this, just send a message to me at bill.fotsch@openbookcoaching.com. Best wishes, Bill
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