Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Many managers make the mistake of believing that innovation is something they can only afford during the good times. They limit their definition of innovation to boosting investment in potentially blockbuster products. To many, that’s a luxury they can not afford when times get tough.
But when I spoke recently to David Silverstein, CEO of Longmont (Colo.) consultancy Breakthrough Management Group, for our recent story on The New Rules, he argued that innovation is more akin to management practices like Six Sigma than many might think.
Why? Because both Six Sigma and innovating are about problem solving. So he encourages executives to innovate in both good times and bad. By using tools of innovation, Silverstein argues, managers will increase efficiencies and find ways to cut costs potentially even more deeply.
Here are some of his thoughts on the differences and similarities for anyone who is interested:
Q: What do you consider innovation?
A: We confuse innovation with creativity versus other ways to problem solve. Ultimately, innovation isn’t just figuring out something better. It about how to do something better by doing something different.
Q: What would be an example of how innovation achieves results similar to Six Sigma but in a different way?
A: I’ll give you a simple one. Take a company that makes paper. The paper has got to be dried out. And the last couple of years the paper industry has been getting killed with high energy costs. The Six Sigma approach to solving this problem is to figure out the optimal temperature of the heaters; the optimum speed for the fan; and how far the fan should be from the paper. But another way to attack the problem is to say, hey, let me use tools of innovation. And look at how they dry things out in other industries. So let’s talk about how the orange juice industry dries out oranges. They use a chemical. And low and behold, once you look, you discover that you can use that chemical to dry paper for one tenth the cost.
Q: Are there any potential advantages to using tools of innovation instead of Six Sigma?
A: Innovation is about finding a solution out of the box. So tools of innovation can help you cut costs even faster and indoctrinate your company into innovative thinking so that when the economy does turnaround you’ll be in a much better position to grow. People will be much more accustomed to looking outside of your industry and your company and thinking differently. It’s taking a much broader perspective of what innovation really means.
How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.