I interviewed Joel Larner who attended the Business Innovation Conference in Chicago on October 10-12, 2011. Joel Larner is a Vice President of Program Management for Schneider Electric. He currently focuses on their buildings business where they do a lot of buildings infrastructure, and in particular dealing with security. He also spends about 50% or more of his time helping to build a culture of innovation to expand the innovative products that the company offers for new markets.
Supply Chain Innovation
Innovation is vital for the future survival of any company. It used to be that you could develop products at a reasonably pace. If you had new ideas you could be competitive in new markets. Today, the pace of change has grown so fast that if you just keep doing what have done with incremental innovation, you will become a dinosaur.
It doesn’t matter what topic of discipline you are operating in; whether it is Research & Development or Supply Chain, the case will be the same. In the case of Schneider Electric and the Pelco brand within Schneider Electric, they are very vertically integrated. Everything that they do in product development basically goes through the manufacturing and industrialization processes in their facilities in California. It goes through their logistics centers in Chino California, as well as other logistics centers worldwide. While they are being innovative in their R&D space, they also need to be equally innovative in the supply chain world to match those new technologies and products.
You can’t keep bringing out new products, technologies or solutions and deliver them through the same logistics done in the past. There may be new markets requiring new logistics. There may be new parts and components. You also need to be driving supply chain efficiency for cost efficiencies. As much as they focus on innovation in the R&D space they need an equal amount of innovation in the supply chain space to be competitive there.
What is incremental innovation?
Incremental innovation is taking products, solutions and technologies which you currently have today and doing some small advancement on the same technologies or solutions. You will often see this referred to as ‘little I” in the innovation world. You need some amount of incremental innovation and some amount of radical innovation, or ‘big I’. Typically, in an organization you are looking at perhaps ¾ little I and ¼ big I. You can’t be all big I. You will be taking way too much risk and getting very little return for it. Schneider will done some incremental innovation, but will also be looking at how to radically change some of the things they do, whether in a Research & Development/Product Development space or in a Supply Chain arena.
Influence of Culture on Innovation
Culture is huge. It defines where people feel comfortable and not comfortable innovating. For example, if someone comes up with a new idea and they walk out into a hallway and mention it to some of their colleagues: if their colleagues get excited about it what ends up happening is that more discussions take place. The idea grows very quickly. New people bring in new pieces. Within 5 to 15 minutes of discussion the idea has blossomed. This is a positive culture of innovation.
Conversely, if your culture is totally focused on delivery the reaction of your colleagues may be “why are you wasting my time?”, “what a stupid idea!”. You can’t expect that this individual will ever raise another idea because they got their head chopped off. The person was just told what behavior is permissible and which behavior is not.
This is just one example of many where culture plays a huge part in whether innovation takes place, or whether it is stifled in your organization.
Organizational structure and its impact on innovation
Organizational structure has a huge impact on innovation. Innovation occurs at intersections. You need individuals with many different thoughts coming into an idea to really make it blossom. If you have an organizational structure which limits this cross functional discussion you have lost the huge value an opportunity to have those intersections occur. If it is always a homogeneous conversation you will get limited growth in your ideas.
Instead, if someone brings out an idea and you have an individual from Product Development, Customer Support, Global Supply Chain, and Logistics; each tossing the idea around and bringing different viewpoints into the discussion. In the end what you get is a new idea which meets needs in many of these different areas. Ultimately, you will get a much more innovative solution.
Recommendations for those in large non-innovating firms
This is a real challenge. In large firms you have very ingrained ways of doing work, which goes back to culture. The single largest thing Joel recommends is to get leadership support from the very top and all the way through the organization. People respond to what the organization values. They see what is valued by the behaviors around them and by the behaviors of leadership; what is recognized, rewarded and acknowledged. Upper leadership should be supportive of innovation and recognize and reward. Rewards do not necessarily have to be with money, but recognition.
Recognition includes acknowledging the great work that someone has done. It signals to the organization what is important in the organization. That is critical.
Often in large companies they are so focused on the top line that the bottom line where the turning of the crank of innovation is stifled. You need to change the expectations at the upper management level and the desires at the upper management level so that they are delivering an expectation of innovation in the organization.
About Joel Larner
Vice President , Program Management
Pelco by Schneider Electric