Companies Can Turn Lean Times into Big Success: Queen's Expert

Seven in Ten Executives Predict New Products & Services This Year: Queen's Survey

KINGSTON, ON, Aug. 25 /CNW/ - A survey of over 125 working managers and executives completing their Executive MBA at Queen's School of Business in boardroom learning teams across Canada reveals that even during recent uncertain times their organizations plan to introduce new products and services to come in the near future. Specifically, almost seven in 10 (69 per cent) said their organizations have enhancements to existing products or services planned in the next 12 months. The results generally contradict Canada's reputation as a nation ingrained with ultra-conservative business practices - practices that helped weather the economic storm over the last two years, says Barry Cross, an instructor at Queen's School of Business. But, we could definitely be doing more. In many cases, our efforts in innovation are misdirected or compromised through a waste of resources elsewhere.

To support his point, Cross points to another finding of the survey which indicates that six in ten (60 per cent) of the respondents said their customers don't understand or value all of their current offerings. Further, a majority (55 per cent) said their businesses "rarely" or "don't usually" discontinue or shut down an existing service or product when they launch a new service or product. 

"An abundance of old services and products that only a minority of customers are interested in, is like having too many take-out menus in your kitchen junk drawer and never being able to find the right one," said Cross, who teaches Operations Management and Technology. "It confuses our customers and sucks up resources - resources that could be servicing people better or helping in other ways. We get emotionally attached to these existing services; if leadership is afraid of alienating that two per cent of our customer base that still subscribe to the service it's a problem. But as painful as it may be, we need to shut down the old, the stale and the fruit that never fully ripened properly on the vine. Doing so can free up people, cash and other critical resources for further innovation."

The answer, says Cross, is the adoption of "lean innovation" - an approach that seeks to apply resources in a targeted way that can reduce waste and dramatically increase the productive and creative potential across the business. In other words, focus on eliminating that which doesn't add value to customers and increasing that which does.

Lean and Innovation - Odd Bedfellows

As a business becomes leaner, says Cross, enthusiasm is generated, ideas start to surface and new opportunities are realized. Why? Because these opportunities and positive energy were previously buried behind the time and effort required to manage the "stuff" that no one really cared about - the waste.

Cross cites Cirque du Soleil as a great example of an organization that used its resources to develop a product that audiences really wanted - even before they knew they wanted it. Cirque created an entire entertainment segment that didn't exist previously by "leaning out" what people didn't want and developing new ideas that really excited the market. They stripped out the animal acts - which include trainers, vets, food, transportation and that guy with the big shovel behind the elephants (expensive overhead!) - and added a story line, emotion and a unique merger of Chinese acrobats and Montreal street performers. Does Cirque fail sometimes? Sure, like recently in New York. But when they do, they shut it down.

The Queen's MBA survey also revealed:

• Cost and available resources were the two biggest challenges to innovation respondents cited when their business faces competition from other countries (36 and 25 per cent respectively).
• A lack of available resources was once again a top challenge mentioned by respondents when asked to think about impediments to fostering an overall culture of innovation and achieving goals for new products or services. Corporate culture was also a factor for many (19 per cent and 39 per cent respectively).

"The good news is that these challenges are short-term areas that can easily be addressed, versus longer term more complex challenges such as larger scale economic issues," said Cross. "These challenges can actually be a catalyst for the creation of new opportunities. Lean thinking instills a culture we can use as a foundation for innovation in our business."

Tips on Where to Start:

• You have enough resources - Cross recommends applying some basic lean principles to identify the waste and complexity in the organization and free up the people and space you need to pursue the next big thing.
  
  
• Foster a creative culture - Build off the empowerment and enthusiasm generated with Lean.  Balance efficiency with creativity - empower the dreamer with the off-beat, big ideas in your Friday morning meeting.
  
  
• Get to know your audience - One of the easiest ways for innovations to derail is failing to identify the target customer, who may not be your current customer.  Get models, prototypes, simulations and other demonstrations in their hands early and see how they react.

The survey was conducted between June 5 and June 13 with 128 members of the EMBA and AMBA classes at Queen's School of Business located in Toronto, Ottawa, Montreal, Vancouver, Calgary and Edmonton. Survey participants responded to questions via the One Touch technology currently used in the program to allow students to be polled on-demand, communicate with the instructor and "electronically raise their hand."

About Queen's School of Business:
Queen's School of Business (business.queensu.ca) is one of the world's premier business schools - renowned for exceptional programs, outstanding faculty and research, and the quality of its graduates. Canadian executives regard Queen's as Canada's most innovative business school, offering students academic excellence and a superior overall experience. Queen's School of Business - where Canada's first Commerce program was launched in 1919 - is located at Queen's University in Kingston, Ontario. The School also delivers programs at locations across Canada, as well in the U.S. and the United Arab Emirates.

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