"Get creative!" (Special Report, Aug. 1) does an excellent job of describing advances at one end of the value chain: the original equipment manufacturer (OEM) and its customers. Unfortunately, it ignores the other end: the firm's supply base. In our study of supply chain innovation, we found that only a small percentage of companies recognized their suppliers as a source of innovation, and even fewer bothered to measure their value. What's most perplexing about this myopia is that the innovation derived from the supply chain is typically the least costly and least risky investment, and often the fastest to market.
Those few companies that did use their supply chain as a source of innovation were market leaders. Procter & Gamble Co. (PG) is aiming to gain 50% of its innovation from outside its castle walls, much from its suppliers. Toyota Motor Corp. (TM) gets more than half of its innovations from its supply base. Cisco Systems Inc. (CSCO) joins forces with other suppliers to provide innovative solutions to Internet customers.
David N. Burt
Supply Chain Management Institute
University of San Diego
Robert Porter Lynch, CEO
Editor's note: Writer Lynch is chairman emeritus of the Association of Strategic Alliance Professionals.
You state: "Marketing has too few tools for ferreting out the unarticulated needs of consumers." I wholeheartedly agree. At IBM (IBM), we used creative workshops with customers to empower them to express their latent wants and needs. These brainstorming sessions were not aimed at finding solutions but rather at identifying challenges for us to improve our delivery of innovative products and services that met customer needs and raised our market acceptance rate. They also prevented us from making some marketing investment mistakes.
Robert W. Burian
Everyone in our company read "Get Creative!" It was a thought-provoking article and led to reflections on how many of these ideas may have been spawned by Tom Peters. For example, in 1995, Peters was ranting about how "Innovation is everything!" In 2000, he restated it as "Design is everything." The five steps on the evolution of the creative company are succinctly covered in his recent book, Re-imagine! Cirque du Soleil is a "wow" experience...a description right out of Peters' book, The Pursuit of Wow! The only way to effect true innovation is for it to be on the agenda of every meeting, in every single department, in every division, and in the boardroom.
If Peters didn't spawn it, he certainly fueled it with his technicolor definitions of "excellence." As you so well highlighted, innovation is the differentiating factor, and companies that ignore the power of elegant and functional innovation will lose.
Juli Ann Reynolds
President & CEO
Tom Peters Co.
While it is true that the innovation-to-imitation cycle has shrunk to zero and globalization might as well be called commoditization, you can't adopt an innovation-led strategy for one part of the world -- the West -- and a different strategy (e.g., pushing products) for another part of the world -- India or China -- especially when the majority of your future customers reside there.
First, if you adopt a split strategy (one for the West and another for India), you're going to alienate your customers in India (or China). Indians don't want to be treated as second-rate consumers in their own country, especially by a foreign multinational. Second, if you take the innovation-led paradigm to India, consumers will love it, but competitors (domestic Indian firms) won't let you steal their customers. They will lift up their game by using the bar you have set.
Indians might not know how to innovate for the Western customer, but they know how to do it in their own backyard. When someone attacks your livelihood, people become amazingly innovative.
I applaud the trend toward better design and creative problem solving being embraced at large companies. But most of it is still focused on the short-term "next big thing" consumable product with little regard for environmental impact. If global corporations are excited by the prospects of marketing to 3 billion more people in fast-growing developing countries, they had better get serious about cradle-to-cradle product design or the entire planet will soon be buried under a pile of its own wasteful "innovation."