How To Keep The Idea Pot Bubblingby
How Innovation and
Improvement Actually Happen
By Alan G. Robinson and Sam Stern
Berrett-Koehler 277pp $29.95
THE INDIVIDUALIZED CORPORATION
A Fundamentally New Approach
By Sumantra Ghoshal and Christopher A. Bartlett
HarperBusiness 353pp $26
It was the kind of miscue that gets people fired. In 1980, a scientist at Snow Brands Milk Products, a Japanese dairy company, was fooling around with hot wires, testing the conductivity of milk--an experiment that had nothing to do with his job. One day, he forgot to turn off the electricity. Hours later he returned to it and found the milk had curdled.
Many workers in this situation would clean up the mess in a hurry, maybe flush the curds down the toilet, and thank heaven the supervisor hadn't noticed. But Tomoshige Hori studied the temperature graph and noticed an abrupt variation--one that apparently coincided with the curdling. This led Hori, over the next several years, to develop a technology to automate cheese production. The process was adopted by his company, and it spread around the world.
Was Hori's breakthrough simply a matter of luck for Snow Brands? Or was there something about the company, perhaps a sense of freedom and an openness to exploration, that led to the discovery? This is the question that Alan G. Robinson, a management professor at the University of Massachusetts, and Sam Stern, who teaches education at Oregon State University, grapple with in Corporate Creativity. Another book, The Individualized Corporation, by London Business School professor Sumantra Ghoshal and Harvard business school professor Christopher A. Bartlett, plows much of the same ground.
In Corporate Creativity, Robinson and Stern argue persuasively that great ideas, more than anything else, fuel corporate growth. Of course, it would be no trouble to harvest such ideas if they surfaced at executive meetings. But most of them, the authors note, crop up far from headquarters. The book brims with anecdotes about baggage handlers and part-time accountants whose ideas save companies millions, even hundreds of millions of dollars. So here's the twin challenge facing executives: Fire up your companywide brainpower to hatch ideas and make sure the ideas reach the people who can implement them.
Trouble is, to summon forth this gusher of brainwaves, most companies must undergo a cultural revolution. They need workers who go home at night pondering how to do their jobs better and managers who are all too happy to accept ideas challenging the status quo. This is the vision CEOs often preach to yawning underlings at corporate retreats. But neither these CEOs nor Corporate Creativity's authors have come up with a formula for turning companies into prodigious idea factories.
Still, Corporate Creativity is worth reading for its fascinating trek through the history of idea-hunting. For example, it takes us back to the imperious John Patterson, founder of National Cash Register Corp., who in 1894 moved his desk down to the dingy and dangerous shop floor and soon understood why his workers were so dispirited. Patterson quickly had the factory cleaned and painted, and many of the walls replaced with glass. Then he instituted a reward program to pay workers for their ideas. He would turn the company, he vowed, into a "hundred-headed brain." Backed by this idea system, NCR catapulted briefly to the forefront of Corporate America. However, Patterson's system, like the many imitators it spawned, merely worked to perfect the status quo. It did little to launch NCR toward bold changes and new businesses. In time, the ideas petered out.
No such slippage would be tolerated in the authoritarian idea mills of the Soviet Union, site of "the most ambitious effort in history to promote creativity," the authors say. There, central planners dating back to Lenin's day established rigid idea quotas. And, as Robinson and Stern show, responses were comical, tragic, and sometimes both. The authors describe an interview in the early 1990s, during which a worker explained how he and his colleagues came up with dozens of ideas every day. Holding aloft a piece of paper, which he said represented one idea, he folded it in half. "Two ideas, da?" Then, he folded it again. "Four ideas, da?" His point as he kept folding the paper was that they simply duplicated the same suggestions over and over. Another Russian worker suggested disabling the cumbersome safety device on a stamping machine he operated. The management enthusiastically agreed. And a few months later, the revamped machine chopped off that same worker's hand.
Moving on to consider the results at modern American corporations, the authors level shots at a few demigods in the idea pantheon. They describe the great successes at American Airlines Inc., where CEO Robert L. Crandall's suggestion program, IdeAAs in Action, has saved tens of millions of dollars. But Crandall's scheme, like NCR's, is focused on improving current practices, not on creating new ones. The danger is that the more a company refines its current system, the less likely it is to consider sweeping changes. The authors call it "creativity through the rearview mirror." Nor do they approve of 3M's rigid numerical targets for new-product development. This focus, they say, discourages researchers from improving existing products--a process that can also lead to breakthroughs. They note that 3M, recognizing this, has recently relaxed its quotas.
So what's the answer? There needs to be an excitement about work that produces all kinds of ideas, independent of rewards and quotas. These conditions, the authors stress, can exist in all sorts of workplaces, even in government. In another example, Corporate Creativity's authors tell the story of a bureaucrat working part-time for the Massachusetts state government. This was not someone who ordinarily would be invited to join a governor's blue-ribbon panel on medical-insurance reform. Yet she happened to know the Medicaid process inside out, and she came up with an idea--which, it should be noted, shifted costs from the state to Uncle Sam--and eventually saved Massachusetts some $1.4 billion. The savings greatly helped to balance the state budget. To produce insights like this, the authors note, employees must not only be given free rein to think and plenty of information. They also require managers who'll push the ideas to the top.
In The Individualized Corporation, authors Ghoshal and Bartlett detail a classic case of corporate sclerosis at Westinghouse Electric Corp. and contrast it with more successful approaches at such places as ABB Asea Brown Boveri, Intel, and General Electric. Like scores of other business books, including Corporate Creativity, The Individualized Corporation argues that top managers should break down the hierarchy and free their troops to make their own decisions. No surprise there. The book features loads of business jargon--"As important as the various informal structural overlays were in creating new integrative channels and forums, [CEO John F.] Welch recognized that unless he could change GE's slow-moving bureaucratic culture, the cross-unit processes he had framed would never become effective," we're told. This, along with incomprehensible flow charts, make it a very rough read.
Both these books are likely to wind up on reading lists for various corporate retreats in the coming year. Corporate Creativity is by far the better choice. But a warning to executives considering assigning the book: Robinson and Stern paint a beguiling picture of what an open-minded, creative workplace could be. Some employees, unmoved by the usual exhortations, may be tempted to pick up and search for a place where their ideas can make a difference.