Ted Garrison's March 2014 Report

Ted Garrison's March 2014 Report

Innovation is a Key to Competing on Value

Innovation is one of the 10 principles of Construction 3.0 Strategies™ because it's critical to the success of any contractor. It's also an integral part of the key practices that are improving the construction industry—namely, blue ocean contracting, integrated project delivery, and LEAN construction. The fourth, value-based contracting is about identifying people that have an open mind to innovation through continuous improvement. But why is innovation so important?

In today's hypercompetitive marketplace, contractors can consistently differentiate themselves from their competitors only through continuous innovation designed to deliver superior value to their clients. As Tom Peters said, “Tomorrow’s victories will go to the masters of innovation! Period!”

If companies want to increase their innovation, they need to avoid thinking of innovation as an event. When companies or individuals think of innovation as an event, they tend to focus on large, game-changing ideas to justify the attention and cost of the effort. While large innovations can have a great impact, unless they are constantly updated, they tend to lose their effect over time. Then one day the original innovator discovers he has been overshadowed by a competitor with newer and better ideas.

A better solution is to develop a system that produces continuous improvement or innovation, often referred to as kaizen. If you think small improvements are not worth the effort, think again. If you can save just 30 seconds a day and compound that every day, in less than three years, you would double your productivity. In reality, most organizations would be better off focusing on small innovations instead of looking for major changes.

Another advantage of small, continuous improvements is they are typically inexpensive and relatively easy to implement. Even if the innovation does not work out, the cost of attempting the change is negligible. In contrast, attempting to implement major innovations can be costly and time consuming, and often the resistance to such major change can destroy the potential of the innovation.

Further, when the emphasis is on small enhancements, the number and quality of suggestions improves because everyone can participate in the process. Alan G. Robinson and Sam Stern reveal some interesting facts about innovation in their book, Corporate Creativity. First, their research found that award-winning innovations are more likely to come from non-management personnel. They also found that ideas that came from non-management personnel had a greater impact than the ideas from the management.

Talent is often wasted as companies tend to not use it to its fullest potential. Companies often defend that position by reporting that their people are not engaged or willing to take initiative. Unfortunately, this a case of the chicken and the egg. Since the company does not respect the worker's potential, the worker does not show his potential. However, when the workforce is engaged, amazing results can occur, as Robinson and Stern pointed out.

One challenge facing continuous improvement efforts is been the pass/failure rate, but these failures have often been caused more by the approach than the concept. For example, management wants to increase productivity, so they meet with the workers.

What management says: "We need to improve productivity to remain competitive in today's tough marketplace. Do you have any ideas on how we can increase productivity?"

What the workers hear: “You aren’t working hard enough. We want to make more money, and you have to come up with ideas to help us get it.

In the end, the workers just shrug their shoulders to indicate they do not have any ideas. Management concludes they do not care. Instead, another approach might work.

What if management started the meeting with this? "We know you are all busting your butts, but we need your help fixing a problem. We need you tell us what management is doing that drives you crazy and keeps you from doing your job." What a difference a little change in approach can make! Unfortunately, there will still be some initial resistance from the workers to even this approach because they are skeptical that management wants to accept their ideas. However, when management demonstrates they not only want to hear the workers ideas but also encourage them to make the changes, it suddenly opens the door.

One of the reasons this approach works is because it taps into what motivates the worker. Numerous studies reveal the two biggest worker motivators are appreciation and being in on things. How much more can the worker be in on something than to implement his own ideas? And there is no greater way to demonstrate your appreciation of the worker than to ask his opinion then let him implement it.

This report is not an attempt to bash management. It is not that management does not have good ideas. It is not that management is not smart. It is merely a reflection of the fact that, in many situations, the worker has an advantage—namely; he is in the middle of the problem and understands it a lot better than those more removed. The worker knows what he can do to fix something, so the workers suggest things they know will work.

When companies tap their in-house creativity to solve not only their internal problems but also those of their clients, they pave the way for greater profitability.

* * * * * THE END * * * * *

Ted Garrison; president of Garrison Associates, is a catalyst for change. As a consultant, author and speaker; delivers his Construction 3.0 Strategies that offer breakthrough solutions for the construction industry by focusing on critical issues in leadership, project management, strategic thinking, strategic alliances and marketing. Contact Ted at 800-861-0874 or Ted@TedGarrison.com. Further information can be found at www.TedGarrison.com.