act to a reliable science.
To survive, companies need a durable competitive advantage. No technology, plant, product, or market will ever be that. The only durable competitive advantage is your people and their ideas.
Yes, Innovation Engineering takes its founding principles from Deming, and I am sure Deming would have loved it. I am also quite confident that Juran, Crosby, and Taguchi would approve. The key issue to me is that Innovation Engineering creates a repeatable process that leads to a durable competitive advantage.
—Walter Werner, Deming Master
What Held Back the Application of System Thinking to Innovation?
Applying system thinking to innovation struggled because of a lack of data. In a factory, it’s easy to gather data from production equipment. Innovation is more difficult because it involves “human systems,” which are classically unstable and unmeasured.
To paraphrase Dr. Deming: Much of what matters about innovation has been immeasurable, unknown, and unknowable. The good news is that, today, innovations and the impact of various innovation methods are measurable.
For more than 30 years, client projects at the Eureka! Ranch have served as a “laboratory” for innovation measurement experiments. PhDs and statisticians have run experiments and analyzed data from thousands of real innovation projects. To develop a significant database from idea to creation to eventual marketplace success took a lot of time and patience. Fortunately, the corporations mentioned previously—and others—were willing to participate in experiments and data collection requests over many years.
Statistical analysis of the database enabled us to identify what separates successful from unsuccessful innovations. The analysis also identified principles and methods for helping everyone think smarter, faster, and more creatively.
Thanks to the support of organizations large and small, we have the world’s first and only complete database from idea creation, week by week through development, and all the way to market. It is this quantitative database that makes it possible to apply system thinking to innovation.
The Mission of the Innovation Engineering Movement
The Innovation Engineering movement is a global community of innovation pioneers dedicated to system-driven innovation. Our mission is . . .
To change the world through systems that enable innovation by everyone, everywhere, every day, resulting in increased speed (up to 6x) and decreased risk (up to 80%).
Systems that Enable Innovation by everyone, everywhere, every day is the core of our mission. It’s also the right thing to do.
William Hopper, coauthor of The Puritan Gift, explained to me that enabling employees was the key to the Japanese Miracle: “In 1961 when Sumitomo Electric Industries won the Deming Prize, they did it in a totally different way. Before their victory the winner’s quality efforts were driven by experts. Sumitomo enabled all of the workers to be a part of the process of quality.”
The Deming prize committee in 1961 wrote of the win by Sumitomo:
One of the most important differences between Sumitomo Electric and other companies which have been awarded the Deming Prize is that in Sumitomo people from the top down to foremen worked together. This was an important difference from what happened in previous winning companies and may have contributed much to success.
A newspaper story in Japan on Sumitomo’s success told how they enabled frontline employees:
Foremen were trained to prepare control charts and became fully able to use them themselves. They then changed working methods so that younger workers could make products at a high yield. Before this quality-control method was introduced, only some highly trained technicians, with special skill and experience, could make products at a high yield. Afterwards, foremen were able to change the production method so that high yield was attained.
Sumitomo spent several million yen to introduce the new quality-control procedures, but the profit from them was in the hundreds of millions. The experience of Sumitomo is that if all employees cooperate to improve the method of manufacturing the product, a very high standard can be achieved.
—shared by Kenneth Hopper
As Japanese companies enabled frontline employees, industry gains from Deming’s teachings grew exponentially. Kenneth Hopper created the graph of productivity gains (shown on the following page) for an article he wrote in 1979. Note the dramatic growth in Japan starting in 1961 with the win of the Deming Prize by Sumitomo.
Innovation Engineering is dedicated to the same kind of shift—from innovation being the job of a small group of “gurus” to enabling innovation by everyone, everywhere, every day. The result is a transformation in innovation results.
Increased Innovation Speed: Increased Speed is important if we are to take advantage of the opportunities created by today’s digital and global economy. The good news is that order-of-magnitude increases in speed are possible. Digital tools and modern work systems make it possible to create, validate, manufacture, and make real new products, services, and internal ways of working faster than ever before.
Decreased Innovation Risk: Decreased Risk is important, given the epidemic of innovation failure that exists around the world. Research finds that just 5% to 15% of innovations are successful at large companies. Most business leaders would have greater odds of success if they went to a Las Vegas casino and gambled their innovation investment on one big bet. A slot machine would give them 32% odds of winning, blackjack 45%, and roulette 47%.
It’s easy to realize increased speed by accelerating projects without regards to risks. Similarly, it’s easy to reduce risk by slowing down all innovations and subjecting them to never-ending analysis.
What’s needed is the combination of Increased Speed and Decreased Risk. This can only be accomplished by changing the system of how we think, lead, and work.
Why Call It Innovation Engineering?
The name Innovation Engineering precisely defines our purpose and mindset.
Innovation is about ideas that matter. Creativity is the creation of the new and novel. Innovation is about ideas that make a difference. The difference can be new products/services, how we do our work, or even how we ignite social change in our communities.
Engineering is about applied science. Many books and classes preach the virtues of innovation. Innovation Engineering is different—it details the big-picture leadership principles plus practical and proven “how to” methods for increasing innovation speed and decreasing risk.
We teach theory to provide a background understanding. However, our education programs are primarily focused on how to innovate. We sweat the details. We work and rework each element of innovation until it is reduced to a reliable and reproducible process that can be documented in writing in an operational manual. We tell students to start their innovation efforts by doing exactly what we teach. When they develop confidence in their capability, they then have a responsibility to help the Innovation Engineering community discover and validate even more effective ways to innovate.
An Academic/Industrial Partnership
Early on we decided to create Innovation Engineering in partnership with the University of Maine. They lead the Innovation Engineering movement on college campuses around the world.
Today, Innovation Engineering is recognized as a new field of academic study. It’s offered as an undergraduate minor, a graduate certificate, and as an off-campus executive education program. A PhD program is also in development.
On college and university campuses we educate students