How lean can Lean Innovation really be?

You may have heard the Lean Management story about a lumberjack sawing a tree with a blunt saw. The core of this story is that you have to improve your efficiency in order to be effective as a company. So in other words, the lumberjack has to stop doing his job for a moment somehow and sharpen the saw – and that allows him to be more efficient afterwards.

But let us change the perspective and imagine another scenario where a true innovator would meet a lumberjack who is struggling to cut a tree down. For the innovator the market potential is obvious, so he would leave the scene and come back after months of intensive creation and invention. Then he would present the perfect solution to this problem – from his point of view.

In many industries we have seen for decades that both approaches actually work – but both of them are quite risky as well. By continuously improving an existing solution, the product or service is getting better and better, but at the same time it is getting undermined by a potential disruption (eg. Kodak, Xerox, Olivetti, and many more brands that disappeared). By inventing a new product or service far away in an ivory tower in some sense, you might hit the bull’s eye occasionally – or more likely, lose a lot in the process.

Lean Innovation, Design Thinking and being agile:
A very similar core

Today you will find many answers how to combine these evolutionary approaches with revolutionary ones. The number of different methods seems endless, you could fill libraries with all literature available regarding this topic – and most of the time, reading about them has something to offer. However, the common denominator of many methods is the so-called double loop learning. Here you are not only asking yourself “What do we have to do differently?”, but also “How do we think differently?”.

But still, the question is: Why are there new products and services appearing on the market that are not being accepted by a broader public or simply by the target group? 

At smec we have three main assumptions for this phenomenon:

• There is not a single universal solution for every institution.
• Reducing risks is not equal to completely eliminating them.
• In a constantly – and increasingly fast – changing world, double loop learning is not sufficient anymore.

Please note that we do not presume to already have perfect answers to these questions, but we would like to give you some insights how we approach them.

Triple loop learning:
A methods stew

smec has four epic core values defining the corporate culture: Excellence, Passion, Integrity, and Cleverness. Furthermore, there is a strategic goal to reach excellence in innovation and execution.

Combined with our three assumptions mentioned above, the path to our new innovation process was rather obvious right from the start. But we would have to ask ourselves a third question as well, which completes the so-called triple loop learning approach. And that is: “How do we have to change?”.

In other words, we are currently in the process of transforming into an ambidextrous organization that is able to fulfill our strategic goal. Therefore, we built structures enabling us to test new innovation initiatives rather fast, but at the same time they are not interfering with our operating unit. Furthermore, we have defined roles allowing us to focus on the three main topics in innovation: customers, technology and processes. And we have created a new stage gate process that follows lean principles and is fully transparent for all employees. After screening for available methods regarding the suitability for our innovation process, we combined the ones fitting best to our company and moreover, to our culture and strategy.

But – and this is crucial – we have institutionalised the process so that we can constantly question the approach itself including the innovation process and all methods used. Overall, the three perspectives we now focus on are transparency, participation, and simplicity.

Therefore, you may ask yourself why we chose these perspectives, but the reasons are rather simple: 

• If you are fully transparent, you and others will easily find wrong turns and dead ends. In other words, as it is not possible to hide something, you can be proud of learning something after failing that you can share proactively. 
• If you integrate people with different backgrounds, different roles and different mindsets into your innovation initiative, you most probably will not stick to your first idea. Furthermore, it is good for all of us to break out of our daily routine from time to time to bring in our experience, our knowledge, and – yes, exactly – our creativity.
• If something is too complex, it will not be used the way you thought it would be. You could end up using all your resources but fail to have a meaningful impact. Therefore we are constantly trying to reduce the complexity of all methods used and get rid of tools or process steps that are not really that helpful.

By doing so, we are trying to achieve a situation where the innovator can focus his time and energy entirely on the innovation initiative – and not on handling the complexity of the innovation process.

The lean approach towards a lean process

Within the first three months our management board approved our new innovation process. Since then, we have already pitched 18 different innovation ideas. Furthermore, as you know how a good stage gate process should look like, some of the ideas have already been stopped for the moment. Throughout our first three innovation sprints (culminating in our monthly Innovation Council), we have constantly improved the templates, usage of methods, workshops, meetings, and so on. 

Although we are quite satisfied with the results produced by the process, we have also learned that there are some major issues we need to improve as well. Therefore, at the end of August, we decided to redesign and adjust our innovation process and within two weeks, we were able to restructure it.

As a result, we are following a lean principle here as well – if something is not working in the process within the first six weeks after the kick-off, we just change it. Needless to say, this will not be the last change. 

But for now, let us come back to the lumberjack one more time. What if smec would meet him in the woods right now? Well, most probably we would enable the lumberjack to sell all the wood and its related products online. And after some time of closely working together, who knows what kind of awesome ideas will pop up? For sure, they will.

As a matter of fact, reaching excellence in innovation is nothing that can be done without constantly learning, improving and accepting the failures of the past – followed by changing for the better in the future as well.