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May 5, 2014

Are You Procuring Innovative Management?

Posted by Puneet Gupta (View Profile | View All Posts) at 12:13 PM

Banking and Media - Cross Industry Innovation - Telstra Enterprise [Source: http://www.youtube.com/watch?v=xp3hYTR-qKI]

I can't say that I'm the biggest fan of fast food. But I am a fan of the business processes and operational excellence that some fast food chains employ in order to get a meal in front of a customer in just a matter of minutes. I've also been impressed by the innovative culture of fast food restaurants. At first glance this statement sounds a bit odd - I mean, how innovative do you have to be to fry up a hamburger?

Well, consider this story: In the mid 1970s, McDonald's got word that one of its franchisees had placed a poached egg, a slice of cheese, and some Canadian bacon in the middle of a toasted an English muffin. He called the sandwich the "Egg McMuffin" and it was (excuse the pun) selling like hotcakes. The restaurant manager had wanted something to sell during the late morning, when people were coming in to buy coffee but it was still too early to be ordering hamburgers and fries. The executives at corporate headquarters were impressed by this new sandwich and gave it their mark of approval. Soon, every McDonald's around the world was selling this new sandwich and it helped the chain expand into the lucrative breakfast timeslot.

The take-away here is that despite the impressive corporate test kitchens and executive chefs that McDonald's has at the corporate level, this successful menu item came form a franchisee in the field. Someone who had most likely never visited corporate headquarters. It was a sign that despite the size of the global company, anyone - even a local franchisee - could innovate and create the next big thing for the company.

To me, that's something all organizations should aim for. We should sustain corporate cultures that encourage innovation and - perhaps more importantly - shepherd the best innovations to the forefront. Yet, doing so creates a bit of a conundrum for business leaders. That is, how do we identify and borrow best innovative practices from other organizations? If you're the head of a technology company, can you imitate a culture in which an employee in the field can feel empowered to develop innovations that might have the same kind of transformative power over your company that the Egg McMuffin did for McDonald's? Which ideas should you borrow from other companies and how?

There are two ways to acquire promising practices from other firms. The first is common enough - observe and apply. The second is to extract a management practice's underlying logic.

One example that has been met with a degree of success over the past few years has involved agile development. Indeed, agile development isn't exclusive to the realm of software anymore. Many different industries have discovered the advantages of testing early and often. It is not uncommon for apparel companies, today, to employ the principles of agile development to how they stock their retail stores and stay on top of ever-evolving fashion trends. Many chains are shortened their supply chain response to fashion trends to two months from an industry standard five to seven months.

Whether it's fast food or clothing, there are a lot of best management practices that can be learned if we open our enterprises up to them. I'm not suggesting that you indiscriminately pull practices into your firm. I am recommending being receptive to how others put innovation into practice. That's because a commitment to a robust innovation journey transcends industry and sector.

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