Organizations all too often decide first what their business strategy to create value will be. That is, what markets they will focus on and what products they will make. And only after that, they seek for the innovation to support it. But, it should be exactly the other way round.
To decide on the right goals and strategies and to be sure of how to understand what customer value means as well as the innovation needed to create it must be at the heart of the business. It must be fundamental to the work of the Steering Committee and of every leader-manager, functional leader and CEO. In fact, the CEO must also be the CIO, Chief Innovation Officer.
In this regard, having helped our clients for more than 15 years – both to innovate in the design of new products and services, and to redefine services in various sectors – has made us learn a fundamental lesson:
Value only has value when it is valued by the client.“
Following that experience and conviction, we have developed methodologies based on Design Thinking, Lean and other disciplines. All of them focus on understanding the needs of people (customers) by giving them technologically feasible answers. And they use both the sensitivity and methods of designers and creators as well as the experience of the craftsmen of value.
As we learned from the management philosophy Lean, innovation must be focused on people; in understanding what they want and need through direct interaction in the Gemba, «the actual place» where things happen.
Currently, many organizations are striving to improve, change, transform and innovate. These activities are based on the assumption that the managers and teams leading these innovation and improvement activities have previously assessed and understood where the value lies for the customer.
However, experience tells us that this assumption is, in most cases, far from reality. We have seen many companies improving processes and innovating products, and very few understanding if and how these processes and products meet the real needs of their customers.
Their mistake is always the same: they fail to comprehend what is the value that makes those they work for happy.
The «exponentiality» of modern-day change is unprecedented. On the one hand, it creates as many opportunities as, on the other hand, constant threats of obsolescence. In these exponential times, the only way to succeed is through innovation. However, innovation is often delegated to technical experts or left to the mercy of divine inspiration.
Undoubtedly, lonely geniuses working in their ivory towers have established new industries or revolutionized existing ones, but we do have a problem with that paradigm. Expecting someone to turn on the light bulb is no longer an option. Today, we have a light bulb in the head of every consumer.
This is to understand innovation not as something delegated to the research and development department but as the central foundation stone for the management and value creation of the company, where the customer is at the centre of everything.
What we learned early on from Agile High-Performance Organizations is that all decision making should be based on data and facts – where they will have their impact. And never on opinions or assumptions of what we think actually is or should to be, in an office far out of touch with realities and impacts of decisions, which will never create any value.
Decisions made on assumptions in a swivel chair at your desk are like a lottery. In today’s VUCA environment, there is a big issue when you realize that the number you had chosen was not drawn. You may have doomed your organization; maybe forever.
In High-Performance Organizations, lotteries are by no means an option. So Genchi Genbutsu is one of the non-negotiable management principles to deal with the volatility, uncertainty, complexity and ambiguity of the environment in which each of our organizations has to compete.
Innovating demands to «go and see on site».
Going to the source, to the Gemba, as many times as necessary to observe and understand, to make decisions based on the actual needs of our customers by fully comprehending the capabilities of our teams and organization to deliver value.
Only with this deep knowledge of what value means, you can design your products, services, processes and organization, to turn it into reality.
And now, it’s time for action: See you at the Gemba!