Monday, June 6, 2016

Innovation is not about Beanbags

In the 1980s, Japan was hailed as an “economic miracle”. There were best-selling books such as Ezra Vogel’s “Japan as Number One: Lessons for America” and SONY President Akio Morita’s “Made in Japan”. American electronic and automobile manufacturers were caught by surprise by the success of Japanese manufacturers.

One thing that became apparent on visits to Japanese factories was that they used impressive manufacturing robots. American manufacturers raced to catch up. They invested in expensive robotics. This was done without looking at any of the less-visible aspects of the Japanese miracle. The investment in robots was an increased expense that did not yield the ultimate competitive benefits in terms of quality or productivity that justified the expense incurred.

I attended a conference in China where one keynote speaker from a large Western multinational corporation described their approach to innovation. We heard about the more than 100 years of history, the thousands of employees and the billions spent on R&D. Then we heard about the big plan for innovation. A team would be given 5 weeks to focus on bringing innovative projects. They would be given beanbags.


Where does that come from? My theory is that it is like the American companies in the 1980s who tried to emulate the Japanese success by using robots. Nowadays, incumbent players are looking in fear and awe at the Silicon Valley startups and seeing beanbags. They think, “if we want to get some of that innovation mojo, we need a few beanbags.”

However, innovation is not about beanbags. Beanbags can be symbolic of a less repressive environment where individualism can be celebrated. Beanbags are also a place to be comfortable when you are working the 18-hour days of the entrepreneurial startup.

Another example

At the same conference, there was a speaker from the Chinese electronics firm Xiaomi. In 5 years, the firm has come from nowhere to become one of the top 5 smartphone handset makers in the world.

Xiaomi doesn’t have customers – it has “fans”. This is not just some cute name. The company has a website where fans can design their own smartphone. The website even says "We want to hear from you."

Boy! Do they listen!

To date, they have had more than 150 million submissions from fans. Some of the more technical fans are even able to build their own mobile operating systems (OS). The result is that there are three times as many fan-designed OS variations as Xiaomi-designed OS.

The Xiaomi story doesn’t mention beanbags.

In fact, for lazy employees, beanbags are just one more excuse to be lazy.

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