The Deliberate Innovation Strategy

The strategic choice view argues that if an incumbent is not the first to introduce an innovation, it may not be because it has no incentive to invest, its competence has been destroyed, it has not recognized the potential of the innovation, it does not have the complementary assets, it did not use the right adoption mechanism, or it is an environment that is not conducive to innovation. It may be because of the firm’s innovation strategy—its goals, timing, actions, and resource allocation in using new knowledge to offer new products or services. By making the right choices early, a firm can build the right competences and complementary assets, or even shape the kind of environment in which it is going to operate.

There are several innovation strategies: offensive, defensive, imitative, dependent, traditional, and optimistic. A firm with an offensive strategy is the first to introduce new products. If the strategy is to be the first to innovate, it will invest in the innovation and build the capabilities to do so.  In a defensive innovation strategy, a firm waits for a competitor with an offensive strategy to introduce a product first and resolve some of the uncertainties confronting the innovation. The defensive firm then introduces its own product, correcting any mistakes that pioneers may have made.

Firms pursuing a defensive strategy normally have very strong complementary assets—capabilities such as marketing, manufacturing, distribution channels, and reputation which allow a firm to commercialize an invention—and when they decide to move, they do so very quickly. They usually have a strong R&D since it takes knowledge to absorb knowledge. The product is not an imitation of the pioneer’s version but rather a differentiated product, often with better features and lower cost. The firm, in effect, catches up with or leapfrogs the pioneer. Thus not being the first to introduce an innovation may not be a sign of a lack of incentive to invest, competence destruction, absence of appropriate complementary assets, inappropriate adoption mechanism, or being in the wrong environment. It may be because the firm in question has a defensive strategy.

While a firm with a defensive strategy would like to differentiate its products, one with an imitative strategy would like to produce a clone of the pioneer’s product. It has very little attention of catching up with or leapfrogging the pioneer. It usually has such low-cost capabilities as lower labor costs, access to raw materials, and strong manufacturing. In the dependent strategy the firm accepts a subordinate role to a stronger firm. It imitates product changes only when requested by the customer or superior. Many large Japanese firms have these satellite firms. The traditional strategy makes very few changes to products, only striving to offer the lowest cost possible. In the opportunistic strategy the firm looks for some unique needs of a market segment that are not being met—it looks for a niche market. The point in all these other strategies is that a firm’s failure to introduce a product first can be due to its deliberate strategy.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, and my Lectures.

Japan’s Manufacturing Techniques

Nations are built not with bricks and stones but with the capacity to create and apply knowledge. The result of knowledge creation and application in manufacturing and management practices is well demonstrated by Japan. Today we are witness to many industrialized economies that are strengthening their manufacturing activities simply by adopting these techniques.

The distinguishing characteristics associated with Japanese manufacturing techniques include an emphasis on designing and redesigning processes to optimize efficiency and a strong commitment to quality.

The manufacturing techniques that Japanese companies practice provide a competitive advantage and outstanding economic performance. The key for success is an understanding of the broad context of manufacturing culture, infrastructure and environment. These sound manufacturing and business techniques created and adopted by leading Japanese manufacturers have turned out to be the secret of their market leadership in many industries.

Following are a few of these concepts, which can help in managing any business set-up in a better way:

  • Kaizen is one such technique, which in Japanese means ‘improve.’ This is commonly recognized as practices focusing on continuous improvement in manufacturing activities, business activities in general, and even life in general, depending on interpretation and usage. By improving standardized activities and processes, Kaizen helps in eliminating waste.
  • Another management Japanese technique is the 5-S. It is a technique used to establish and maintain quality environment in an organization. It has five elements: Seiri (sorting out useful and frequently used materials and tools from unwanted and rarely used things); Seiton (keeping things in the right place systematically so that searching or movement time is minimized); Seiso (keeping everything around you clean and in a neat manner); Seiketsu (standardizing the above principles in everyday life) and Shitsuke (inculcating good habits and practicing them continuously). The 5-S practice helps everyone in the organization to live a better life.
  • Kanban and ‘Just in Time’ are two other practices in inventory management practices that were pioneered by the Japanese automobile manufacturers, such as Toyota. Quality improvement, on the other hand, is the result of lower proportion of component scrap since the components spend less time in the supply chain.
  • Poka-yoke is a process improvement focused on training of workers for mastering the increasingly complicated tasks to selectively redesign the tasks so they could be more easily and reliably mastered. It involves designing a foolproof process to eliminate the chance of errors.
  • Jidoka is a practice by means of which an individual worker runs several machines simultaneously. Japan thus designs such machines that eliminate both error and the need for constant supervision.
  • Muda is another technique that reduces wasteful activity in service processes. It ensures process efficiency and effectiveness.
  • Mura curiously combines rigidity and flexibility and thus teaches service process improvement.
  • Reducing Muri means reducing physical strain. In services process improvement, Muri applies to convoluted and unnecessary routings, physical transfer, and distances paper files may have to travel for a process to complete.
  • Genchi Gembutsu means going to the actual scene (genchi) and confirming the actual scene (gembutsu). Observation of service processes at the point where it is actually delivered may unearth a host of problems such as lack of training, unnecessary steps, or a number of other areas that would benefit from small but significant process improvement ideas.

This is a glimpse of manufacturing techniques that Japan has so intellectually created and so profoundly practiced in its manufacturing systems that even with no natural resources, it has acquired the status of one of the most industrialized nations. Can we learn from Japan?

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Lectures, Line of Sight.

Change when you don’t have to

Most organizations don’t change until they have to. They wait until things are going poorly and then desperately try to find a quick fix, changing strategies, products, services—anything to try to catch up. The problem is that you don’t think clearly with a gun at your head. The poor decision making, lack of innovation, and low morale characteristic of organizations playing catch-up create a vicious cycle that keeps them significantly behind.

Innovative thinking and the resulting quality and service so necessary today don’t come from a struggling organization that’s “gotta” make some changes fast to keep its head above water.

The best time to change is when you don’t have to. Initiating change when you are out front will keep you there. Contrary to conventional wisdom, the best time for pioneering and innovation is when you are on top. Confidence is high.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit, Line of Sight