Manufacturing is the backbone of the global economy. If America's manufacturing industry were a separate country, it would be the eighth largest economy in the world, according to the National Association of Manufacturers. But imagine where the economy would be if every manufacturer in the world, large and small, practiced predictable, sustainable innovation with clear-cut return on investment goals. Think of how fast we could get the global economy back on track.
Every major report indicates that innovation is a key focus in 2010, and developing new products, services and processes ranks very high on their corporate agenda. Yet, studies show that for every successful productlaunched, there are 12 failures, a statistic that costs Fortune 1000 companies nearly $60 billion annually in wasted development efforts.
In today's economy, it is critical to implement an innovation process that will allow companies to deliver the right products the first time and not spend on wasteful innovations. It is also imperative for all businesses to establish innovation metrics and a process for significant return on innovation. In fact, most of our customers report high return on investment based on their innovation goals.
How? Well, here are my observations on how companies can become more innovative and help stimulate the economy:
Top-down Commitment. According to a Forrester Research report, 93% of senior business executives cited innovation as a top strategic priority. But just adding innovation to the agenda is not enough. The C-suite must embrace the concept, align corporate objectives and innovation strategy, build the culture, and inspire the employees. Management must promote innovation and invest in tools that build innovation competency. In short, there must be a tight bond between the executive team and other parts of the organization, especially since innovation happens every day, across departments, geographies and responsibilities. Innovation is the glue that bonds people, ranks and tasks, impacting the bottom-line.
Single-minded Vision and Action. Best-in-class companies do not confuse activity with results. Days of generating 3,000 ideas to get to the golden nugget are over. Companies must have clear-cut goals and an innovation platform to streamline, validate and categorize ideas that help them design practical products that meet market demand. And, for small to medium-sized companies, failure is not an option. Ohio-based Manufacturing Advocacy & Growth Network champions manufacturing with an eye toward making the region a global innovation engine. Working closely with local manufacturers and powerful innovation technology, the $9 million organization developed multiple eco-friendly, life-saving products within three years. One of these products is Enviroflush, an antileak toilet valve that saves millions of gallons of water a day. The software platform empowered the engineers with precise innovation intelligence, cut development costs by 65% and accelerated time-to-market by 30%. And, the valve uses 50% less parts than traditional valves, making it a green product.
Continuous, Tangible Measurements. Innovation has traditionally been hard to measure, with people squabbling over what it is, where it exists and how it should be tracked. Whether it is introducing a new product or fixing an existing one, innovation models must be well understood and measured on a regular basis. In an Arthur D. Little survey, 75% of the participating companies had an average or low level of satisfaction with the return on their innovation investment. In today's manufacturing environment, goals must be well defined, ROIs must be tangible and every technology must deliver value to the users. If done right, customers can start showing significant results within 90 days. For example, a multinational oil and gas company saved valuable development time and increased staff productivity by 75% through well-defined goals and activity.
Learning Culture. The best ideas can come from the least expected places. In fact, many successful organizations venture outside their industry comfort zone to learn from the best practices of others. No one organization holds the secret sauce for generating value through innovation. Lessons learned from experiences across diverse vertical markets and regions of the world can bring unique insights that have direct applications. Often our customers leverage technology and concepts from other industries to solve a problem or create a new product. For example, a bedding manufacturer created the anti-snoring bed using concepts from the defense industry. And carpet manufacturer InterfaceFLOR learns from mother nature, their engineering and manufacturing muse, and designs products that meet its green innovation agenda.
Partnering to Succeed. Don't go at it alone. Include other stakeholders and innovators in the process. Use innovation collaboration technology to automatically identify experts who can help with your innovation initiatives, deliver cutting-edge products and sustain innovation. Vendors and business partners can bring the organization to new heights and resellers can help enter new and adjacent markets.
Cost and resource savings, productivity enhancements, market nimbleness and more are the beginnings of measurable investment returns that a sustainable innovation agenda can generate. Businesses that embrace innovation quickly and smartly reap the rewards. With the manufacturing industry's starring role on the global stage, the onus is on each one of us to revitalize the global economy and create jobs via repeatable and sustainable innovation processes.
Mark E. Atkins is CEO, chairman and president of Invention Machine, a provider of innovation software. Atkins has more than 30 years of management experience, building both entrepreneurial and large, established firms in the computer and financial industries.