Samsung started as a trader of fruit, vegetables and fish that transformed itself into a leading player in construction, shipbuilding, financial services, electronics and consumer appliances. It is now building the largest ship ever made.
The chairman of the Samsung Group, Lee Kun-Hee, told his employees with tongue in cheek: “Change everything, except your wife and children.” According to The Wall Street Journal, he met with his senior management team in 1993 and gave them the challenge to change just about everything in the company.
Kun-Hee’s strategy has succeeded as Samsung has ridden the waves of technology leadership to become the world’s largest electronics producer, with 200 subsidiaries and $269 billion in revenues for 2013. It ranks only second to Apple, and even ahead of Google, as the most innovative company in the world.
Because of the rate of technological change, your company has probably had to react just to stay competitive. Is it possible to get ahead of the curve?
If innovation requires change, how do you manage it? More importantly, where do you begin? Let’s look at a local success story.
Stephen Ziegler was an entrepreneur in his own right, having started an accounting firm and scaled to a real success story.
InPro, a Muskego-based company that makes interior and exterior architectural building products for health care, hospitality and educational facilities, was struggling financially. Limping along with revenues of just more than $10 million, the sale price was right, so Ziegler decided to buy the company and see if he could make a go of it.
Today, it is one of Wisconsin’s fastest growing companies, with revenues of more than $100 million and revenue growth of 8 to 9 percent every year. InPro continues to add plant capacity and employees. What happened to turn it around?
Ziegler asked this question: If you own a home, you know that every year there are certain projects you need to do to maintain it or improve it. What should you do? Wouldn’t you develop a game plan that identified what needed to be done? Wouldn’t you then budget for those changes?
That is precisely the basic game plan he installed at InPro. Every year, the company developed a list of critical goals and action plans necessary to accomplish those stated goals. Most importantly, they developed a transparent, widely shared tracking system so that everybody could see who’s accountable for what.
The Japanese developed a planning process called Hoshin planning. Roughly translated that means following the shining path.
Too many companies develop strategic plans that just sit on a shelf. Ziegler makes sure that the game plan is a living document shared continuously with all the employees. They can identify the initiatives they are working on. It could be called a goals progress report.
As a result, the entire organization is driven to accomplish things and not be obsessed with trying to earn 20 percent ROI and other profit metrics, which distract them from accomplishing the kind of quality initiatives necessary to succeed.
W. Edwards Deming, the great American statistician who taught the Japanese how to manage after World War II, would take pride in seeing the accomplishments of InPro. Deming’s philosophy was driven by the notion that corporations succeed when employees are valued and trusted and involved in the process of growing the company.
The chief operating officer at InPro, Glenn Kennedy, is a student of Deming. Statistically measuring quality and reaching out to employees to accomplish those goals may not seem very “sexy.” But it is the blocking and tackling that makes a great company, and Kennedy understands that.
Improving the quality of processes is clearly a form of innovation and creativity, and those kinds of initiatives find their way into the annual goals progress report.
Ziegler has created a culture in which employees feel empowered to make suggestions and help drive the planning goals every year. He firmly believes that most employees want to contribute and do not need to be spied on or disciplined into performing.
For example, Matt Bennett, the vice president of product development and technical services, drives innovation in the products by listening intently to sales representatives and customers. That is backed up by providing prototypes made from the latest 3D design software to the customer for feedback. When a customer sees the prototype, it becomes very easy to communicate their needs and to come up with the optimal solution. Bennett is also open to learning new ideas that enhance productivity in everything from new materials to delivery systems that can dramatically improve the customer experience.
Ziegler has even developed a program to recognize an outstanding leader of the month. It rewards those employees who are willing to attack problems, find efficiencies or take risk to implement change. They can be nominated by fellow employees or even nominate themselves because they have the right stuff to make changes and follow through.
The reward for the outstanding leader is the use of a company-owned Hummer for a month. The company also has a gainsharing program to encourage teamwork and share the financial success with employees.
There’s no magic bullet to innovation and no one right way to do it. But one thing is absolutely certain: having a visible game plan visited on a continuous basis and visible to all employees, while having the willingness to listen to them and then publicly acknowledge their contributions, is fundamentally critical to the innovation and creativity process.
Ziegler can look back with pride at the risk he took because he had a philosophy and a view of how employees could contribute that he was able to implement.
If you implement a visible annual goals progress report, you will end up with a company that consistently drives innovation and creativity in everything it does.
Daniel Steininger is the president of BizStarts Milwaukee and Steininger & Associates LLC, and teaches a creativity boot camp for the UWM School of Continuing Education. He can be reached at: dan@bizstartsmilwaukee.com.
