Some Definitions
When we look at creating leverage in our training or consulting, we do it with the High Value/Low Cost (HVLC) Initiative. In this program, we group employees into teams of 4 to 6 and then challenge them to find opportunities for waste of annualized value of over $100,000. We then say, they have to solve the problem with an expenditure of less than $2,000. So that is a project which has at least a 50 to 1 return. That is what is known as big time leverage. If approved, it would pay itself off in 1 week (50+ weeks in a year) which is a 50 to 1 payoff. As we have done this over 10,000 times, we know it works.
So when we looked at the "Quantum Leap Company", we wanted to know what this company was all about. We had observed that some companies made a leap in improvement during or immediately following the HVLC Innovation Initiative. The improvement in business and manufacturing processes led to a significant leap in performance. For more detail see:Quantum Leap Company
A Black Knight is a disruptive individual who fights the change program or that argues about all the change emanating from the HVLC Innovation training. A Black Knight may be new manager at a company and may not be familiar with the Innovation Culture that has been created. This person can destroy the successes that the company has achieved during the HVLC Innovation program unless he/she has been properly explained the nuances of respect that have been created during the process. The Black Knight can create doubt in the commitment of the CEO to the successes demonstrated during the HVLC Innovation Program.
It is at this point that we encourage CEO’s to explain to everyone the consequences of not supporting "his initiative".
We define a "Killer Ap" as a new product, an improved product or a process innovation that gave a company an dramatic shift in market share, phenomenal profit improvement and absolutely stellar improvement in all corporate indicators.
We noticed in our training and turnaround work that there was big leverage by focusing on 5% of the cause versus 20% of the 20/80 Rule. We continuously found that if we looked at 5% of the cause, we would get 67% or so as our effect. For us, this was big news. It meant that 5% of the cause leveraged 13 times or 67% of the cause. So at a grand scale, 5% of those on Medicare consume 67% of the costs (wouldn’t it be nice if our wise Legislators applied this thinking to the design of the system – maybe it would work) or 5% of employees cost a company 67% of their healthcare costs. It works just like the 20/80 Rule but we call ours the “5/67 Rule.” In a way, the “5/67 Rule” is a subset of the 20/80 Rule.
A Portfolio of Innovation is the collection of ideas that are part of the total innovation portfolio. In our definition of an innovation portfolio, it is the sum total of all the ideas, those that are part of the active implementation schedule, those in queue waiting action. It includes tracking the Intellectual Property and all aspects of innovation in the company. And it tracks the innovation by type:
- Incremental Innovation - This is the type of innovation that flows from innnovation that exists in a product or service or flows from HVLC Innovation. It is the incremental change in the product, services, processes or procedures that profitably improve the business. The electric lock in a car would be an incremental innovation. Reducing set up time in the manufacturing process might be another.
- Disruptive Innovation - Disruptive technology is a term coined by Harvard Business School professor Clayton M. Christensen to describe a new technology that unexpectedly displaces an established technology. This would be like Intel's Microprocessor or Google's search engine.
- Organizational Innovation - This is a new organizational structure that allows a company to radically impact a market. It would be like Apples iTunes business when it initially was introduced to the market. Remember, Apple was a hardware and software company serving the microcomputer user market and not the music market. It was a major organizational innovation for Apple.
- Corporate Innovation - This is like the innovation that evolved from the PC development by IBM in its original company. It was a separate division and not beholden to the rules of management of the rest of the company. In walking into that division, people didn't wear the button down 3 piece suits that IBM was noted for. It was a big deal for IBM. And for them it was a corporate innovation. When the PC Division broke down it became just another division.
Once we have run a company through the War on Waste or HVLC Innovation program, it is ready to begin its move to create a "Culture of Innovation." A Culture of Innovation can only be created after the employees have experienced that great moment when they have participated in the identification of an idea that they have taken through the full cycle of ideation from submittal of the idea through full and complete implementation. After all the employees have completed this cycle, then and only then is it possible to create a company that treats innovation as an integral part of their job. That is the Culture of Innovation.
In our definition, the War on Waste or HV/LC Innovation is a company-wide affair. Everyone participates. And all parts of the company are open to review. No part is spared. It is one of those times that it is OK to pass judgment on the inefficiencies of a neighboring department. But this is done in a "No Blame" framework. We don't allow people to blame others for creating the opportunity, we just want them to fix it on "No Blame" basis. In fact, we believe so strongly in this concept that we trademarked No Blame. (See to the right)
The trademark symbol is intended to symbolize to our clients and their employees that we are going to drive change at their company and we do it by invoking “No Blame." The initial focus begins with "No Blame". No Blame is at the root of this methodology that has been developed to insure that all suggestions for improvement have a chance to get a fair hearing. We don't want to blame anyone for a problem. We want to find out "why", "what", "when", "where" and "how" but we don't care about "who". If we want to solve a problem or improve a process, we can't blame people for creating the problem. We just need to fix it.
| 
