Greetings!

Several readers commented about my definition of Leadership I wrote about in the last article: "creating, effecting and driving change ". All agreed that every company needs to change to keep up with worldwide trade changes, new developments and innovations their competitors are rolling out. Some pointed out the risk and uncertainty induced by change. True, when the wrong initiatives are introduced, they can destroy the morale of the team members as well as the company itself. Thus many are at a loss to define a starting point, what to do and how to define what profitable change and profitable innovation would look like for their company.

To answer the question, we always start with the vision for the company. Where is the company headed and what milestones should be reached in a certain time frame. You heard the saying that "if you don't know where you are going, any road will do". Indeed, if we do not have a blueprint for the future of the company, we have no possibility to measure if an idea, initiative or possible goal will lead us any closer to where we want to go. Independent of our preferences to judge and evaluate ideas by looking at the big picture or precise facts, we need that benchmark.    

Let us take a quick look at the definition for innovation before discussing where to go. Innovation is comprised of two components:

• Doing something better than before. Improving efficiency, productivity, competitive positioning, and quality are mostly connected to initiatives like lean manufacturing and continuous improvement.
• Finding a new solution for a customer need for which the customer is willing to pay. These are the creative ideas which will lead to new products and services, creating new profits for the company.

Both components carry risk. Lean manufacturing and continuous improvement initiatives will only be successful and sustainable if the company culture values team members' input and management embraces a participative, coaching leadership style. Developing new ideas will only work if we know with some certainty that the customers will embrace the new idea and, most importantly, are willing to pay for it. Case in point: most people in inner cities would love to own and ride a Segway. The steep price point that came with the invention, however, that was touted to "revolutionize personal transportation", made this product all but irrelevant.

To answer which component to use or where to start, we need to do a thorough analysis of the business. We like to use the so called SWOT tool to capture all influencing factors. SWOT is the acronym for the company's strength, weaknesses, opportunities and threats. Strength and weaknesses are internal factors while threats are placed on the company by the market, customers' taste and buying pattern, and competitors. Opportunities arise from analyzing the three areas and developing as many ideas as possible to create new opportunities. The key to developing these opportunities is to use a diverse group of people (if everybody thinks like you do, why have the meeting?) and to encourage open communication and to build on each others' ideas. Many stupid and silly ideas have turned out to be game changers.

We recommend to select -using the company's vision as the measuring stick- the four ideas above, which will create the largest benefit and develop those ideas further. After careful consideration, the next step would be to use the SMART goal template to describe them and to set action items, responsibilities and time lines.

By following this process you can ensure that the critical resources of the company are only used for projects which will strengthen the company's standing in the marketplace and its bottom line.

If you need help with the SWOT analysis or setting SMART goals, please check out the document links in the left column. If you would like help with developing the vision, strategy and goals for your company, give us a call. We have a variety of assessment tools and methods to support your drive.       

Please see our new whitepaper on communication skills, too.    

Warm regards,

Doris & Joe